2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to the legislative auditor; requiring 1.3 procedures for the appointment process; clarifying 1.4 audit jurisdiction; protecting privacy of certain 1.5 audit data; clarifying responsible officers to 1.6 prosecute violations of law and recover public money; 1.7 granting rights to witnesses in audit investigations; 1.8 amending Minnesota Statutes 1994, sections 3.97, 1.9 subdivisions 4, 5, 9, and 11; 3.971; 3.972; 3.974; 1.10 3.975; 3.978; 10.48; 37.06; 37.07; 85A.02, subdivision 1.11 5c; 192.551; 256E.05, subdivision 3a; 268.12, 1.12 subdivision 8; 352.03, subdivision 6; 353.03, 1.13 subdivision 3a; 353A.05, subdivision 1; 354.06, 1.14 subdivision 2a; 360.015, subdivision 19; and 609.456; 1.15 Minnesota Statutes 1995 Supplement, section 16B.42, 1.16 subdivision 1; repealing Minnesota Statutes 1994, 1.17 sections 3.973; 136A.29, subdivision 19; 256B.04, 1.18 subdivision 11; 469.207, subdivision 1; 574.02; and 1.19 574.03. 1.20 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.21 Section 1. Minnesota Statutes 1994, section 3.97, 1.22 subdivision 4, is amended to read: 1.23 Subd. 4. The legislative auditor is the executive 1.24 secretary of the commission. The legislative auditor shall be 1.25 appointed by the commission for a six-year term and serve in the 1.26 unclassified service. Before making an appointment, the 1.27 commission shall establish procedures for the appointment 1.28 process. The procedures must include, but need not be limited 1.29 to, provisions defining how and when public notices will be 1.30 given, how and when applications will be received and reviewed, 1.31 and how and when the appointment will be made. The legislative 1.32 auditor shall not at any time while in office hold any other 2.1 public office. The legislative auditor shall not be removed 2.2 from office before the expiration of the term of service except 2.3 for cause after public hearing. 2.4 Sec. 2. Minnesota Statutes 1994, section 3.97, subdivision 2.5 5, is amended to read: 2.6 Subd. 5. The legislative auditor shall establish a 2.7 financial audits division and a program evaluation division to 2.8 fulfill the duties prescribed in this section. Each division 2.9 shall be supervised by a deputy auditor, appointed by the 2.10 legislative auditor, with the approval of the commission, for a 2.11 term coterminous with the legislative auditor's term. With the 2.12 prior approval of the commission, the legislative auditor may 2.13 remove deputy auditors
may be removedbefore the expiration of 2.14 their terms only for cause. The legislative auditor and deputy 2.15 auditors may each appoint a confidential secretary to serve at 2.16 pleasure. The commission shall fix the salaries of the deputy 2.17 auditors and confidential secretaries. The deputy auditors may 2.18 perform and exercise the powers, duties and responsibilities 2.19 imposed by law on the legislative auditor when authorized by the 2.20 legislative auditor. The deputy auditors and the confidential 2.21 secretaries serve in the unclassified civil service, but all 2.22 other employees of the legislative auditor are in the classified 2.23 civil service. While in office, an individual appointed deputy 2.24 for the financial audit division shall hold an active license as 2.25 a certified public accountant. 2.26 Sec. 3. Minnesota Statutes 1994, section 3.97, subdivision 2.27 9, is amended to read: 2.28 Subd. 9. The legislative auditor is subject to the 2.29 government data practices act, chapter 13, and shall protect 2.30 from unlawful disclosure data classified by law as not public. 2.31 If data provided by the legislative auditor to the commission is 2.32 disseminated by the commission or its members or agents in 2.33 violation of section 13.05, subdivision 4, the commission is 2.34 subject to liability under section 13.08, subdivisions 1 and 3. 2.35 Sec. 4. Minnesota Statutes 1994, section 3.97, subdivision 2.36 11, is amended to read: 3.1 Subd. 11. "Audit" as used in this subdivision means a 3.2 financial audit, a program evaluation, a best practices review, 3.3 or an investigation. Data relating to an audit are not public 3.4 or with respect to data on individuals are confidential until 3.5 the final report of the audit has been publishedreleased by the 3.6 legislative auditor or the audit is no longer being actively 3.7 pursued. Upon release of a final report by the legislative 3.8 auditor, data relating to an audit are public, except data 3.9 otherwise classified by law as not public. Data that support3.10 the conclusions of the report andrelating to an audit that the 3.11 legislative auditor reasonably believes will resultbe used in 3.12 litigation are not public and with respect to data on 3.13 individuals are confidential until the litigation has been 3.14 completed or is no longer being actively pursued. Data on3.15 individuals that could reasonably be used to determine the3.16 identity of an individual supplying datathat was not government 3.17 data before it was supplied to the legislative auditor for an 3.18 audit are private or nonpublic if the data supplied by the3.19 individualwere needed for an audit and the individualthey 3.20 would not have been provided the datato the legislative auditor 3.21 without an assurance that the individual's identitydata would 3.22 remain private or nonpublic, or the legislative auditor 3.23 reasonably believes that the subject would not haveperson 3.24 provided the data expecting they would remain private or 3.25 nonpublic. If, before releasing an audit report, the 3.26 legislative auditor provides an individual with data relating to 3.27 the audit for the purpose of review and verification of the 3.28 data, the individual must protect the data from unlawful 3.29 disclosure and be subject to the penalties and liabilities 3.30 provided in sections 13.08 and 13.09. The definitions of terms 3.31 provided in section 13.02 apply for purposes of this subdivision. 3.32 Sec. 5. Minnesota Statutes 1994, section 3.971, is amended 3.33 to read: 3.34 3.971 [POWERS AND DUTIES OF LEGISLATIVE AUDITOR.] 3.35 Subdivision 1. To perform financial auditsThe legislative 3.36 auditor shall postaudit and make a complete examination and4.1 verification of all accounts, records, inventories, vouchers,4.2 receipts, funds, securities, and other assets ofannually audit 4.3 the financial statements required by section 16A.50 and, as 4.4 resources permit, shall also audit the University of Minnesota, 4.5 the Minnesota state colleges and universities, all state 4.6 departments, boards, commissions, courts, and other state 4.7 agencies at least once a year, if money and personnel permit,4.8 and oftener if deemed necessary or as directed by the4.9 legislature or the legislative audit commission. The 4.10 legislative auditor shall also audit the state agricultural 4.11 society, Minnesota Technology, Inc., the agricultural 4.12 utilization research institute, the Minnesota historical 4.13 society, the labor interpretive center, the Minnesota state 4.14 armory building commission, the metropolitan sports facilities 4.15 commission, the metropolitan airports commission, and the 4.16 metropolitan mosquito control commission. The legislative 4.17 auditor may also audit the financial records of any corporation, 4.18 firm, or organization that are related to the receipt, custody, 4.19 or disbursement of public funds subject to audit by the 4.20 legislative auditor. Financial audits shall be conducted 4.21 according to generally accepted government auditing standards 4.22 and may include detailed checking of every transaction or test 4.23 checking as the legislative auditor deems best. The books of 4.24 the state treasurer and commissioner of finance may be 4.25 examined monthlyat any time. 4.26 Subd. 1a. The legislative auditor shall see that4.27 alldetermine whether provisions of law respecting the 4.28 appropriate and economic use of public funds are complied with 4.29 by all departments and agencies of the state government and by 4.30 any other organization subject to audit by the legislative 4.31 auditor. 