The Perils of Picking a Fight with the Legislative Auditor
Editor’s note: This is the second of three guest commentaries by Chuck Johnson, former deputy commissioner of the Department of Human Services, on the subject of fraud in government programs. [Read part 1](link to part 1).
During my tenure at the Minnesota Department of Human Services, I frequently advised new commissioners on navigating impending reports from the Office of the Legislative Auditor (OLA). My consistent counsel: Avoid conflict with the OLA. This stems from the OLA’s reputation for thoroughness and unimpeachable integrity; their work is the legislative gold standard. Attempts at rebuttal are futile; you will lose.
While historically the OLA’s strength rested solely on the quality of its work, Legislative Auditor Judy Randall recently voiced concerns about state agencies’ insufficient engagement with OLA findings and recommendations. The primary points of contention revolve around reports on Feeding Our Future and the front-line worker pay program. In both instances, state agencies publicly challenged the OLA’s conclusions. I will elaborate on Feeding Our Future in a later piece, but the “hero checks” program exemplifies how reasonable policy discussions can be derailed post-OLA report. This commentary, therefore, contradicts my own prior advice.
The OLA’s Narrative and its Impact
The OLA’s reports establish a dominant narrative. They offer a pre-packaged story—complete with verified facts—perfectly suited for media consumption. Legislative hearings, a common accompaniment to report releases, further fuel political controversy. The agency under scrutiny immediately finds itself on the defensive, particularly during public hearings where the OLA frames the issue for public consumption.
This dynamic intensifies given the executive branch’s (and Governor’s) affiliation with the agencies, creating a political chess game depending on legislative control. Further, these reports often reinforce the Republican narrative of government inefficiency and waste. While agencies typically respond with plans to rectify identified problems—a crucial aspect of improving government service—these responses often don’t fully represent the agency’s perspective. A power imbalance exists, effectively setting the narrative: the agency failed.
The “Hero Checks” Case Study
The front-line worker pay program exemplifies this power imbalance. Agencies pushed back, arguing the OLA disregarded legislative intent. The Legislature prioritized swift distribution of the “hero checks”—intended to recognize pandemic-era work—by mid-2022. Flexibility in balancing speed and eligibility verification was explicitly granted to the agencies.
The OLA, while appropriately consulting the source, recommended that the Legislature assess acceptable risk levels for future programs. The bill’s authors countered, emphasizing their awareness of the risks and their deliberate balancing act between risk and policy goals.
Rather than accepting this policy decision, the OLA questioned the Legislature’s choice to grant agencies broad flexibility. Their audit went beyond legal requirements, employing employer verification to assess eligibility. The OLA’s main concern was the Department of Labor and Industry’s reliance on self-attestation, a standard practice (akin to annual tax filing).
The DLI considered employer contact but feared delays and unreliable information, a judgment the OLA’s own employer survey ironically confirmed: one-third of surveyed employers failed to provide complete information. The OLA categorized these cases as having “undetermined eligibility.” This distinction, while meaningful to auditors, is less so in program operations; lacking contradictory information, self-attested information was deemed sufficient for eligibility.
The resulting public perception—fueled by a confusing narrative—was that 40% of checks went to undeserving recipients, even fraudsters. A more accurate interpretation of the report suggests 0.2% ineligibility, with actual fraud representing a fraction of that. In most sectors, 99.8% accuracy is considered quite high.
Conclusion: A Call for Better Dialogue
The OLA’s approach was arguably flawed. Government agencies must accept audits as an integral part of accountability. High-level agency personnel must develop resilience, accepting criticism and implementing corrective actions. However, flawed audits are frustrating. Ideally, future OLA releases should foster more open dialogue, acknowledging agency perspectives and understanding policy complexities. While I am not optimistic, it’s probably best to avoid conflict with the OLA.
Chuck Johnson, Minnesota Reformer, December 11, 2024
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