Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 99-H.F.No. 1003
An act relating to legislature; prescribing the powers
and duties of the legislative audit commission and the
legislative auditor; making various technical changes;
amending Minnesota Statutes 1998, sections 3.97;
3.971; 3.974; 3.975; 6.74; 10.48; 13.46, subdivision
8; 16A.27, subdivision 2; 37.06; 37.07; 85A.02,
subdivision 5c; 89.05; 161.08; 192.551; 352.03,
subdivision 6; 353.03, subdivision 3a; 353A.05,
subdivision 1; 354.06, subdivision 2a; 360.015,
subdivision 19; 574.20; and 609.456; Laws 1990,
chapter 535, section 5; repealing Minnesota Statutes
1998, sections 3.973; 116.072, subdivision 12;
469.207, subdivision 1; and 574.02.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 3.97, is
amended to read:
3.97 [AUDIT POLICY; CREATION OF COMMISSION; TRANSFER OF
FUNCTIONS OF PUBLIC EXAMINER; DUTIES OF LEGISLATIVE AUDITOR;
ACCESS TO DATA.]
Subdivision 1. Continuous legislative review of the effect
of grant-in-aid programs, the spending of public funds and their
financing at all levels of government is required in the public
interest to enable the enactment of appropriate legislation.
Subd. 2. The legislative audit commission is created. The
commission consists of:
(1) the majority leader of the senate and the president of
the senate or their designees;
(2) the chair of the senate committee on taxes or a
designee who is a member of the committee;
(3) the chair of the senate committee on governmental
operations and reform or a designee who is a member of the
committee;
(4) (3) the a chair of the a senate committee on
finance or a designee who is a member of the
committee designated by the majority leader;
(5) (4) five four members of the senate appointed by the
senate minority leader;
(6) (5) the speaker of the house and the chair of the house
committee on rules or their designees;
(7) the chair of the house committee on taxes or a designee
who is a member of the committee;
(8) (6) the chair of the house committee on governmental
operations and gaming or a designee who is a member of the
committee;
(9) (7) the chair of the house ways and means committee or
a designee who is a member of the committee; and
(10) (8) five four members of the house appointed by the
house minority leader.
The appointed members of the commission shall serve for a term
commencing upon appointment and expiring at the opening of the
next regular session of the legislature in the odd-numbered year
and until a successor is appointed. A vacancy in the membership
of the commission shall be filled for the unexpired term in a
manner that will preserve the representation established by this
subdivision.
The commission shall meet in January of each odd-numbered
year to elect its chair and other officers as it may determine
necessary. A chair shall serve a two-year term, expiring on
January 1 in the odd-numbered year following election, and until
a successor is elected. The chair shall alternate biennially
between the senate and the house. The commission shall meet at
the call of the chair or the executive secretary. The members
shall serve without compensation but be reimbursed for their
reasonable expenses as members of the legislature. The
commission may exercise the powers prescribed by section 3.153.
Subd. 3. The department of public examiner is transferred
from the executive to the legislative branch.
Subd. 4. The legislative auditor is the executive
secretary of the commission. The legislative auditor shall be
appointed by the commission for a six-year term and serve in the
unclassified service. When in office, the legislative auditor
shall may not at any time while in office hold any other public
office. The legislative auditor shall may not be removed from
office before the expiration of the term of service except for
cause after public hearing.
Subd. 5. The legislative auditor shall establish a
financial audits division and a program evaluation division to
fulfill the duties prescribed in this section. Each division
shall must be supervised by a deputy auditor, appointed by the
legislative auditor, with the approval of the commission, for a
term coterminous with the legislative auditor's term. The
deputy auditors may be removed before the expiration of their
terms only for cause. The legislative auditor and deputy
auditors may each appoint a confidential secretary to serve at
pleasure. The commission shall fix the salaries and benefits of
the legislative auditor, deputy auditors and confidential
secretaries shall be determined by the compensation plan
approved by the legislative coordinating commission. The deputy
auditors may perform and exercise the powers, duties and
responsibilities imposed by law on the legislative auditor when
authorized by the legislative auditor. The deputy auditors and
the confidential secretaries serve in the unclassified civil
service, but all other employees of the legislative auditor are
in the classified civil service. While in office, a person
appointed deputy for the financial audit division must hold an
active license as a certified public accountant.
Subd. 6. All the powers, duties, and responsibilities of
the department of public examiner relating to the state of
Minnesota, its departments and agencies as described in
Minnesota Statutes 1971, section 215.03, and any other law
concerning powers, duties, and responsibilities of the public
examiner not otherwise dealt with by Laws 1973, chapter 492, are
transferred to the legislative auditor. Nothing in this
subdivision shall supersede the powers conferred upon the
commissioner of finance under section 16A.055.