4.32 A copy of all postaudits, reports, and results of4.33 examinations made by the legislative auditor shall be deposited4.34 with the legislative reference library.4.35 Subd. 1b. When the legislative auditor receives 4.36 information indicating that money, property, or other resources 5.1 of a public entity subject to audit by the legislative auditor 5.2 may not have been used in compliance with the law or that a 5.3 violation of section 43A.39, subdivision 2, may have occurred, 5.4 the legislative auditor shall review the information and 5.5 determine whether an investigation by the legislative auditor is 5.6 needed. If the information being reviewed under this 5.7 subdivision was provided to the legislative auditor by a 5.8 complainant and the complainant's identity is known by the 5.9 legislative auditor, the legislative auditor shall report in 5.10 writing to the complainant the decision, and the basis for the 5.11 decision, on whether the legislative auditor will conduct an 5.12 investigation. If the legislative auditor conducts an 5.13 investigation, the written report must be filed according to 5.14 section 3.974. If the legislative auditor receives information 5.15 relating to the misuse of money, property, or other resources of 5.16 a public entity subject to audit by the state auditor, the 5.17 legislative auditor shall refer the information to the state 5.18 auditor, who shall review the information and determine whether 5.19 an investigation by the state auditor is needed. 5.20 Subd. 1c. If the head of an agency reports to the 5.21 legislative auditor evidence of possible misconduct within the 5.22 agency and requests an audit or investigation and the 5.23 legislative auditor decides not to conduct an audit or 5.24 investigation, the legislative auditor shall inform the 5.25 legislative audit commission of the decision. 5.26 Subd. 2. To perform program evaluation,The legislative 5.27 auditor shall conduct program evaluations to determine the 5.28 degree to which the activities and programs entered into or 5.29 funded by the state are accomplishing their goals and 5.30 objectives, including a critical analysis of goals and 5.31 objectives, measurement of program results and effectiveness, 5.32 alternative means of achieving the same results, and efficiency 5.33 in the allocation of resources. The legislative auditor shall 5.34 recommend ways to reduce the cost of providing state services 5.35 and to eliminate services of one agency that overlap with or 5.36 duplicate the services performed by another agency. At the 6.1 direction of the commission the legislative auditor may perform 6.2 program evaluations of any state department, board, 6.3 commission, oragency and, or any other organization in the 6.4 executive or judicial branches of state government; the 6.5 University of Minnesota; any metropolitan agency, board, or 6.6 commission created under chapter 473; or any program or activity 6.7 funded in whole or part by the state. 6.8 Subd. 3. The legislative auditor, on a biennial schedule, 6.9 shall review agency performance reports to review and comment on 6.10 the appropriateness, validity, and reliability of the outcome 6.11 measures and data collection efforts. The legislative auditor 6.12 shall report the findings to agencies, the governor, the speaker 6.13 of the house of representatives, and the president of the senate. 6.14 Subd. 4. (a) To perform best practices reviews, the 6.15 legislative auditor through the program evaluation division 6.16 shall examine the procedures and practices used to deliver local 6.17 government services, including municipalities and counties, 6.18 determine the methods of local government service delivery, 6.19 identify variations in cost and effectiveness, and identify 6.20 practices to save money or provide more effective service 6.21 delivery. The legislative auditor shall recommend to local 6.22 governments, service delivery methods and practices to improve 6.23 the cost-effectiveness of services. The legislative auditor and 6.24 the board of government innovation and cooperation shall notify 6.25 each other of projects being conducted relating to improving 6.26 local government services. 6.27 (b) The commission shall identify local government services 6.28 to be reviewed with advice from an advisory council whose 6.29 membership shall consist of: 6.30 (1) three representatives from the Association of Minnesota 6.31 Counties; 6.32 (2) three representatives from the League of Minnesota 6.33 Cities; and6.34 (3) two representatives from the Association of 6.35 Metropolitan Municipalities; and 6.36 (4) three representatives from the Minnesota Association of 7.1 Townships. 7.2 (c) This subdivision expires June 30, 1999. 7.3 Sec. 6. Minnesota Statutes 1994, section 3.972, is amended 7.4 to read: 7.5 3.972 [ AGENCIES;AUDITS; DEFINITIONSAUDIT CONTRACTS.] 7.6 Subdivision 1. [PUBLIC ACCOUNTANT.] For the purposes of7.7 this section, "public accountant" means a certified public7.8 accountant, certified public accounting firm, or a licensed7.9 public accountant licensed by the board of accountancy under7.10 sections 326.17 to 3126.96.36.199 Subd. 2. [AUDITS OF STATE AND SEMISTATE AGENCIES.] To 7.12 ensure accountability of public money, the legislative 7.13 auditor shall make a constant audit of all financial affairs of7.14 all departments and agencies of the state, and of the financial7.15 records and transactions of public boards, associations, and7.16 societies supported, wholly or in part, by state funds. Once in7.17 each year, if funds and personnel permit, without previous7.18 notice, the legislative auditor shall visit each state7.19 department and agency, association or society and, so far as7.20 practicable,may, for any department, agency, board, commission, 7.21 court, or other organization being audited: 7.22 (1) inspect the premises; 7.23 (2) thoroughlyexamine its books andfinancial records for 7.24 all accounts, verifying thefunds, securities, andother assets, 7.25 and for all liabilities and debt; 7.26 (3) check the items of receipts and disbursements with its7.27 voucher recordssupporting documentation for all revenue 7.28 collections and expenditures; 7.29 (4) ascertain the character of the official bonds for its7.30 officers and the financial ability of the bonding institution;7.31 (5)inspect its sources of revenue and the use andtheir 7.32 disposition of state appropriations and property; 7.33 (6)(5) investigate themethods of purchase and sale and 7.34 the character of contracts on public account; 7.35 (7)(6) ascertain proper custody and depository for its 7.36 funds and securities; 8.1 (8)(7) verify the inventory of public property and other 8.2 assets held in trust; and8.3 (9)(8) ascertain that all financial transactions and 8.4 operations involving thepublic funds and property of the state8.5 comply with the spirit and purpose of the lawapplicable 8.6 laws, are sound by modernadhere to appropriate and reasonable 8.7 standards of financial management and are for the best 8.8 protection of the public interest; 8.9 (9) examine the financial records of an organization or 8.10 individual authorized to raise money or collect a tax, fee, or 8.11 other revenue for the department, agency, board, commission, 8.12 court, or other organization being audited; and 8.13 (10) examine the financial records of any business or 8.14 individual paid with public money to provide goods or services 8.15 to the department, agency, board, commission, court, or other 8.16 organization being audited. 