A bill was heard in the Senate Finance Committee this week to repeal the State Auditor Enterprise Fund, which is used by Auditor Rebecca Otto to charge counties for state audits. The auditor charges for the examination of the books, records, and accounts of counties, who are accountable for the costs and expenses of the audits. The bill requires receipts from these examinations to be credited to the general fund beginning July 1 of this year and the auditor will be appropriated $5 million for ongoing operations of the audit division. However, this appropriation is less than the amount of funding necessary to audit counties and is effectively a 32% cut to the audit division.
Additionally, this legislation is being proposed in the midst of the auditor’s lawsuit against Ramsey and Wright counties for opting to utilize private CPAs instead of the auditor’s office for auditing, which was authorized through the 2015 State Government Omnibus Bill.
Auditor Otto has argued the 2015 legislation is unconstitutional because it removes one of the core duties of the OSA. This proposal is a much broader attempt to restrict the autonomy of a constitutional office and prevent the auditor from managing her office’s finances. The enterprise fund allows for liquidity when the auditor charges local governments for services and any savings is transferred back to local governments in the form of lower future auditing charges. (S.F. 511)