Subd. 7. In addition to the legislative auditing duties
concerning state financial matters, the legislative auditor
shall also exercise and perform duties prescribed by rule of the
legislature or either body of it or by the commission. The
legislative auditor shall review department policies and
evaluate projects or programs requested by the commission. Any
standing legislative committee having legislative jurisdiction
may request the commission to review projects or programs.
Subd. 8. The legislature may, by rule, provide to the
legislative auditor the testimonial powers that are conferred by
law on legislative standing commissions or committees.
Subd. 9. The legislative auditor is subject to the
Government Data Practices Act, chapter 13, and shall protect
from unlawful disclosure data classified as not public. If data
provided by the legislative auditor to the commission is
disseminated by the commission or its members or agents in
violation of section 13.05, subdivision 4, the commission is
subject to liability under section 13.08, subdivisions 1 and 3.
Subd. 10. Members of the commission have access to data
that is collected or used by the legislative auditor and
classified as not public or as private or confidential only as
authorized by resolution of the commission. The commission
shall may not authorize its members to have access to private or
confidential data on individuals collected or used in connection
with the collection of any tax.
Subd. 11. (a) "Audit" as used in this subdivision means a
financial audit, a review, program evaluation, a best practices
review, or an investigation. Data relating to an audit are not
public or with respect to data on individuals are confidential
until the final report of the audit has been published released
by the legislative auditor or the audit is no longer being
actively pursued. Upon release of a final audit report by the
legislative auditor, data relating to an audit are public except
data otherwise classified as not public.
(b) Data that support the conclusions of the related to an
audit but not published in the audit report and that the
legislative auditor reasonably believes will result be used in
litigation are not public and with respect to data on
individuals are confidential until the litigation has been
completed or is no longer being actively pursued.
(c) Data on individuals that could reasonably be used to
determine the identity of an individual supplying data for an
audit are private if the data supplied by the individual were
needed for an audit and the individual would not have provided
the data to the legislative auditor without an assurance that
the individual's identity would remain private, or the
legislative auditor reasonably believes that the subject would
not have provided the data.
(d) The definitions of terms provided in section 13.02
apply for purposes of this subdivision.
Subd. 11a. If, before releasing a report, the legislative
auditor provides a person with data relating to the audit for
the purpose of review and verification of the data, the person
must protect the data from unlawful disclosure or be subject to
the penalties and liabilities provided in sections 13.08 and
13.09.
Subd. 12. The commission shall periodically select topics
for the legislative auditor to evaluate. Topics may include any
agency, program, or activity established by law to achieve a
state purpose, or any topic that affects the operation of state
government, but the commission shall give primary consideration
to topics that are likely, upon examination, to produce
recommendations for cost savings, increased productivity, or the
elimination of duplication among public agencies. Legislators
and legislative committees may suggest topics for evaluation,
but the legislative auditor shall only conduct evaluations
approved by the commission.
Sec. 2. Minnesota Statutes 1998, section 3.971, is amended
to read:
3.971 [POWERS AND DUTIES OF LEGISLATIVE AUDITOR.]
Subdivision 1. To perform financial audits The legislative
auditor shall postaudit and make a complete examination and
verification of all accounts, records, inventories, vouchers,
receipts, funds, securities, and other assets of audit the
financial statements of the state of Minnesota required by
section 16A.50 and, as resources permit, shall audit Minnesota
state colleges and universities, the University of
Minnesota, all state agencies, departments, boards, commissions,
courts, and other state agencies at least once a year, if money
and personnel permit, and oftener if deemed necessary or as
directed by the legislature or the legislative audit
commission. Audits may include detailed checking of every
transaction or test checking as the legislative auditor deems
best. The books of the state treasurer and commissioner of
finance may be examined monthly. organizations subject to audit
by the legislative auditor, including the state agricultural
society, agricultural utilization research institute, Minnesota
Technology, Inc., Minnesota historical society, labor
interpretive center, Minnesota partnership for action against
tobacco, metropolitan sports facilities commission, metropolitan
airports commission, and metropolitan mosquito control
district. Financial audits must be conducted according to
generally accepted government auditing standards. The
legislative auditor shall see that all provisions of law
respecting the appropriate and economic use of public funds are
complied with by all and may, as part of a financial audit or
separately, investigate allegations of noncompliance by
employees of departments and agencies of the state
government and the other organizations listed in this
subdivision.
A copy of all postaudits, reports, and results of
examinations made by the legislative auditor shall be deposited
with the legislative reference library.
Subd. 2. To perform program evaluation, The legislative
auditor shall conduct program evaluations to determine the
degree to which the activities and programs entered into or
funded by the state are accomplishing their goals and
objectives, including a critical analysis of goals and
objectives, measurement of program results and effectiveness,
alternative means of achieving the same results, and efficiency
in the allocation of resources. The legislative auditor shall
recommend ways to improve the effectiveness of the programs,
reduce the cost of providing state services, and to eliminate
services of one agency that overlap with or duplicate the
services performed by another agency. At the direction of the
commission the legislative auditor may perform conduct program
evaluations of any state department, board, commission, or
agency and any metropolitan agency, board, or commission created
under chapter 473; or any program or activity established or
funded, in whole or in part, by the state. After an evaluation
report has been released, the legislative auditor may
periodically conduct a follow-up review to assess what changes
have occurred.