8.17 Subd. 3. [AUDIT CONTRACTS.] For the purposes of this 8.18 subdivision, "public accountant" means a certified public 8.19 accountant, a certified public accounting firm, or a licensed 8.20 public accountant licensed by the board of accountancy under 8.21 sections 326.17 to 326.229. Notwithstanding any other law, a8.22 state department, board, commission, or other state agencyan 8.23 organization or individual in the executive branch of state 8.24 government shall not negotiate a contract with a public 8.25 accountant for an audit, except a contract negotiated by the 8.26 state auditor for an audit of a local government, unless the 8.27 contract has been reviewed bysubmitted to the legislative 8.28 auditor for review at least ten working days before the 8.29 contract's effective date. The legislative auditor shall not 8.30 participate in the selection of the public accountant but shall8.31 may review and submit written comments on the proposed 8.32 contract within seven days of its receipt. Upon completion of 8.33 the audit, the legislative auditor shall be given a copy of the 8.34 final report. 8.35 Sec. 7. Minnesota Statutes 1994, section 3.974, is amended 8.36 to read: 9.1 3.974 [TO FILE WRITTEN REPORTS.] 9.2 For each audit done, evaluation, or review completed, the 9.3 legislative auditor shall file a written report with 9.4 the department, agency, society, or association concerned,9.5 andorganization or individual that was audited, evaluated, or 9.6 reviewed, the legislative audit commission for its consideration9.7 and action, and the legislative reference library. 9.8 Each audit report shall set forth:9.9 (1) whether all funds have been expended for the purposes9.10 authorized in their appropriation;9.11 (2) whether all receipts have been accounted for and paid9.12 into the state treasury as required by law;9.13 (3) all illegal and unbusinesslike practices, if any;9.14 (4) an assessment of the financial control practices used9.15 in the agency, a measurement of performance, and recommendations9.16 for improved effectiveness; and9.17 (5) other data, information, and recommendations as the9.18 legislative auditor may deem advisable and necessary.9.19 Sec. 8. Minnesota Statutes 1994, section 3.975, is amended 9.20 to read: 9.21 3.975 [DUTIES WHEN VIOLATIONS ARE DISCOVERED.] 9.22 If a legislative auditor's examination discloses 9.23 malfeasance, misfeasance, or nonfeasance in office on the part 9.24 of ana public officer or employee or indicates that any 9.25 individual or business may have committed an illegal act, a copy9.26 of the report shall be signed and verified, andit shall be the 9.27 duty of the legislative auditor to file thereport withit to 9.28 the legislative audit commission and, the attorney general, and 9.29 the appropriate county attorney. It shall be the duty ofThe 9.30 attorney general to institute and prosecute civil proceedings9.31 against the delinquent officer or employee, or upon the9.32 officer's or employee's official bond, or both, as appropriate9.33 to secure to the state theshall obtain recovery of funds or 9.34 other assets misappropriated through civil proceeding, if 9.35 necessary. The attorney general shall causecounty attorney 9.36 shall bring criminal proceedings to be instituted by the proper10.1 authoritiesas the evidence may warrant. 10.2 Sec. 9. Minnesota Statutes 1994, section 3.978, is amended 10.3 to read: 10.4 3.978 [LEGISLATIVE AUDITOR; SUBPOENA POWERS; PENALTIES.] 10.5 Subdivision 1. In all matters relating to official duties, 10.6 the legislative auditor has the powers possessed by courts of 10.7 law to issue and have subpoenas served. 10.8 Subd. 2. All public officials and their deputies and 10.9 employees, and all corporations, firms, and individuals having 10.10 business involving the receipt, disbursement, or custody of 10.11 public funds shall at all times afford reasonable facilities for 10.12 examinations by the legislative auditor, make returns and 10.13 reports required by the legislative auditor, attend and answer 10.14 under oath the legislative auditor's lawful inquiries, produce 10.15 and exhibit all books, accounts, documents, and property that 10.16 the legislative auditor may desire to inspect, and in all things 10.17 aid the legislative auditor in the performance of duties. If a 10.18 person refuses or neglects to obey any lawful direction of the 10.19 legislative auditor, a deputy or assistant, or withholds any 10.20 information, book, record, paper or other document called for by 10.21 the legislative auditor for the purpose of examination, after 10.22 having been lawfully required by order or subpoena, upon 10.23 application by the auditor, a judge of the district court in the 10.24 county where the order or subpoena was made returnable shall 10.25 compel obedience or punish disobedience as for contempt, as in 10.26 the case of a similar order or subpoena issued by the court. 10.27 Subd. 3. Before taking a sworn statement from an 10.28 individual, the legislative auditor shall give the individual 10.29 written notice that the statement will be taken under oath and 10.30 that the individual may have an attorney or union 10.31 representative, or both, present during the statement, if the 10.32 attorney or union representative agrees to protect the statement 10.33 and all other not public data disclosed during the statement 10.34 from unlawful disclosure and be subject to the penalties and 10.35 liabilities provided for in sections 13.02 and 13.09. A person 10.36 who swears falsely to the legislative auditor, a deputy, or 11.1 assistant, concerning any matter stated under oath is guilty of 11.2 a gross misdemeanor. 11.3 Sec. 10. Minnesota Statutes 1994, section 10.48, is 11.4 amended to read: 11.5 10.48 [EXPENSE REPORTS.] 