REGIONAL — A new report released Tuesday by the Office of the Legislative Auditor says the Office of the Governor and Lieutenant Governor continues to struggle with basic financial oversight, echoing concerns first raised in an audit two years ago.
The OLA reviewed financial controls and administrative processes related to payroll, purchasing cards, travel expenses, and property management. The OLA previously identified several of the same issues in a 2022 report and directed corrective action, but the problems persist.
Unresolved patterns
In 2022, auditors flagged the governor’s office for errors in leave documentation and weak oversight of purchasing cards. The 2025 review found that similar administrative control gaps continued, with several items still listed as partially resolved or unresolved. Auditors noted issues again this year with missing documentation for paid parental leave, uncollected overpayments to former employees, and unclear rules for when purchasing-card users must renew their agreements.
Beyond the repeat issues, auditors also identified problems in how the office manages funds.
Money management lapses
Much of the review focused on how the office collects, records, and spends money.
Auditors said the office failed to properly manage receipts from events at the governor’s residence and other sources, leaving more than $12,000 uncollected until the errors were pointed out during the audit. The office also entered deposits incorrectly in the state’s accounting system and lacked documentation showing that some donations and reimbursements were ever deposited.
In other areas, auditors found numerous inaccurate or unsupported payments. The office duplicated payments for two state airplane flights, paid some vendors late, and made both over and under payments to employees.
In all, the audit cited dozens of transactions with missing receipts, unsigned travel approvals, or absent documentation showing that goods or services were actually received. Auditors said such gaps make it impossible to verify the accuracy of state spending.
Splitting the limit
One finding stood out for being a deliberate circumvention of procedures rather than a paperwork mistake. Auditors said staff split purchasing-card payments into multiple transactions to avoid established spending limits. Those limits are intended to ensure that larger purchases receive supervisory approval.
The report recommended closer oversight and requiring explicit approval before any split payments occur.
Lax paperwork
The audit also revealed a steady pattern of late payments. Nearly half of the invoices tested for recurring expenses were paid after their due date, including some more than 300 days late. State policy requires vendors be paid within 30 days. The delays resulted in late fees and lost rebates for prompt payment.
Inventory management was another weak spot. Auditors found that the governor’s office had not maintained an updated list of its equipment and sensitive items and that one staff member was responsible for both purchasing and tracking inventory, a conflict that increases the risk of undetected loss.
Taken together, the late payments and inventory gaps point to ongoing challenges with day-to-day administrative oversight.
Why it matters
Minnesota law requires all state agencies to maintain internal controls that safeguard public funds and ensure accurate financial reporting. The governor’s office is subject to the same standards as other agencies and undergoes periodic audits to verify compliance.
The governor’s office disputed the significance of the findings. In a statement reported by CBS Minnesota, officials said many of the issues identified in the audit had already been corrected and that “nearly all of the recommended changes have now been made – nearly half of which were resolved before the audit began.”
Minnesota Republicans were quick to respond after the audit was released Tuesday. The GOP has repeatedly pointed to documented cases of fraud in state programs as evidence of weak oversight under Gov. Walz, including the Feeding Our Future prosecutions and the recent suspension of a housing assistance program, and Senate Republican Leader Mark Johnson tried to link these findings to broader issues of fraud.
“When the Governor’s own office can’t follow basic financial controls—overpaying employees, losing state property, and stiffing vendors for months—it’s no wonder massive fraud is exploding across state government,” Johnson said. “Sloppy accountability at the top breeds waste and abuse everywhere else. It’s tempting to dismiss the small dollar amounts, but if Gov. Walz can’t run his own office with integrity, he clearly can’t hold agencies accountable for the billions of dollars they manage.”
The audit reflects practices in place through December 2024, the end of the review period.