Subd. 4. (a) To perform best practices reviews, The
legislative auditor through the program evaluation division
shall conduct best practices reviews that examine the procedures
and practices used to deliver local government
services, including those of municipalities and counties,
determine the methods of local government service delivery,
identify variations in cost and effectiveness, and identify
practices to save money or provide more effective service
delivery. The legislative auditor shall recommend to local
governments service delivery methods and practices to improve
the cost-effectiveness of services. The legislative auditor and
the board of government innovation and cooperation shall notify
each other of projects being conducted relating to improving
local government services.
(b) The commission shall identify approve local government
services to be reviewed with advice from an advisory council
appointed by the legislative auditor and consisting of:
(1) three representatives from the Association of Minnesota
Counties;
(2) three representatives from the League of Minnesota
Cities;
(3) two representatives from the Association of
Metropolitan Municipalities;
(4) one representative from the Minnesota Association of
Townships; and
(5) one representative from the Minnesota Association of
School Administrators.
(c) This subdivision expires June 30, 1999.
Sec. 3. Minnesota Statutes 1998, section 3.974, is amended
to read:
3.974 [TO FILE WRITTEN REPORTS.]
For each audit done, evaluation, or other review completed,
the legislative auditor shall file provide a written report with
to the department, agency, society, or association
concerned, organization or individual audited, evaluated, or
reviewed; the legislative reference library; and the legislative
audit commission for its consideration and action.
Each audit report shall set forth:
(1) whether all funds have been expended for the purposes
authorized in their appropriation;
(2) whether all receipts have been accounted for and paid
into the state treasury as required by law;
(3) all illegal and unbusinesslike practices, if any;
(4) an assessment of the financial control practices used
in the agency, a measurement of performance, and recommendations
for improved effectiveness; and
(5) other data, information, and recommendations as the
legislative auditor may deem advisable and necessary.
Sec. 4. Minnesota Statutes 1998, section 3.975, is amended
to read:
3.975 [DUTIES WHEN VIOLATIONS MISUSE OF PUBLIC MONEY OR
OTHER RESOURCES ARE DISCOVERED.]
If a legislative auditor's examination discloses
malfeasance, misfeasance, or nonfeasance in office on the part
of an officer or employee, a copy of the report shall be signed
and verified, and it shall be the duty of misuse of public money
or other public resources, the legislative auditor to shall file
the a report with the legislative audit commission and, the
attorney general, and the appropriate county attorney. It shall
be the duty of The attorney general to institute and prosecute
civil proceedings against the delinquent officer or employee, or
upon the officer's or employee's official bond, or both, as
appropriate to secure to the state the shall seek recovery of
funds or money and other assets misappropriated resources as the
evidence may warrant. The attorney general county attorney
shall cause criminal proceedings to be instituted by the proper
authorities as the evidence may warrant.
Sec. 5. Minnesota Statutes 1998, section 6.74, is amended
to read:
6.74 [INFORMATION COLLECTED FROM LOCAL GOVERNMENTS.]
The state auditor, or a designated agent, shall collect
annually from all city, county, and other local units of
government, information as to the assessment of property,
collection of taxes, receipts from licenses and other sources,
the expenditure of public funds for all purposes, borrowing,
debts, principal and interest payments on debts, and such other
information as may be needful. The data shall be supplied upon
blanks prescribed by the state auditor, and all public officials
so called upon shall fill out properly and return promptly all
blanks so transmitted. The state auditor or assistants, may
examine local records in order to complete or verify the
information. Copies of all reports so received shall be
forwarded by the state auditor to the legislative auditor.
Sec. 6. Minnesota Statutes 1998, section 10.48, is amended
to read:
10.48 [EXPENSE REPORTS.]
The house of representatives and senate shall by rule
require detailed quarterly reports of expenditures by the house
of representatives and senate to their respective committees on
rules and legislative administration. Each constitutional
officer, the district courts, court of appeals, and supreme
court shall submit detailed quarterly reports of their
expenditures to the legislative auditor. These reports are
public information.