11.6 The house of representatives and senate shall by rule 11.7 require detailed quarterly reports of expenditures by the house 11.8 of representatives and senate to their respective committees on 11.9 rules and legislative administration. Each constitutional11.10 officer, the district courts, court of appeals, and supreme11.11 court shall submit detailed quarterly reports of their11.12 expenditures to the legislative auditor. These reports are11.13 public information.11.14 Sec. 11. Minnesota Statutes 1995 Supplement, section 11.15 16B.42, subdivision 1, is amended to read: 11.16 Subdivision 1. [COMPOSITION.] The intergovernmental 11.17 information systems advisory council is composed of (1) two 11.18 members from each of the following groups: counties outside of 11.19 the seven-county metropolitan area, cities of the second and 11.20 third class outside the metropolitan area, cities of the second 11.21 and third class within the metropolitan area, and cities of the 11.22 fourth class; (2) one member from each of the following groups: 11.23 the metropolitan council, an outstate regional body, counties 11.24 within the metropolitan area, cities of the first class, school 11.25 districts in the metropolitan area, school districts outside the 11.26 metropolitan area, and public libraries; (3) one member each 11.27 appointed by the state departments of children, families, and 11.28 learning, human services, revenue, and economic security, and 11.29 the office of strategic and long-range planning , and the11.30 legislative auditor; (4) one member from the office of the state 11.31 auditor, appointed by the auditor; (5) the assistant 11.32 commissioner of administration for the information policy 11.33 office; (6) one member appointed by each of the following 11.34 organizations: league of Minnesota cities, association of 11.35 Minnesota counties, Minnesota association of township officers, 11.36 and Minnesota association of school administrators; and (7) one 12.1 member of the house of representatives appointed by the speaker 12.2 and one member of the senate appointed by the subcommittee on 12.3 committees of the committee on rules and administration. The 12.4 legislative members appointed under clause (7) are nonvoting 12.5 members. The commissioner of administration shall appoint 12.6 members under clauses (1) and (2). The terms, compensation, and 12.7 removal of the appointed members of the advisory council are as 12.8 provided in section 15.059, but the council does not expire 12.9 until June 30, 1997. 12.10 Sec. 12. Minnesota Statutes 1994, section 37.06, is 12.11 amended to read: 12.12 37.06 [SECRETARY; LEGISLATIVE AUDITOR; DUTIES; REPORT.] 12.13 The secretary shall keep a complete record of the 12.14 proceedings of the annual meetings of the state agricultural 12.15 society and all meetings of the board of managers and any 12.16 committee of the board, keep all accounts of the society other 12.17 than those kept by the treasurer of the society, and perform 12.18 other duties as directed by the board of managers. On or before 12.19 December 31 each year, the secretary shall report to the 12.20 governor for the fiscal year ending October 31 all the 12.21 proceedings of the society during the current year and its 12.22 financial condition as appears from its books. This report must 12.23 contain a full, detailed statement of all receipts and 12.24 expenditures during the year. 12.25 The books and accounts of the society for the fiscal year 12.26 must be examined and audited annually by the legislative 12.27 auditor. The cost of the examination must be paid by the 12.28 society to the statelegislative auditor and credited to the 12.29 legislative auditor's revolvinggeneral fund. 12.30 A summary of this examination, certified by the legislative 12.31 auditor, must be appended to the secretary's report, along with 12.32 the legislative auditor's recommendations and the proceedings of 12.33 the first annual meeting of the society held following the 12.34 secretary's report, including addresses made at the meeting as 12.35 directed by the board of managers. The summary, 12.36 recommendations, and proceedings must be printed in the same 13.1 manner as the reports of state officers. Copies of the report 13.2 must be printed annually and distributed as follows: to each 13.3 society or association entitled to membership in the society, to 13.4 each newspaper in the state, and the remaining copies as 13.5 directed by the board of managers. 13.6 Sec. 13. Minnesota Statutes 1994, section 37.07, is 13.7 amended to read: 13.8 37.07 [MONTHLY STATEMENTS BY SECRETARY; PURCHASES, 13.9 EXPENDITURES.] 13.10 The secretary of the state agricultural society shall 13.11 prepare a signed statement each month summarizing receipts and 13.12 expenditures for the preceding month, which must be approved by 13.13 the president or a vice-president of the board of managers. The 13.14 secretary's affidavit must be attached to this statement. The 13.15 affidavit must state: 13.16 (1) that all articles were purchased by or under the 13.17 secretary's direction, and that to the secretary's best 13.18 information and belief, all articles purchased by the board of 13.19 managers were purchased at a fair cash market value and received 13.20 by the society, and that all services charged for were actually 13.21 provided; 13.22 (2) that neither the secretary nor any person in the 13.23 secretary's behalf, or the board of managers, to the secretary's 13.24 best information and belief, had any pecuniary or other interest 13.25 in any purchase made or services rendered, or received any 13.26 pecuniary or other benefit from the purchases or services, 13.27 directly or indirectly, by commission, percentage, deduction, or 13.28 otherwise; and 13.29 (3) that the articles specified conformed in every respect 13.30 to the goods ordered, in both quality and quantity. 13.31 The report must also show the amount of money in the hands 13.32 of the treasurer of the society. 13.33 Copies of the secretary's monthly report must be furnished 13.34 to the commissioner of finance and the office of the legislative13.35 auditorand to each member of the board of managers no later 13.36 than the tenth of the month following the month's activities 14.1 reported. 14.2 The board of managers shall designate one or more national 14.3 or state banks, or trust companies authorized to do a banking 14.4 business, as official depositories for the society's money, and 14.5 shall then require the treasurer to deposit all or part of that 14.6 money in the designated bank or banks. The designation must be 14.7 in writing and must set forth all the terms and conditions upon 14.8 which the deposits are made, and it must be signed by the 14.9 president and secretary and made a part of the minutes of the 14.10 board. Any bank or trust company designated must qualify as a 14.11 depository by furnishing a corporate surety bond or collateral 14.12 as required by section 118.01, and must, as long as any of the 14.13 society's money is on deposit with it, maintain the bond or 14.14 collateral in the amounts required by that section. No bond or 14.15 collateral is required to secure any deposit if it is insured 14.16 under federal law, as provided in section 118.10. 14.17 Sec. 14. Minnesota Statutes 1994, section 85A.02, 14.18 subdivision 5c, is amended to read: 14.19 Subd. 5c. [FINANCIAL REPORT.] The board shall employ a 14.20 certified public accountant to audit and examine its financial 14.21 records each year. The board shall submit to the legislative14.22 auditor a report of the accountant's examination or audit.The 14.23 legislative auditor shall review the report and accept it ormay 14.24 make additional examinations if these would be in the public 14.25 interest. The working papers of the certified public accountant 14.26 relating to the board must be made available to the legislative 14.27 auditor on request. 14.28 Sec. 15. Minnesota Statutes 1994, section 192.551, is 14.29 amended to read: 14.30 192.551 [ARMY REGULATIONS TO APPLY.] 