STATE OF MINNESOTA

OFFICE OF THE STATE AUDITOR

REBECCA OTTO
STATE AUDITOR

SUITE 500
525 PARK STREET
SAINT PAUL, MN 55103-2139

(651) 296-2551 (Voice)

(651) 296-4755 (Fax)
state.auditor@state.mn.us (E-mail)
1-800-627-3529 (Relay Service)

August 18, 2015

The Honorable Sarah Anderson, Chair

State Government Finance Committee
583 State Office Building
100 Rev. Dr. Martin Luther King Jr. Boulevard
St. Paul, Minnesota 551551298

VIA EMAIL AND US MAIL

Dear Representative Anderson:

I am writing in response to your letter dated August 11, 2015, which states that the House State
Government Finance Committee would be holding a hearing on August 18, 2015 to discuss the
Office of the State Auditors (OSA) auditing of Minnesota counties. As a former State
Representative, I understand and respect the Legislatures discretion to hold hearings. I also have
a responsibility to the people of Minnesota to protect their tax dollars, and both myself and the
OSA are busy fulfilling that constitutional responsibility.
The Office of the State Auditor is currently in the middle of planning for the next three-year audit
cycle and is in communications with counties. The Office has made preliminary determinations
that the public interest requires an OSA audit for certain counties for the 2015 to 2017 three-year
cycle. As it has in past years, the OSA also made preliminary determinations, based on staffing
limitations and individualized county considerations, to permit certain counties to use CPA firms
to conduct their audit for the three-year cycle.
The Office has continued its prior practice of operating in three-year planning cycles for county
audits, which promotes efficiency and consistency and allows for planning for both the Office of
the State Auditor and for the counties, which in turn serves the taxpayers best interests. The only
change this cycle is a three-year contract for the three-year cycle rather than three single-year
contracts. This not only allows counties and the OSA to plan for the future, it is consistent with
Minnesota law. The three-year contract is important due to the uncertainty created by the
Legislature last session regarding county audits.
Some counties signed the three-year contracts. Some counties declined to sign the contracts based
on their belief that they have the authority to refuse an OSA audit because of the new legislation,
or for other reasons.

An Equal Opportunity Employer

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The Honorable Sarah Anderson, Chair
State Government Finance Committee
583 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
Saint Paul, Minnesota 55155-1298

As I have repeatedly stated, I have serious concerns about the constitutionality of any efforts to
limit the authority of a core executive Executive Branch function, particularly a core function that
has been vested in the State Auditor and Executive Branch since Minnesota was a territory.
We are reviewing the implications of the counties decisions to refuse to sign contracts with the
OSA and the potential impact on Minnesota taxpayers. The process we have implemented allows
counties and the OSA to plan for the future.
The Office of the State Auditor will continue to provide independent oversight of billions in tax
dollars on behalf of Minnesotans.
Please add this letter to the record for the hearing in lieu of my testimony.
Sincerely,
/s/Rebecca Otto
Rebecca Otto
State Auditor
CC: Representative Jeff Howe
Representative Sheldon Johnson
Representative Tony Albright
Representative Mark Anderson
Representative Lyndon Carlson, Sr.
Representative Bob Dettmer
Representative Ron Erhardt
Representative Phyllis Kahn
Representative Carolyn Laine
Representative Bob Loonan
Representative Jim Nash
Representative Michael V. Nelson
Representative John Petersburg
Representative Cindy Pugh
Representative Linda Runbeck
Representative Jennifer Schultz
Representative Jim Knoblach