Sec. 7. Minnesota Statutes 1998, section 13.46,
subdivision 8, is amended to read:
Subd. 8. [ACCESS FOR AUDITING.] To the extent required by
state or federal law, representatives of federal, state, or
local agencies shall have access to data maintained by public or
private community mental health centers, mental health divisions
of counties, and other providers under contract to deliver
mental health services which is necessary to achieve the purpose
of auditing. Public or private community mental health centers,
mental health divisions of counties, and other providers under
contract to deliver mental health services shall not permit this
data to identify any particular patient or client by name or
contain any other unique personal identifier, except data
provided to the legislative auditor. Notwithstanding any
statute or rule to the contrary, and solely for the purposes of
conducting an audit approved by the legislative audit commission
in 1988, the legislative auditor shall be given access to all
data, records, and files classified as not public. The
legislative auditor shall maintain all data collected under this
subdivision in accordance with chapter 13 and may not disclose
data that identify a patient or client by name or that contain
any other personal identifier.
Sec. 8. Minnesota Statutes 1998, section 16A.27,
subdivision 2, is amended to read:
Subd. 2. [DAILY REPORT.] By 9:00 a.m. every business day,
a depository holding a total of over $100,000 in
non-interest-bearing state deposits shall report the balances as
of the close of the last business day to the treasurer and the
commissioner. The commissioner shall record the balances, and
send a copy of them to the legislative reference library, and
report them monthly to the legislative audit commission.
Sec. 9. Minnesota Statutes 1998, section 37.06, is amended
to read:
37.06 [SECRETARY; LEGISLATIVE AUDITOR; DUTIES; REPORT.]
The secretary shall keep a complete record of the
proceedings of the annual meetings of the state agricultural
society and all meetings of the board of managers and any
committee of the board, keep all accounts of the society other
than those kept by the treasurer of the society, and perform
other duties as directed by the board of managers. On or before
December 31 each year, the secretary shall report to the
governor for the fiscal year ending October 31 all the
proceedings of the society during the current year and its
financial condition as appears from its books. This report must
contain a full, detailed statement of all receipts and
expenditures during the year.
The books and accounts of the society for the fiscal year
must be examined and audited annually by the legislative
auditor. The cost of the examination must be paid by the
society to the state and credited to the legislative auditor's
revolving general fund.
A summary of this examination, certified by the legislative
auditor, must be appended to the secretary's report, along with
the legislative auditor's recommendations and the proceedings of
the first annual meeting of the society held following the
secretary's report, including addresses made at the meeting as
directed by the board of managers. The summary,
recommendations, and proceedings must be printed in the same
manner as the reports of state officers. Copies of the report
must be printed annually and distributed as follows: to each
society or association entitled to membership in the society, to
each newspaper in the state, and the remaining copies as
directed by the board of managers.
Sec. 10. Minnesota Statutes 1998, section 37.07, is
amended to read:
37.07 [MONTHLY STATEMENTS BY SECRETARY; PURCHASES,
EXPENDITURES.]
The secretary of the state agricultural society shall
prepare a signed statement each month summarizing receipts and
expenditures for the preceding month, which must be approved by
the president or a vice-president of the board of managers. The
secretary's affidavit must be attached to this statement. The
affidavit must state:
(1) that all articles were purchased by or under the
secretary's direction, and that to the secretary's best
information and belief, all articles purchased by the board of
managers were purchased at a fair cash market value and received
by the society, and that all services charged for were actually
provided;
(2) that neither the secretary nor any person in the
secretary's behalf, or the board of managers, to the secretary's
best information and belief, had any pecuniary or other interest
in any purchase made or services rendered, or received any
pecuniary or other benefit from the purchases or services,
directly or indirectly, by commission, percentage, deduction, or
otherwise; and
(3) that the articles specified conformed in every respect
to the goods ordered, in both quality and quantity.
The report must also show the amount of money in the hands
of the treasurer of the society.
Copies of the secretary's monthly report must be furnished
to the commissioner of finance and the office of the legislative
auditor and to each member of the board of managers no later
than the tenth of the month following the month's activities
reported.
The board of managers shall designate one or more national
or state banks, or trust companies authorized to do a banking
business, as official depositories for the society's money, and
shall then require the treasurer to deposit all or part of that
money in the designated bank or banks. The designation must be
in writing and must set forth all the terms and conditions upon
which the deposits are made, and it must be signed by the
president and secretary and made a part of the minutes of the
board. Any bank or trust company designated must qualify as a
depository by furnishing a corporate surety bond or collateral
as required by section 118A.03, and must, as long as any of the
society's money is on deposit with it, maintain the bond or
collateral in the amounts required by that section. No bond or
collateral is required to secure any deposit if it is insured
under federal law, as provided in section 118A.03.
Sec. 11. Minnesota Statutes 1998, section 85A.02,
subdivision 5c, is amended to read:
Subd. 5c. [FINANCIAL REPORT.] The board shall employ a
certified public accountant to audit and examine its financial
records each year. The board shall submit to the legislative
auditor a report of the accountant's examination or audit. The
legislative auditor shall review the report and accept it or may
make additional examinations if these would be in the public
interest. The working papers of the certified public accountant
relating to the board must be made available to the legislative
auditor on request.
