When there is too little competition, prices go up and quality goes down. That’s especially true when the government is the only game in town.
Counties are required by law to receive an audit. And for years, Minnesota’s Office of State Auditor (OSA) was the only choice when it came to auditing counties. Not only that, but the taxpayer funded OSA still required counties to pay for the audits.
Understandably, many counties were unhappy with that set-up. Audits took too long, and the OSA arguably overcharged counties, and thus local taxpayers.
But in 2015, the state legislature passed a law to allow counties to choose who would do their mandated audit. Instead of the OSA, they could go to a private CPA firm. Predictably, former governor Mark Dayton opposed allowing counties choice, but the provision was part of an overall package so Dayton signed the bill anyway.
Counties rejoiced: For example, Becker County Administrator Jack Ingstad was quoted as saying that “We actually think we get a better audit from a CPA firm, and it’s considerably cost-effective for us, a lot cheaper.”
A review by the Office of the Legislative Auditor also found that counties would save money by receiving competitive bids for audits (imagine that).
In total, 44 counties chose to hire a private auditor right after the 2015 law change.
But far-left former State Auditor, Democrat Rebecca Otto, had a conniption. Instead of making sure her office did a better job, she went and blew over $100,000 suing three of those counties for daring to go against the OSA’s monopoly.
Otto didn’t just sue two of the many counties—including Wright county—who wanted to use a CPA, she also sued Ramsey county for daring to refuse to sign a 3-year contract, with what appeared to be uncertain pricing terms. All Ramsey wanted to do was go for “a year-by-year approach,” but Democrat Otto, backed by taxpayer dollars, sued anyway.
In the end, Otto lost three times, all the way up to the Minnesota Supreme Court, which ruled unanimously against her. But damage had been done.
The brunt of Otto’s wasteful suit went after not-highly-populated Wright County, with a population of about 130,000. Wright ended up with about $70,000 in legal bills defending itself in the suit.
Thankfully, Rep. Eric Lucero (R-Dayton) and Sen. Mary Kiffmeyer (R-Big Lake) authored a bill to reimburse Wright County for the costs it incurred to defend the Otto case. That bill passed, and Wright received its money back.
“The lawsuit brought by former State Auditor Rebecca Otto was arbitrary and frivolous from the beginning and this was confirmed with former Auditor Otto losing her lawsuit at every level including a unanimous ruling against her by the Minnesota Supreme Court,” Lucero said.
Wright County taxpayers have been reimbursed, but Minnesota’s have not. If only this were the only example of government waste and abuse in Minnesota.
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Willis Krumholz
Willis L. Krumholz is a fellow at Defense Priorities. He holds a JD and MBA degree from the University of St. Thomas, and works in the financial services industry. The views expressed are those of the author only. You can follow Willis on Twitter @WillKrumholz.