14.31 All money and property received from any source for the 14.32 military forces shall be kept, disbursed, and accounted for as 14.33 prescribed by army regulations, where applicable, otherwise as 14.34 prescribed by state rules. All such accounts shall be examined 14.35 and audited at least once annually by officers of the military 14.36 forces detailed by the adjutant general as military auditors. 15.1 The adjutant general shall file a copy of the report of every15.2 such examination with the legislative auditor.This shall not 15.3 preclude other examinations of such accounts by the legislative 15.4 auditor as authorized by law. The legislative auditor may15.5 appoint any military auditor as an assistant examiner, with all15.6 the powers incident thereto, in connection with the examination15.7 of such accounts. The provisions of the state civil service act15.8 shall not be applicable to such appointments.15.9 Sec. 16. Minnesota Statutes 1994, section 256E.05, 15.10 subdivision 3a, is amended to read: 15.11 Subd. 3a. [DEMONSTRATION PROJECT.] (a) The commissioner 15.12 may establish demonstration projects to test alternatives to 15.13 existing state requirements. 15.14 (b) At least one demonstration project may be developed to 15.15 demonstrate alternative methods of social services planning. 15.16 For the purposes of this demonstration project, the commissioner: 15.17 (1) shall allow participating counties to combine all 15.18 social services plans into one comprehensive plan unless a 15.19 separate plan is necessary to comply with federal regulations or 15.20 maintain federal financial participation; 15.21 (2) may waive social service program maintenance of effort 15.22 requirements not required to comply with federal regulations or 15.23 maintain federal financial participation, at the request of a 15.24 county or counties participating in the planning process; 15.25 (3) may exempt counties participating in the planning 15.26 demonstration from fiscal sanctions for noncompliance with 15.27 social services requirements in state statute, provided the 15.28 county proposal includes a schedule of fines for noncompliance 15.29 approved by the commissioner; 15.30 (4) may establish a county match requirement for social 15.31 services. If the county has spent or obligated all of its state 15.32 and federal social services funds and the required matching 15.33 funds, the county must be considered to be making reasonable 15.34 efforts to comply with all state social services requirements as 15.35 required in section 256E.081, subdivision 2, and is not required 15.36 to provide social services beyond the services included in the 16.1 county's amended community social services plan; and 16.2 (5) shall require participating counties to describe the 16.3 system to be used to evaluate performance under the combined 16.4 county plan. 16.5 (c) At least one demonstration project may be developed to 16.6 test alternative methods of delivering services to persons with 16.7 developmental disabilities or persons with mental illness. 16.8 (d) Up to six demonstration projects may be established to 16.9 test alternatives to existing requirements that maintain or 16.10 enhance services but reduce administrative burdens, eliminate 16.11 unnecessary or excessive paperwork, simplify or consolidate 16.12 requirements, or otherwise reduce administrative costs and 16.13 complexity of social services programs. 16.14 (e) The commissioner shall consult with county staff, 16.15 service providers, and service recipients or their advocates in 16.16 the selection of the proposals for the demonstration projects. 16.17 (f) In selecting the demonstration projects, the 16.18 commissioner may give preference to proposals submitted by two 16.19 or more counties. 16.20 (g) During the duration of the demonstration projects, the 16.21 commissioner may waive administrative rule requirements in the 16.22 demonstration counties if the proposal demonstrates that the 16.23 needs the requirements were developed to address can be met 16.24 using an alternative approach. The commissioner shall not waive 16.25 rule requirements which affect an individual's eligibility for 16.26 services or right to due process. 16.27 (h) If the county fails to meet the conditions in the 16.28 demonstration project proposal as approved by the commissioner, 16.29 the commissioner may rescind the waiver of the rule requirements. 16.30 (i) The demonstration projects must be completed by July 1, 16.31 1995. 16.32 (j) The legislative auditor shall evaluate the results of16.33 the demonstration projects.16.34 (k)If the results of the demonstration projects indicate 16.35 that the needs the administrative rule requirements were 16.36 developed to address can be met by means that are less costly 17.1 and less prescriptive, and that give counties greater 17.2 flexibility when providing social services, the commissioner may 17.3 amend or repeal the appropriate social services rule requirement 17.4 under chapter 14. If the requirement is specified in statute, 17.5 the commissioner shall recommend legislative changes in the 17.6 biennial state plan under section 256E.04, subdivision 1. 17.7 Sec. 17. Minnesota Statutes 1994, section 268.12, 17.8 subdivision 8, is amended to read: 17.9 Subd. 8. [RECORDS; REPORTS.] (1) Each employing unit shall 17.10 keep true and accurate records for such periods of time and 17.11 containing such information as the commissioner may prescribe. 17.12 For the purpose of determining compliance with this chapter, or 17.13 for the purpose of collection of any amounts due under this 17.14 chapter, the commissioner or any authorized representative of 17.15 the commissioner has the power to examine, or cause to be 17.16 examined or copied, any books, correspondence, papers, records, 17.17 or memoranda which are relevant to making these determinations, 17.18 whether the books, correspondence, papers, records, or memoranda 17.19 are the property of or in the possession of the employing unit 17.20 or any other person or corporation at any reasonable time and as 17.21 often as may be necessary. 17.22 (2) The commissioner or any other duly authorized 17.23 representative of the commissioner may cause to be made such 17.24 summaries, compilations, photographs, duplications, or 17.25 reproductions of any records, reports, or transcripts thereof as 17.26 the commissioner may deem advisable for the effective and 17.27 economical preservation of the information contained therein, 17.28 and such summaries, compilations, photographs, duplications or 17.29 reproductions, duly authenticated, shall be admissible in any 17.30 proceeding under this chapter, if the original record or records 17.31 would have been admissible therein. Notwithstanding any 17.32 restrictions contained in section 16B.50, except restrictions as 17.33 to quantity, the commissioner is hereby authorized to duplicate, 17.34 on equipment furnished by the federal government or purchased 17.35 with funds furnished for that purpose by the federal government, 17.36 records, reports, summaries, compilations, instructions, 18.1 determinations, or any other written matter pertaining to the 18.2 administration of the Minnesota economic security law. 18.3 (3) Notwithstanding any inconsistent provisions elsewhere, 18.4 the commissioner may provide for the destruction or disposition 18.5 of any records, reports, transcripts, or reproductions thereof, 18.6 or other papers in the commissioner's custody, which are more 18.7 than two years old, the preservation of which is no longer 18.8 necessary for the establishment of contribution liability or 18.9 benefit rights or for any purpose necessary to the proper 18.10 administration of this chapter, including any required audit 18.11 thereof, provided, that the commissioner may provide for the 18.12 destruction or disposition of any record, report, or transcript, 18.13 or other paper in the commissioner's custody which has been 18.14 photographed, duplicated, or reproduced. 