HF 1240

as introduced - 94th Legislature (2025 - 2026) Posted on 03/20/2025 04:25pm

A bill for an act
relating to state government; modifying policy related to the legislative auditor;
amending Minnesota Statutes 2024, sections 3.971, subdivisions 2, 8a, 9; 3.978,
subdivision 2; 3.979, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapter 15; repealing Minnesota Statutes 2024, section 16B.45.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 3.971, subdivision 2, is amended to read:

Subd. 2.

Staff; compensation.

(a) The legislative auditor shall establish a Financial
Audits Division deleted text begin and deleted text end new text begin , new text end a Program Evaluation Division new text begin , and a Special Reviews Division new text end to
fulfill the duties prescribed in this section.

(b) Each division may be supervised by a deputy auditor, appointed by the legislative
auditor, with the approval of the commission, for a term coterminous with the legislative
auditor's term. The deputy auditors may be removed before the expiration of their terms
only for cause. The legislative auditor and deputy auditors may each appoint an administrative
support specialist to serve at pleasure. The salaries and benefits of the legislative auditor,
deputy auditors, and administrative support specialists shall be determined by the
compensation plan approved by the Legislative Coordinating Commission. The deputy
auditors may perform and exercise the powers, duties and responsibilities imposed by law
on the legislative auditor when authorized by the legislative auditor.

(c) The legislative auditor, deputy auditors, and administrative support specialists shall
serve in the unclassified civil service, but all other employees of the legislative auditor shall
serve in the classified civil service. Compensation for employees of the legislative auditor
in the classified service shall be governed by a plan prepared by the legislative auditor and
approved by the Legislative Coordinating Commission and the legislature under section
3.855, subdivision 3.

(d) While in office, a person appointed deputy for the Financial Audit Division must
hold an active license as a certified public accountant.

(e) Notwithstanding section 43A.32, subdivisions 2 and 3, or any other law to the
contrary, an employee of the legislative auditor is prohibited from being a candidate for a
partisan elected public office.

Sec. 2.

Minnesota Statutes 2024, section 3.971, subdivision 8a, is amended to read:

Subd. 8a.

Special reviews.

The legislative auditor may conduct a special review to: (1)
fulfill a legal requirement; (2) investigate allegations that an individual or organization
subject to audit by the legislative auditor may not have complied with legal requirements new text begin ,
including but not limited to legal requirements new text end related to the use of public money, other
public resources, or government data classified as not public; (3) respond to a legislative
request for a review of an organization or program subject to audit by the legislative auditor;
deleted text begin or deleted text end (4) investigate allegations that an individual may not have complied with section 43A.38
or 43A.39 new text begin ; or (5) follow up on a prior special review to assess what changes have occurred new text end .

Sec. 3.

Minnesota Statutes 2024, section 3.971, subdivision 9, is amended to read:

Subd. 9.

Obligation to notify the legislative auditor.

deleted text begin The chief executive, financial,
or information officers deleted text end new text begin (a) An obligated officer new text end of an organization subject to audit under
this section must promptly notify the legislative auditor when the officer obtains information
indicating that public money or other public resources may have been used for an unlawful
purpose, or when the officer obtains information indicating that government data classified
by chapter 13 as not public may have been accessed by or provided to a person without
lawful authorization. As necessary, the legislative auditor shall coordinate an investigation
of the allegation with appropriate law enforcement officials.

new text begin (b) For purposes of this subdivision, "obligated officer" means the organization's:
new text end

new text begin (1) chief executive officer;
new text end

new text begin (2) deputy and assistant chief executive officers;
new text end

new text begin (3) chief administrative, chief financial, chief information, and chief investigative officers;
new text end

new text begin (4) heads of divisions, bureaus, departments, institutes, or other organizational units;
and
new text end

new text begin (5) board chair, where applicable.
new text end

Sec. 4.

Minnesota Statutes 2024, section 3.978, subdivision 2, is amended to read:

Subd. 2.

Inquiry and inspection power; duty to aid legislative auditor.

new text begin (a) new text end All public
officials and their deputies and employees, and all corporations, firms, and individuals
having business involving the receipt, disbursement, or custody of public funds shall at all
times: (1) afford reasonable facilities for examinations by the legislative auditor; (2) provide
returns and reports required by the legislative auditor; (3) attend and answer under oath the
legislative auditor's lawful inquiries; (4) produce and exhibit all books, accounts, documents,
data of any classification, and property that the legislative auditor requests to inspect; and
(5) in all things cooperate with the legislative auditor.

new text begin (b) With respect to an audit, as defined in section 3.979, of the leadership of an entity
subject to audit under section 3.971, the legislative auditor may require the production of
data maintained on state information systems without notification to or approval by the
affected entity.
new text end

Sec. 5.

Minnesota Statutes 2024, section 3.979, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Legislative data. new text end

new text begin The legislative auditor may classify as private or nonpublic
data provided to the legislative auditor by a legislator or by legislative staff on behalf of a
legislator.
new text end

Sec. 6.

new text begin [15.0573] REPORTING ALLEGED MISUSE OF PUBLIC RESOURCES
OR DATA.
new text end

new text begin The commissioner or chief executive officer of each state department, board, commission,
office, or other agency must ensure that employee and nonemployee concerns about the
misuse of public money, other public resources, or government data are promptly directed
to one or more of the obligated officers identified in section 3.971, subdivision 9, or the
Office of the Legislative Auditor. The commissioner of management and budget must
develop a policy to operationalize and standardize the process under this section across state
agencies.
new text end

Sec. 7. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, section 16B.45, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 25-02279

16B.45 FUNCTION OF LEGISLATIVE AUDITOR.

The legislative auditor may conduct performance evaluations of all systems analysis, information services, and computerization efforts of agencies, the University of Minnesota, and metropolitan boards, agencies, and commissions. Upon request of the governing body or the state Information Systems Advisory Council, the legislative auditor shall conduct the same services for political subdivisions of the state and report the findings to the governor and the legislature. The cost of these evaluations must be paid by the agencies being evaluated.