Sec. 12. Minnesota Statutes 1998, section 89.05, is
amended to read:
89.05 [ACCOUNTING SYSTEM.]
The department of natural resources shall consolidate and
simplify the accounting system within the department for
receipts from department managed lands, disbursements made on a
regular basis, and the program for federal aids and grant
reimbursements. The new accounting system shall be implemented
with the cooperation and under the supervision of the department
of finance, utilizing the assistance and recommendations of the
office of the legislative auditor.
Sec. 13. Minnesota Statutes 1998, section 161.08, is
amended to read:
161.08 [BOOKS OF ACCOUNT.]
The commissioner shall keep accurate and complete books of
account of such character as may be prescribed by the
legislative auditor commissioner of finance, the same to show in
detail itemized receipts and disbursements of the trunk highway
fund. The books of account shall show the following facts,
among others:
(1) The expenses of maintaining the transportation
department, including the salaries and expenses of the
individual members thereof;
(2) The amounts of money expended in each county of the
state for the construction of trunk highways, and when, where,
and upon what job or portion of road expended so that the cost
per mile of such construction can be easily ascertained;
(3) Any other money expended by the state in connection
with any roads other than trunk highways and when, where, and
upon what portion of road so expended; and
(4) The amount of road equipment and materials purchased,
and when, where, and from whom purchased, and the price paid for
each item. The original invoices shall form a part of the
permanent files and records in the department of transportation
and be open to public inspection.
Sec. 14. Minnesota Statutes 1998, section 192.551, is
amended to read:
192.551 [ARMY REGULATIONS TO APPLY.]
All money and property received from any source for the
military forces shall must be kept, disbursed, and accounted for
as prescribed by army regulations, where applicable, otherwise
as prescribed by state rules. All such accounts shall must be
examined and audited at least once annually by officers of the
military forces detailed by the adjutant general as military
auditors. The legislative auditor may appoint any military
auditor as an assistant examiner, with all the powers incident
thereto, in connection with the examination of such accounts.
The provisions of the state Civil Service Act shall not be
applicable to such appointments also audit those activities of
the accounts that are subject to state law or rule.
Sec. 15. Minnesota Statutes 1998, section 352.03,
subdivision 6, is amended to read:
Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The
management of the system is vested in the director, who is the
executive and administrative head of the system. The director
shall be advisor to the board on matters pertaining to the
system and shall also act as the secretary of the board. The
director shall:
(1) attend meetings of the board;
(2) prepare and recommend to the board appropriate rules to
carry out this chapter;
(3) establish and maintain an adequate system of records
and accounts following recognized accounting principles and
controls;
(4) designate an assistant director with the approval of
the board;
(5) appoint any employees, both permanent and temporary,
that are necessary to carry out the provisions of this chapter;
(6) organize the work of the system as the director deems
necessary to fulfill the functions of the system, and define the
duties of its employees and delegate to them any powers or
duties, subject to the control of the director and under
conditions the director may prescribe. Appointments to exercise
delegated power must be by written order and shall be filed with
the secretary of state;
(7) with the advice and consent of the board, contract for
the services of an approved actuary, professional management
services, and any other consulting services as necessary and fix
the compensation for those services. The contracts are not
subject to competitive bidding under chapter 16C. Any approved
actuary retained by the executive director shall function as the
actuarial advisor of the board and the executive director, and
may perform actuarial valuations and experience studies to
supplement those performed by the actuary retained by the
legislative commission on pensions and retirement. Any
supplemental actuarial valuations or experience studies shall be
filed with the executive director of the legislative commission
on pensions and retirement. Professional management services
may not be contracted for more often than once in six years.
Copies of professional management survey reports must be
transmitted to the secretary of the senate, the chief clerk of
the house of representatives, and the legislative reference
library as provided by section 3.195, and to the executive
director of the commission and to the legislative auditor at the
time as reports are furnished to the board. Only management
firms experienced in conducting management surveys of federal,
state, or local public retirement systems are qualified to
contract with the director;
(8) with the advice and consent of the board provide
in-service training for the employees of the system;
(9) make refunds of accumulated contributions to former
state employees and to the designated beneficiary, surviving
spouse, legal representative, or next of kin of deceased state
employees or deceased former state employees, as provided in
this chapter;
(10) determine the amount of the annuities and disability
benefits of employees covered by the system and authorize
payment of the annuities and benefits beginning as of the dates
on which the annuities and benefits begin to accrue, in
accordance with the provisions of this chapter;
(11) pay annuities, refunds, survivor benefits, salaries,
and necessary operating expenses of the system;
(12) certify funds available for investment to the state
board of investment;
(13) with the advice and approval of the board request the
state board of investment to sell securities when the director
determines that funds are needed for the system;
(14) prepare and submit to the board and the legislature an
annual financial report covering the operation of the system, as
required by section 356.20;
(15) prepare and submit biennial and annual budgets to the
board and with the approval of the board submit the budgets to
the department of finance; and
(16) with the approval of the board, perform other duties
required to administer the retirement and other provisions of
this chapter and to do its business.