18.15 (4) Notwithstanding the provisions of the Minnesota State 18.16 Archives Act the commissioner shall with the approval of the18.17 legislative auditordestroy all benefit checks and benefit check 18.18 authorization cards that are more than two years old and no 18.19 person shall make any demand, bring any suit or other proceeding 18.20 to recover from the state of Minnesota any sum alleged to be due 18.21 on any claim for benefits after the expiration of two years from 18.22 the date of filing such claim. 18.23 Sec. 18. Minnesota Statutes 1994, section 352.03, 18.24 subdivision 6, is amended to read: 18.25 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 18.26 management of the system is vested in the director, who is the 18.27 executive and administrative head of the system. The director 18.28 shall be advisor to the board on matters pertaining to the 18.29 system and shall also act as the secretary of the board. The 18.30 director shall: 18.31 (1) attend meetings of the board; 18.32 (2) prepare and recommend to the board appropriate rules to 18.33 carry out this chapter; 18.34 (3) establish and maintain an adequate system of records 18.35 and accounts following recognized accounting principles and 18.36 controls; 19.1 (4) designate an assistant director with the approval of 19.2 the board; 19.3 (5) appoint any employees, both permanent and temporary, 19.4 that are necessary to carry out the provisions of this chapter; 19.5 (6) organize the work of the system as the director deems 19.6 necessary to fulfill the functions of the system, and define the 19.7 duties of its employees and delegate to them any powers or 19.8 duties, subject to the control of the director and under 19.9 conditions the director may prescribe. Appointments to exercise 19.10 delegated power must be by written order and shall be filed with 19.11 the secretary of state; 19.12 (7) with the advice and consent of the board, contract for 19.13 the services of an approved actuary, professional management 19.14 services, and any other consulting services as necessary and fix 19.15 the compensation for those services. The contracts are not 19.16 subject to competitive bidding under chapter 16B. Any approved 19.17 actuary retained by the executive director shall function as the 19.18 actuarial advisor of the board and the executive director, and 19.19 may perform actuarial valuations and experience studies to 19.20 supplement those performed by the actuary retained by the 19.21 legislative commission on pensions and retirement. Any 19.22 supplemental actuarial valuations or experience studies shall be 19.23 filed with the executive director of the legislative commission 19.24 on pensions and retirement. Professional management services 19.25 may not be contracted for more often than once in six years. 19.26 Copies of professional management survey reports must be 19.27 transmitted to the secretary of the senate, the chief clerk of 19.28 the house of representatives, and the legislative reference 19.29 library as provided by section 3.195, and to the executive 19.30 director of the commission and to the legislative auditorat the 19.31 time as reports are furnished to the board. Only management 19.32 firms experienced in conducting management surveys of federal, 19.33 state, or local public retirement systems are qualified to 19.34 contract with the director; 19.35 (8) with the advice and consent of the board provide 19.36 in-service training for the employees of the system; 20.1 (9) make refunds of accumulated contributions to former 20.2 state employees and to the designated beneficiary, surviving 20.3 spouse, legal representative, or next of kin of deceased state 20.4 employees or deceased former state employees, as provided in 20.5 this chapter; 20.6 (10) determine the amount of the annuities and disability 20.7 benefits of employees covered by the system and authorize 20.8 payment of the annuities and benefits beginning as of the dates 20.9 on which the annuities and benefits begin to accrue, in 20.10 accordance with the provisions of this chapter; 20.11 (11) pay annuities, refunds, survivor benefits, salaries, 20.12 and necessary operating expenses of the system; 20.13 (12) certify funds available for investment to the state 20.14 board of investment; 20.15 (13) with the advice and approval of the board request the 20.16 state board of investment to sell securities when the director 20.17 determines that funds are needed for the system; 20.18 (14) prepare and submit to the board and the legislature an 20.19 annual financial report covering the operation of the system, as 20.20 required by section 356.20; 20.21 (15) prepare and submit biennial and annual budgets to the 20.22 board and with the approval of the board submit the budgets to 20.23 the department of finance; and 20.24 (16) with the approval of the board, perform other duties 20.25 required to administer the retirement and other provisions of 20.26 this chapter and to do its business. 20.27 Sec. 19. Minnesota Statutes 1994, section 353.03, 20.28 subdivision 3a, is amended to read: 20.29 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 20.30 board shall appoint, with the advice and consent of the senate, 20.31 an executive director on the basis of education, experience in 20.32 the retirement field, and leadership ability. The executive 20.33 director shall have had at least five years' experience in an 20.34 executive level management position, which has included 20.35 responsibility for pensions, deferred compensation, or employee 20.36 benefits. The executive director serves at the pleasure of the 21.1 board. The salary of the executive director is as provided by 21.2 section 15A.081, subdivision 1. 21.3 (b) [DUTIES.] The management of the association is vested 21.4 in the executive director who shall be the executive and 21.5 administrative head of the association. The executive director 21.6 shall act as adviser to the board on all matters pertaining to 21.7 the association and shall also act as the secretary of the 21.8 board. The executive director shall: 21.9 (1) attend all meetings of the board; 21.10 (2) prepare and recommend to the board appropriate rules to 21.11 carry out the provisions of this chapter; 21.12 (3) establish and maintain an adequate system of records 21.13 and accounts following recognized accounting principles and 21.14 controls; 21.15 (4) designate, with the approval of the board, up to two 21.16 persons who shall serve in the unclassified service and whose 21.17 salary is set in accordance with section 43A.18, subdivision 3, 21.18 appoint a confidential secretary in the unclassified service, 21.19 and appoint employees to carry out this chapter, who are subject 21.20 to chapters 43A and 179A in the same manner as are executive 21.21 branch employees; 21.22 (5) organize the work of the association as the director 21.23 deems necessary to fulfill the functions of the association, and 21.24 define the duties of its employees and delegate to them any 21.25 