Don’t get into a fight with the Office of Legislative Auditor. Okay, just this once.

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, and part 3.

During my time with the Minnesota Department of Human Services, I had several opportunities to advise new commissioners on how to approach a pending report from the Office of the Legislative Auditor. 

My advice was always the same: Don’t get into a fight with the OLA.

This is partly because the OLA does good work — they are thorough, and their reputation is unassailable. Their work is considered the gold standard by legislators. 

You can try to fight, but you will lose. 

While the OLA has historically stood on the strength of their work, recently Legislative Auditor Judy Randall has publicly spoken about her concerns that state agencies are not taking the OLA’s findings and recommendations seriously.

The major points of contention appear to be the reports on Feeding Our Future and the front line worker pay program. In both cases, the state agencies publicly pushed back on the OLA. 

I will be writing more about Feeding Our Future, but I do think the front line worker program — the “hero checks” for people who worked on the front lines during the pandemic — is an example of how reasonable conversation on a public policy issue can be stifled after the release of an OLA report.  

In other words, here I go ignoring my own advice about not taking on the OLA. 

Let’s start with the basics. 

When the OLA issues a report, it establishes a narrative on a given issue. OLA reports are a perfect set-up for the media: A ready-made story with already confirmed facts and immediate access to political controversy via the legislative hearings that accompany the release of most reports. 

The narrative immediately puts the scrutinized agency on the defensive. And, on high-profile reports, this happens in real time at a public hearing where the issue is framed for the public by the OLA.

Since agencies are part of the executive branch — led by the governor — it creates a political dynamic that can vary depending on control of the Legislature. OLA reports also play to the benefit of Republicans because they reinforce the preferred GOP narrative that government is ineffective and wastes money. 

Often enough, the agency’s official response is a recitation of plans to correct the problems identified in the report. That’s as it should be — audits are a vital part of improving compliance and performance in government services. 

While these sentiments in the agency response letters are sincere, I know from experience they often don’t reflect the agency’s full view. 

There’s a power imbalance that makes it difficult, at best, for agencies to push back. The narrative has been set: The agency screwed up.

With the front line worker pay program, the agencies decided to push back. 

The agencies’ primary concern was that the OLA disregarded the Legislature’s intent in designing the program. 

The Legislature wanted to put hero checks in workers’ hands quickly. It was already mid-2022 and the checks were intended to recognize work done during the depths of the pandemic two years earlier. The Legislature gave the agencies flexibility to design procedures that balanced speed with eligibility verification. 

The OLA appropriately went to the source, and recommended the Legislature consider the amount of risk the state is willing to take in establishing future programs. 

The legislators involved in crafting the bill pushed back, making clear they did understand the risks and wrote the legislation to balance those risks with their policy goals.  

The OLA could have accepted the elected officials’ policy decisions and simply audited the agencies based on how they carried out the legislative intent. 

Instead, the OLA questioned the legislators’ policy decision to give the agencies broad flexibility, and audited the agencies’ eligibility results by going beyond the requirements in the law and testing eligibility through employer verification.  

The OLA’s primary concern was that the Department of Labor and Industry relied on self-attestation in determining eligibility for the checks. Self-attestation is a common tool in such processes. (Like, that thing we do every April 15th). Your signature on the form attests to the accuracy of the information provided, at risk of criminal prosecution. 

DLI considered contacting employers for additional verification. However, in addition to delaying the issuance of checks, DLI was concerned employers would not provide consistently reliable information. 

Ironically, DLI’s judgement was confirmed by the OLA’s own employer survey: About one-third of the employer surveys did not provide all the information sought by the OLA for eligibility verification. 

OLA categorized the cases that lacked affirmative employer confirmation as cases for which they “could not determine eligibility.” 

This may have meaning for auditors, but in the world of program operations, if there is no information that contradicts the self-attested information provided by the applicant, the person is eligible. 

If you didn’t track all that, I doubt you are alone. For the general public, this all becomes a mush of problems, and a prevailing narrative emerged that 40% of hero checks went to people who were undeserving, and even to fraudsters. 

The most reasonable interpretation of the OLA report is that 0.2% of the people that received checks were not eligible. And actual fraud — criminal intent, not just a misunderstanding — would be a fraction of that. In most businesses, 99.8% accuracy is pretty good. 

The OLA could have done this audit differently. I certainly think their approach was flawed.

But if you work in government, audits are part of the business — a critical tool in government accountability. And, if you work at the top level of a state agency you need to develop thick skin — take the hits and make the fixes. 

But when an audit misses the mark, it can be frustrating.  

I guess my hope would be that we could have a different conversation when the OLA releases an audit. We could be open to hearing agency concerns and try to understand the nuances of the policy and operational choices. 

I’m not holding my breath. It’s probably best not to pick a fight with the OLA.