Sec. 16. Minnesota Statutes 1998, section 353.03,
subdivision 3a, is amended to read:
Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The
board shall appoint, with the advice and consent of the senate,
an executive director on the basis of education, experience in
the retirement field, and leadership ability. The executive
director shall have had at least five years' experience in an
executive level management position, which has included
responsibility for pensions, deferred compensation, or employee
benefits. The executive director serves at the pleasure of the
board. The salary of the executive director is as provided by
section 15A.0815.
(b) [DUTIES.] The management of the association is vested
in the executive director who shall be the executive and
administrative head of the association. The executive director
shall act as adviser to the board on all matters pertaining to
the association and shall also act as the secretary of the
board. The executive director shall:
(1) attend all meetings of the board;
(2) prepare and recommend to the board appropriate rules to
carry out the provisions of this chapter;
(3) establish and maintain an adequate system of records
and accounts following recognized accounting principles and
controls;
(4) designate, with the approval of the board, up to two
persons who shall serve in the unclassified service and whose
salary is set in accordance with section 43A.18, subdivision 3,
appoint a confidential secretary in the unclassified service,
and appoint employees to carry out this chapter, who are subject
to chapters 43A and 179A in the same manner as are executive
branch employees;
(5) organize the work of the association as the director
deems necessary to fulfill the functions of the association, and
define the duties of its employees and delegate to them any
powers or duties, subject to the control of, and under such
conditions as, the executive director may prescribe;
(6) with the approval of the board, contract for the
services of an approved actuary, professional management
services, and any other consulting services as necessary to
fulfill the purposes of this chapter. All contracts are subject
to chapter 16C. The commissioner of administration shall not
approve, and the association shall not enter into, any contract
to provide lobbying services or legislative advocacy of any
kind. Any approved actuary retained by the executive director
shall function as the actuarial advisor of the board and the
executive director and may perform actuarial valuations and
experience studies to supplement those performed by the actuary
retained by the legislative commission on pensions and
retirement. Any supplemental actuarial valuations or experience
studies shall be filed with the executive director of the
legislative commission on pensions and retirement. Copies of
professional management survey reports shall be transmitted to
the secretary of the senate, the chief clerk of the house of
representatives, and the legislative reference library as
provided by section 3.195, and to the executive director of the
commission and to the legislative auditor at the same time as
reports are furnished to the board. Only management firms
experienced in conducting management surveys of federal, state,
or local public retirement systems shall be qualified to
contract with the director hereunder;
(7) with the approval of the board provide in-service
training for the employees of the association;
(8) make refunds of accumulated contributions to former
members and to the designated beneficiary, surviving spouse,
legal representative or next of kin of deceased members or
deceased former members, as provided in this chapter;
(9) determine the amount of the annuities and disability
benefits of members covered by the association and authorize
payment of the annuities and benefits beginning as of the dates
on which the annuities and benefits begin to accrue, in
accordance with the provisions of this chapter;
(10) pay annuities, refunds, survivor benefits, salaries,
and necessary operating expenses of the association;
(11) prepare and submit to the board and the legislature an
annual financial report covering the operation of the
association, as required by section 356.20;
(12) prepare and submit biennial and annual budgets to the
board for its approval and submit the approved budgets to the
department of finance for approval by the commissioner;
(13) reduce all or part of the accrued interest payable
under section 353.27, subdivisions 12, 12a, and 12b, or 353.28,
subdivision 5, upon receipt of proof by the association of an
unreasonable processing delay or other extenuating circumstances
of the employing unit. The executive director shall prescribe
and submit for approval by the board the conditions under which
such interest may be reduced; and
(14) with the approval of the board, perform such other
duties as may be required for the administration of the
association and the other provisions of this chapter and for the
transaction of its business.
Sec. 17. Minnesota Statutes 1998, section 353A.05,
subdivision 1, is amended to read:
Subdivision 1. [COMMISSION ACTIONS.] Upon initiation of
consolidation as provided in section 353A.04, the executive
director of the commission shall direct the actuary retained by
the commission to undertake the preparation of the actuarial
calculations necessary to complete the consolidation.