powers or duties, subject to the control of, and under such 21.26 conditions as, the executive director may prescribe; 21.27 (6) with the approval of the board, contract for the 21.28 services of an approved actuary, professional management 21.29 services, and any other consulting services as necessary to 21.30 fulfill the purposes of this chapter. All contracts are subject 21.31 to chapter 16B. The commissioner of administration shall not 21.32 approve, and the association shall not enter into, any contract 21.33 to provide lobbying services or legislative advocacy of any 21.34 kind. Any approved actuary retained by the executive director 21.35 shall function as the actuarial advisor of the board and the 21.36 executive director and may perform actuarial valuations and 22.1 experience studies to supplement those performed by the actuary 22.2 retained by the legislative commission on pensions and 22.3 retirement. Any supplemental actuarial valuations or experience 22.4 studies shall be filed with the executive director of the 22.5 legislative commission on pensions and retirement. Copies of 22.6 professional management survey reports shall be transmitted to 22.7 the secretary of the senate, the chief clerk of the house of 22.8 representatives, and the legislative reference library as 22.9 provided by section 3.195, and to the executive director of the 22.10 commission and to the legislative auditorat the same time as 22.11 reports are furnished to the board. Only management firms 22.12 experienced in conducting management surveys of federal, state, 22.13 or local public retirement systems shall be qualified to 22.14 contract with the director hereunder; 22.15 (7) with the approval of the board provide in-service 22.16 training for the employees of the association; 22.17 (8) make refunds of accumulated contributions to former 22.18 members and to the designated beneficiary, surviving spouse, 22.19 legal representative or next of kin of deceased members or 22.20 deceased former members, as provided in this chapter; 22.21 (9) determine the amount of the annuities and disability 22.22 benefits of members covered by the association and authorize 22.23 payment of the annuities and benefits beginning as of the dates 22.24 on which the annuities and benefits begin to accrue, in 22.25 accordance with the provisions of this chapter; 22.26 (10) pay annuities, refunds, survivor benefits, salaries, 22.27 and necessary operating expenses of the association; 22.28 (11) prepare and submit to the board and the legislature an 22.29 annual financial report covering the operation of the 22.30 association, as required by section 356.20; 22.31 (12) prepare and submit biennial and annual budgets to the 22.32 board for its approval and submit the approved budgets to the 22.33 department of finance for approval by the commissioner; 22.34 (13) reduce all or part of the accrued interest payable 22.35 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 22.36 subdivision 5, upon receipt of proof by the association of an 23.1 unreasonable processing delay or other extenuating circumstances 23.2 of the employing unit. The executive director shall prescribe 23.3 and submit for approval by the board the conditions under which 23.4 such interest may be reduced; and 23.5 (14) with the approval of the board, perform such other 23.6 duties as may be required for the administration of the 23.7 association and the other provisions of this chapter and for the 23.8 transaction of its business. 23.9 Sec. 20. Minnesota Statutes 1994, section 353A.05, 23.10 subdivision 1, is amended to read: 23.11 Subdivision 1. [COMMISSION ACTIONS.] Upon initiation of 23.12 consolidation as provided in section 353A.04, the executive 23.13 director of the commission shall direct the actuary retained by 23.14 the commission to undertake the preparation of the actuarial 23.15 calculations necessary to complete the consolidation. 23.16 These actuarial calculations shall include for each active 23.17 member, each deferred former member, each retired member, and 23.18 each current beneficiary the computation of the present value of 23.19 future benefits, the future normal costs, if any, and the 23.20 actuarial accrued liability on the basis of the existing relief 23.21 association benefit plan and on the basis of the public 23.22 employees police and fire fund benefit plan. These actuarial 23.23 calculations shall also include for the total active, deferred, 23.24 retired, and benefit recipient membership the sum of the present 23.25 value of future benefits, the future normal costs, if any, and 23.26 the actuarial accrued liability on the basis of the existing 23.27 relief association benefit plan, on the basis of the public 23.28 employees police and fire fund benefit plan, and on the basis of 23.29 the benefit plan which produced the largest present value of 23.30 future benefits for each person. The actuarial calculations 23.31 shall be prepared using the entry age actuarial cost method for 23.32 all components of the benefit plan and using the actuarial 23.33 assumptions applicable to the fund for the most recent actuarial 23.34 valuation prepared under section 356.215, except that the 23.35 actuarial calculations on the basis of the existing relief 23.36 association benefit plan shall be prepared using an interest 24.1 rate actuarial assumption during the postretirement period which 24.2 is in the same amount as the interest rate actuarial assumption 24.3 applicable to the preretirement period. The actuarial 24.4 calculations shall include the computation of the present value 24.5 of the initial postretirement adjustment anticipated by the 24.6 executive director of the state board as payable after the 24.7 effective date of the consolidation from the Minnesota 24.8 postretirement investment fund under section 11A.18. 24.9 The chief administrative officer of the relief association 24.10 shall, upon request, provide in a timely manner to the executive 24.11 director of the commission and to the actuary retained by the 24.12 commission the most current available information or documents, 24.13 whichever applies, regarding the demographics of the active, 24.14 deferred, retired, and benefit recipient membership of the 24.15 relief association, the financial condition of the relief 24.16 association, and the existing benefit plan of the relief 24.17 association. 24.18 Upon completion of the actuarial calculations required by 24.19 this subdivision, the actuary retained by the commission shall 24.20 issue a report in the form of an appropriate summary of the 24.21 actuarial calculations and shall provide a copy of that report 24.22 to the executive director of the commission, the executive 24.23 director of the public employees retirement association, the 24.24 chief administrative officer of the relief association, the 24.25 chief administrative officer of the municipality in which the 24.26 relief association is located, and the state auditor , and the24.27 legislative auditor. 24.28 Sec. 21. Minnesota Statutes 1994, section 354.06, 24.29 subdivision 2a, is amended to read: 24.30 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 24.31 of the association is vested in the executive director who shall 24.32 be the executive and administrative head of the association. 