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State Representative Ryan Winkler
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-7026
For more information contact: Matt Swenson 651-297-8406
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FEDERAL RECOVERY FUNDS THREATENED BY WEAK INTERNAL CONTROLS IN STATE GOVERNMENT
ST. PAUL - The most critical Legislative Audit report to date was released yesterday detailing a troubling lack of financial oversight across state agencies in Minnesota. Poor internal controls within the Pawlenty Administration have led to widespread fraud and mismanagement in handling state and federal monies, costing taxpayers millions in lost or unaccounted for revenues. These findings have led lawmakers to question whether $9.1 billion in federal recovery funding can be managed responsibly without immediate, significant reform.
“You need more than a website and a prayer to manage the state’s business," said State Rep. Ryan Winkler (DFL - Golden Valley). “Minnesotans expect better, responsible government. When billions of federal dollars are coming to Minnesota to rebuild our infrastructure and kick-start Minnesota’s economy, we need to make certain every dime is well-spent and accounted for.”
This week’s OLA report pointed to nearly 30 weak spots in state government accounting systems across 9 state agencies including the departments of Finance, Employment and Economic Development, Education, Heath, Human Services, and more. Each agency has been cited for poor oversight and egregious mismanagement of state and federal funds. The report consistently points to a lack of compliance with federal audit requirements, and a troubling trail of undocumented, unanswered questions as to where and how state resources are spent.
“When millions of dollars go missing at the hands of state government, that’s no coincidence - that’s a system-wide breakdown in accountability,” said Rep. Winkler.
Based on a host of troubling OLA findings over the last several months, Winkler is skeptical about Governor Pawlenty’s current system for distributing federal recovery funds in Minnesota. Pawlenty has appointed Finance Commissioner Tom Hanson as the sole overseer of all ARRA monies coming into the State of Minnesota. Rep. Winkler is concerned that handling a $36 billion budget, a $6.4 billion budget deficit, and more than $9 billion in federal funds may be too much for just one person.
“Considering this administration’s history of letting our limited resources slip through the cracks, I don’t share the governor’s trust in giving Commissioner Hanson sole authority over $9 billion in federal recovery funds,” said Winkler. “Commissioner Hanson needs to focus all his attention on fixing our system of leaking financial levies, not overseeing billions in new money coming from Washington.”
Hanson too is skeptical of his agency’s ability to manage this mammoth project. Having eliminated all internal auditors at the Department of Finance due to a 30% budget cut over the last 7 years, Hanson’s agency is understaffed and underprepared to properly handle incoming federal recovery funds. In an interview yesterday Hanson said, “We are faced with an unprecedented challenge of spending a lot of federal money quickly. And I think as we go forward we will need some additional financial assistance with our agency in order to meet the federal reporting requirements.”
More than additional financial assistance for the state’s Finance Department, Rep. Winkler is calling for a comprehensive restructuring of how federal recovery funds are accounted for and delivered in the State of Minnesota.
“Governor Pawlenty has two things in common with Bobby Jindal, Sarah Palin, and Mark Sanford - presidential ambitions and the weakest accountability systems in the country for tracking and spending federal recovery funds.”
Other states have established stronger, more accountable systems to ensure federal monies are well-spent in their efforts for economic recovery. A comprehensive list of those systems in comparison to Minnesota can be found on the National Conference of State Legislatures website at www.ncsl.org/programs/fiscal/stimulusoversight.htm.
Spurred by this troubling trend of mismanagement at state agencies in Minnesota, Rep. Winkler has introduced several bills this session to enhance oversight and accountability in state government. These bills would do the following:
• Establish new, more accountable procedures for internal controls and auditing in state government
• Enact new criminal penalties for state employees who knowingly misuse state resources
Winkler is committed to serious reform in state government to ensure every tax dollar, including over $9 billion in new funding from the federal government, is well-protected and spent wisely to rebuild Minnesota’s struggling economy.
News Items
- Statement on Budget Forecast - (Posted: 2012-12-05 00:00:00)
- Statement on Final I-35 W Bridge Settlement - (Posted: 2012-11-13 00:00:00)
- Rep. Winkler: Tea Party Activists Can’t Be Trusted to Reform Our Elections - (Posted: 2012-11-01 00:00:00)
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