These actuarial calculations shall include for each active
member, each deferred former member, each retired member, and
each current beneficiary the computation of the present value of
future benefits, the future normal costs, if any, and the
actuarial accrued liability on the basis of the existing relief
association benefit plan and on the basis of the public
employees police and fire fund benefit plan. These actuarial
calculations shall also include for the total active, deferred,
retired, and benefit recipient membership the sum of the present
value of future benefits, the future normal costs, if any, and
the actuarial accrued liability on the basis of the existing
relief association benefit plan, on the basis of the public
employees police and fire fund benefit plan, and on the basis of
the benefit plan which produced the largest present value of
future benefits for each person. The actuarial calculations
shall be prepared using the entry age actuarial cost method for
all components of the benefit plan and using the actuarial
assumptions applicable to the fund for the most recent actuarial
valuation prepared under section 356.215, except that the
actuarial calculations on the basis of the existing relief
association benefit plan shall be prepared using an interest
rate actuarial assumption during the postretirement period which
is in the same amount as the interest rate actuarial assumption
applicable to the preretirement period. The actuarial
calculations shall include the computation of the present value
of the initial postretirement adjustment anticipated by the
executive director of the state board as payable after the
effective date of the consolidation from the Minnesota
postretirement investment fund under section 11A.18.
The chief administrative officer of the relief association
shall, upon request, provide in a timely manner to the executive
director of the commission and to the actuary retained by the
commission the most current available information or documents,
whichever applies, regarding the demographics of the active,
deferred, retired, and benefit recipient membership of the
relief association, the financial condition of the relief
association, and the existing benefit plan of the relief
association.
Upon completion of the actuarial calculations required by
this subdivision, the actuary retained by the commission shall
issue a report in the form of an appropriate summary of the
actuarial calculations and shall provide a copy of that report
to the executive director of the commission, the executive
director of the public employees retirement association, the
chief administrative officer of the relief association, the
chief administrative officer of the municipality in which the
relief association is located, and the state auditor, and the
legislative auditor.
Sec. 18. Minnesota Statutes 1998, section 354.06,
subdivision 2a, is amended to read:
Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management
of the association is vested in the executive director who shall
be the executive and administrative head of the association.
The executive director shall act as advisor to the board on all
matters pertaining to the association and shall also act as the
secretary of the board. The executive director shall:
(1) attend all meetings of the board;
(2) prepare and recommend to the board appropriate rules to
carry out the provisions of this chapter;
(3) establish and maintain an adequate system of records
and accounts following recognized accounting principles and
controls;
(4) designate an assistant executive director in the
unclassified service and two assistant executive directors in
the classified service with the approval of the board, and
appoint such employees, both permanent and temporary, as are
necessary to carry out the provisions of this chapter;
(5) organize the work of the association as the director
deems necessary to fulfill the functions of the association, and
define the duties of its employees and delegate to them any
powers or duties, subject to the director's control and under
such conditions as the director may prescribe;
(6) with the approval of the board, contract and set the
compensation for the services of an approved actuary,
professional management services, and any other consulting
services. These contracts are not subject to the competitive
bidding procedure prescribed by chapter 16C. An approved
actuary retained by the executive director shall function as the
actuarial advisor of the board and the executive director and
may perform actuarial valuations and experience studies to
supplement those performed by the actuary retained by the
legislative commission on pensions and retirement. Any
supplemental actuarial valuations or experience studies shall be
filed with the executive director of the legislative commission
on pensions and retirement. Copies of professional management
survey reports must be transmitted to the secretary of the
senate, the chief clerk of the house of representatives, and the
legislative reference library as provided by section 3.195, and
to the executive director of the commission and to the
legislative auditor at the same time as reports are furnished to
the board. Only management firms experienced in conducting
management surveys of federal, state, or local public retirement
systems are qualified to contract with the executive director;
(7) with the approval of the board, provide in-service
training for the employees of the association;
(8) make refunds of accumulated contributions to former
members and to the designated beneficiary, surviving spouse,
legal representative, or next of kin of deceased members or
deceased former members, under this chapter;
(9) determine the amount of the annuities and disability
benefits of members covered by the association and authorize
payment of the annuities and benefits beginning as of the dates
on which the annuities and benefits begin to accrue, under this
chapter;
(10) pay annuities, refunds, survivor benefits, salaries,
and necessary operating expenses of the association;
(11) prepare and submit to the board and the legislature an
annual financial report covering the operation of the
association, as required by section 356.20;
(12) certify funds available for investment to the state
board of investment;
(13) with the advice and approval of the board, request the
state board of investment to sell securities on determining that
funds are needed for the purposes of the association;
(14) prepare and submit biennial and annual budgets to the
board and with the approval of the board submit those budgets to
the department of finance; and
(15) with the approval of the board, perform such other
duties as may be required for the administration of the
association and the other provisions of this chapter and for the
transaction of its business. The executive director may:
(i) reduce all or part of the accrued interest and fines
payable by an employing unit for reporting requirements under
section 354.52, based on an evaluation of any extenuating
circumstances of the employing unit;
(ii) assign association employees to conduct field audits
of an employing unit to ensure compliance with the provisions of
this chapter; and
(iii) recover overpayments, if not repaid to the
association, by suspending or reducing the payment of a
retirement annuity, refund, disability benefit, survivor
benefit, or optional annuity under this chapter until the
overpayment, plus interest, has been recovered.