24.33 The executive director shall act as advisor to the board on all 24.34 matters pertaining to the association and shall also act as the 24.35 secretary of the board. The executive director shall: 24.36 (1) attend all meetings of the board; 25.1 (2) prepare and recommend to the board appropriate rules to 25.2 carry out the provisions of this chapter; 25.3 (3) establish and maintain an adequate system of records 25.4 and accounts following recognized accounting principles and 25.5 controls; 25.6 (4) designate an assistant executive director in the 25.7 unclassified service and two assistant executive directors in 25.8 the classified service with the approval of the board, and 25.9 appoint such employees, both permanent and temporary, as are 25.10 necessary to carry out the provisions of this chapter; 25.11 (5) organize the work of the association as the director 25.12 deems necessary to fulfill the functions of the association, and 25.13 define the duties of its employees and delegate to them any 25.14 powers or duties, subject to the director's control and under 25.15 such conditions as the director may prescribe; 25.16 (6) with the approval of the board, contract and set the 25.17 compensation for the services of an approved actuary, 25.18 professional management services, and any other consulting 25.19 services. These contracts are not subject to the competitive 25.20 bidding procedure prescribed by chapter 16B. An approved 25.21 actuary retained by the executive director shall function as the 25.22 actuarial advisor of the board and the executive director and 25.23 may perform actuarial valuations and experience studies to 25.24 supplement those performed by the actuary retained by the 25.25 legislative commission on pensions and retirement. Any 25.26 supplemental actuarial valuations or experience studies shall be 25.27 filed with the executive director of the legislative commission 25.28 on pensions and retirement. Copies of professional management 25.29 survey reports must be transmitted to the secretary of the 25.30 senate, the chief clerk of the house of representatives, and the 25.31 legislative reference library as provided by section 3.195, and 25.32 to the executive director of the commission and to the25.33 legislative auditorat the same time as reports are furnished to 25.34 the board. Only management firms experienced in conducting 25.35 management surveys of federal, state, or local public retirement 25.36 systems are qualified to contract with the executive director; 26.1 (7) with the approval of the board, provide in-service 26.2 training for the employees of the association; 26.3 (8) make refunds of accumulated contributions to former 26.4 members and to the designated beneficiary, surviving spouse, 26.5 legal representative, or next of kin of deceased members or 26.6 deceased former members, under this chapter; 26.7 (9) determine the amount of the annuities and disability 26.8 benefits of members covered by the association and authorize 26.9 payment of the annuities and benefits beginning as of the dates 26.10 on which the annuities and benefits begin to accrue, under this 26.11 chapter; 26.12 (10) pay annuities, refunds, survivor benefits, salaries, 26.13 and necessary operating expenses of the association; 26.14 (11) prepare and submit to the board and the legislature an 26.15 annual financial report covering the operation of the 26.16 association, as required by section 356.20; 26.17 (12) certify funds available for investment to the state 26.18 board of investment; 26.19 (13) with the advice and approval of the board, request the 26.20 state board of investment to sell securities on determining that 26.21 funds are needed for the purposes of the association; 26.22 (14) prepare and submit biennial and annual budgets to the 26.23 board and with the approval of the board submit those budgets to 26.24 the department of finance; and 26.25 (15) with the approval of the board, perform such other 26.26 duties as may be required for the administration of the 26.27 association and the other provisions of this chapter and for the 26.28 transaction of its business. The executive director may: 26.29 (i) reduce all or part of the accrued interest and fines 26.30 payable by an employing unit for reporting requirements under 26.31 section 354.52, based on an evaluation of any extenuating 26.32 circumstances of the employing unit; 26.33 (ii) assign association employees to conduct field audits 26.34 of an employing unit to ensure compliance with the provisions of 26.35 this chapter; and 26.36 (iii) recover overpayments, if not repaid to the 27.1 association, by suspending or reducing the payment of a 27.2 retirement annuity, refund, disability benefit, survivor 27.3 benefit, or optional annuity under this chapter until the 27.4 overpayment, plus interest, has been recovered. 27.5 Sec. 22. Minnesota Statutes 1994, section 360.015, 27.6 subdivision 19, is amended to read: 27.7 Subd. 19. [KEEP BOOKS AND RECORDS.] The commissioner shall 27.8 keep accurate and complete books of account of such character as27.9 may be prescribed by the legislative auditor, the sameto show 27.10 in detail itemized receipts and disbursements of the airports 27.11 fund. The books shall show , and it shall be the duty of the27.12 legislative auditor to so prescribe,the following facts, among 27.13 others: 27.14 (a) The expenses of maintaining the department, including 27.15 the salaries and expenses of the individual members thereof; 27.16 (b) The amounts of money expended in each county of the 27.17 state for the construction or maintenance of airports or 27.18 restricted landing areas, when, where, and upon what airport or 27.19 restricted landing area expended, so that the cost for each such 27.20 airport or restricted landing area can be easily ascertained; 27.21 (c) The amount of equipment and materials purchased and 27.22 when, where, and from whom purchased; these books shall show the 27.23 price paid for each item; the original invoice shall form a part 27.24 of the permanent files and records in the department and shall 27.25 be open to public inspection. 27.26 Sec. 23. Minnesota Statutes 1994, section 609.456, is 27.27 amended to read: 27.28 609.456 [REPORTING TO STATEAUDITOR REQUIRED.] 27.29 Subdivision 1. [STATE AUDITOR.] Whenever a public employee 27.30 or public officer of a political subdivision discovers evidence 27.31 of theft, embezzlement, or unlawful use of public funds or 27.32 property, the employee or elected officialofficer shall, except 27.33 when to do so would knowingly impede or otherwise interfere with 27.34 an ongoing criminal investigation, promptly report in writing to 27.35 the state auditor a detailed description of the alleged incident 27.36 or incidents. 28.1 Subd. 2. [LEGISLATIVE AUDITOR.] Whenever a public employee 28.2 or public officer of the state, the University of Minnesota, or 28.3 any other public entity subject to audit by the legislative 28.4 auditor discovers evidence of theft, embezzlement, or unlawful 28.5 use of public funds or property, the employee or officer shall, 28.6 except when to do so would knowingly impede or otherwise 28.7 interfere with an ongoing criminal investigation, promptly 28.8 report in writing to the legislative auditor a detailed 28.9 description of the alleged incident or incidents. 28.10 Sec. 24. [REPEALER.] 28.11 Minnesota Statutes 1994, sections 3.973; 136A.29, 28.12 subdivision 19; 256B.04, subdivision 11; 469.207, subdivision 1; 28.13 574.02; and 574.03, are repealed.