A Legislative Audit Commission on Tuesday revealed 12 findings of non-compliance as part of a two-year audit of the Office of Governor Tim Walz (DFL) and Lieutenant Governor Peggy Flanagan.
Deputy Legislative Auditor Lori Lysen says those issues included late vendor payments, inaccurate payroll and reimbursements, missing documentation, and failure to track state assets.
"These balances continue to roll forward from month to month," says Lysen. "So, during our audit scope, there was only one month where the statement was paid in its total amount, otherwise the balances just continued throughout our audit scope."
The audit covers July 1, 2022 through December 31, 2024.
The Governor's Office says it has resolved 11 of the 12 issues, and that this review "did not find any financial misuse or malfeasance."
"We have taken significant steps to improve internal controls to mitigate future issues by implementing strengthened standard operating procedures about documentation, billing, receipt management and reconciliation, and asset management," a letter from Walz's office says. "Moreover, we made strategic employment decisions to increase capacity and professionalize the office's operations function."
The governor's office paid 29 of 30 purchasing card statements late, according to Deputy Legislative Auditor Lori Lysen.
"The governor's office paid 92 of 208 invoices late, and those payments ranged from one day to 359 days late, averaging 31 days late," she adds.
Walz, who is running for an unprecedented third consecutive term in office, has faced significant controversy stemming from fraud issues in state government, including the massive, COVID fraud prosecutions coming from Feeding Our Future.
Just last week, Walz has ordered a third party audit on the billing practices of 14 Medicaid services that are deemed to be "high risk" for fraud in Minnesota.
A letter from both the Governor and Lt. Governor's office to Legislative Auditor Judy Randall notes,
"Thank you for the opportunity to review and comment on the Office of the Legislative Auditor’s performance review of the Office of the Governor and Lieutenant Governor. The Governor’s Office appreciates your office’s review and recommendations. This review was wide-ranging. It examined areas not raised in the OLA’s 2022 financial audit of the Governor’s Office and even identified practices that predated the current administration. In the course of that thorough review, the OLA identified narrow and discrete areas for improvement. Even before the OLA initiated this review, the Governor’s Office had resolved almost half of the issues identified, many of which were isolated to 2022. We have taken significant steps to improve internal controls to mitigate future issues by implementing strengthened standard operating procedures about documentation, billing, receipt management and reconciliation, and asset management. Moreover, we made strategic employment decisions to increase capacity and professionalize the office's operations function. Importantly, this review did not find any financial misuse or malfeasance. The Governor’s Office has resolved 11 of 12 of the report's findings and implemented its recommendations."