Sec. 19. Minnesota Statutes 1998, section 360.015,
subdivision 19, is amended to read:
Subd. 19. [KEEP BOOKS AND RECORDS.] The commissioner shall
keep accurate and complete books of account of such character as
may be prescribed by the legislative auditor, the same accounts
to show in detail itemized receipts and disbursements of the
airports fund. The books shall show, and it shall be the duty
of the legislative auditor to so prescribe, the following facts,
among others:
(a) The expenses of maintaining the department, including
the salaries and expenses of the individual members thereof;
(b) The amounts of money expended in each county of the
state for the construction or maintenance of airports or
restricted landing areas, when, where, and upon what airport or
restricted landing area expended, so that the cost for each such
airport or restricted landing area can be easily ascertained;
(c) The amount of equipment and materials purchased and
when, where, and from whom purchased; these books shall show the
price paid for each item; the original invoice shall form a part
of the permanent files and records in the department and shall
be open to public inspection.
Sec. 20. Minnesota Statutes 1998, section 574.20, is
amended to read:
574.20 [BONDS, BY WHOM APPROVED.]
Except as otherwise provided by law in particular cases,
bonds shall be approved as follows:
(1) The official bonds of all state officers, including
those of the treasurers, superintendents, and other officials,
and employees of the several public educational, charitable,
penal, and reformatory institutions belonging to the state,
shall be approved, as to form, by the attorney general, and in
all other respects by the governor and the legislative auditor,
or one of them;
(2) The official bonds of county, town, city, and school
district officers and employees by the governing body of the
political subdivision for whose security they are, respectively,
given; and
(3) Those required or permitted by law to be given in any
court, by the judge or justice of the court in which the
proceeding is begun or pending.
No officer, official, or employee required to give bond
shall enter upon duties until the bond is duly approved and
filed.
Sec. 21. Minnesota Statutes 1998, section 609.456, is
amended to read:
609.456 [REPORTING TO STATE AUDITOR AND LEGISLATIVE AUDITOR
REQUIRED.]
Subdivision 1. [STATE AUDITOR.] Whenever a public employee
or public officer of a political subdivision discovers evidence
of theft, embezzlement, or unlawful use of public funds or
property, the employee or elected official shall, except when to
do so would knowingly impede or otherwise interfere with an
ongoing criminal investigation, promptly report in writing to
the state auditor a detailed description of the alleged incident
or incidents.
Subd. 2. [LEGISLATIVE AUDITOR.] Whenever an employee or
officer of the state, University of Minnesota, or other
organization listed in section 3.971, subdivision 1, discovers
evidence of theft, embezzlement, or unlawful use of public funds
or property, the employee or officer shall, except when to do so
would knowingly impede or otherwise interfere with an ongoing
criminal investigation, promptly report in writing to the
legislative auditor a detailed description of the alleged
incident or incidents.
Sec. 22. Laws 1990, chapter 535, section 5, is amended to
read:
Sec. 5. [ACCOUNTS; AUDITS.]
The corporation may establish funds and accounts that it
finds convenient. The board shall provide for and pay the cost
of an independent annual audit of its official books and records
by the legislative state auditor subject to Minnesota Statutes,
sections 3.971 and 3.972. A copy of this audit shall be filed
with the secretary of state.
Sec. 23. [REVISOR INSTRUCTION.]
The revisor of statutes shall renumber each section of
Minnesota Statutes listed in column A with the number listed in
column B. The revisor shall make necessary cross-reference
changes consistent with the renumbering. The revisor shall
provide appropriate section and subdivision headnotes in
Minnesota Statutes, sections 3.97, 3.971, and 3.979.
Column A Column B
3.97, subd. 4 3.971, subd. 1
3.97, subd. 5 3.971, subd. 2
3.97, subd. 6 3.971, subd. 3a
3.97, subd. 7 3.971, subd. 4
3.97, subd. 8 3.971, subd. 5
3.97, subd. 9 3.979, subd. 1
3.97, subd. 10 3.979, subd. 2
3.97, subd. 11 3.979, subd. 3
3.97, subd. 11a 3.979, subd. 4
3.97, subd. 12 3.97, subd. 3a
3.971, subd. 1 3.971, subd. 6
3.971, subd. 2 3.971, subd. 7
3.971, subd. 4 3.971, subd. 8
Sec. 24. [REPEALER.]
Minnesota Statutes 1998, sections 3.973; 116.072,
subdivision 12; 469.207, subdivision 1; and 574.02, are repealed.
Sec. 25. [EFFECTIVE DATE.]
The amendments made to Minnesota Statutes 1998, section
3.97, subdivision 2, in section 1, are effective January 1,
2001. The remainder of the act is effective the day following
final enactment.
Presented to the governor April 22, 1999
Signed by the governor April 26, 1999, 1:12 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes