A 2015 law allowing every Minnesota county to hire private-sector accounting firms has created an elongated political battle between Otto and the Legislature. In response to that law, Otto’s office released a report last year examining those private-sector county audits, claiming there were major inadequacies in how CPAs reviewed counties. And in response to Otto, last year’s Legislature issued a special directive to have its investigative arm – headed by Legislative Auditor Jim Nobles – dig into Otto’s office.
Turns out Otto, who’s also running as the most leftwing DFL candidate for governor, allegedly broke the rules in her determination to punish the counties and private firms that dared challenge her.
On Tuesday, the legislative auditor’s office explained its findings to the House State Government Finance Committee, telling lawmakers that Otto’s office didn’t properly back up its previously reported claims and that it didn’t treat private CPAs with due process or “professional courtesy that is normally practiced” in the industry.
Additionally, Nobles and others questioned if a review of private CPAs, like the state auditor’s, has ever been public.
“This is what’s unusual, is this kind of a report,” Nobles said.
Otto skipped the oversight hearing. But her private sector competitors showed up swinging.
Geno Fragnito, the Minnesota Society of CPAs’ legislative relations director, said Otto’s report “seemed to have a predetermined outcome” that “calls into question” the state auditor’s objectivity.
“It is neither objective nor accurate,” Fragnito said.
Otto also failed to give the targets of her critical audit the standard courtesy of a response to her findings, according to Nobles.
These reports usually allow responses from the audited party, according to Nobles, audit director Lori Leysen and Fragnito. The 2016 report released the names of private firms, key findings and conclusions, but didn’t allow for those responses.
“They had no idea there was going to be a published report,” said Leysen, who was in charge of this special review.
Otto’s tenure is turning out to be the Dayton administration’s latest case study of state government running roughshod over Minnesotans without being held accountable. The Minnesota Supreme Court will likely rule on the constitutionality of the 2015 law allowing counties to use private sector CPAs instead of Otto’s office sometime this summer.