Rebecca Otto, in her official capacity as State Auditor of the State of Minnesota, Appellant/Cross-Respondent,
Wright County, et al., Respondents/Cross-Appellants, Ramsey County, Respondent.
of Appeals Office of Appellate Courts
T. Dixon, Joseph J. Cassioppi, Pari I. McGarraugh, Fredrikson
& Byron, P.A., Minneapolis, Minnesota, for
T. Anderson, John P. Edison, Elizabeth J. Vieira, Rupp,
Anderson, Squires & Waldspurger, P.A., Minneapolis,
Minnesota, for respondents/cross-appellants Wright County and
J. Choi, Ramsey County Attorney, Robert Roche, John T. Kelly,
Assistant County Attorneys, Saint Paul, Minnesota, for
respondent Ramsey County.
William Z. Pentelovitch, Michael C. McCarthy, Melissa Muro
LaMere, Maslon LLP, Minneapolis, Minnesota; and Teresa J.
Nelson, John B. Gordon, American Civil Liberties Union of
Minnesota Foundation, Saint Paul, Minnesota, for amici curiae
American Civil Liberties Union of Minnesota, et al.
G. Kaardal, Mohrman, Kaardal & Erickson, P.A.,
Minneapolis, Minnesota, for amicus curiae Association for
Kenneth H. Bayliss, Quinlivan & Hughes, P.A., Saint
Cloud, Minnesota, for amicus curiae Association of Minnesota
W. Hansen, Apollo Law LLC, Minneapolis, Minnesota; and
Jenifer Schaye, General Counsel, Louisiana Legislative
Auditor, Baton Rouge, Louisiana, for amicus curiae Daryl G.
Purpera, Louisiana Legislative Auditor.
Because the State Auditor retains significant duties and
responsibilities in connection with audits of Minnesota
counties, Minnesota Statutes § 6.481 (2016) does not
violate the Separation of Powers Clause, Minn. Const. art.
III, § 1.
Because the duties of the State Auditor are germane to the
operation of state government, the Legislature did not
violate the Single Subject Clause, Minn. Const. art. IV,
§ 17, in enacting Minnesota Statutes § 6.481.
GILDEA, CHIEF JUSTICE.
2015, a new statute was enacted that governs the State
Auditor's responsibilities over audits of Minnesota
counties. The new statute allows counties to "choose to
have the [required] audit" performed by either a
Certified Public Accounting (CPA) firm or the State Auditor.
Minn. Stat. § 6.481, subd. 2 (2016). The State Auditor
contends that the new statute violates the Separation of
Powers Clause, Minn. Const. art. III, § 1, and the
Single Subject Clause, Minn. Const. art. IV, § 17. The
district court held that the legislative modification of the
State Auditor's duties is constitutional, and the court
of appeals affirmed. Because we conclude that the legislative
amendments to the State Auditor's county-audit
responsibilities do not violate either constitutional
provision, we affirm.
Otto is the eighteenth State Auditor of Minnesota, an
executive department office that Article V of the Minnesota
Constitution established. Minn. Const. art. V, § 1. With
the exception of the Governor, Article V does not expressly
detail the duties of the constitutional executive officers.
The duties of the State Auditor are instead "prescribed
by law." Minn. Const. art. V, § 4 ("The duties
. . . of the executive officers shall be prescribed by
State Auditor "superintend[s] and manage[s] the fiscal
concerns of the state, " Minn. Stat. § 6.01 (2016).
Since Minnesota's territorial days, this responsibility
has encompassed some oversight of county finances. See,
e.g., Minn. Rev. Stat. (Terr.) ch. 4, art. I, § 6
(1851) (requiring the Territorial Auditor to "keep an
account" with the counties in the territory that
"correspond[ed] with the . . . territorial tax . . . to
be levied in such counties"). When Minnesota came into
the Union in 1858, the State Auditor's duties included
the responsibility for "fair and accurate records of all
. . . public accounts." Minn. Gen. Stat. ch. 5, §
1878, the Public Examiner, an executive department office
originally unrelated to the State Auditor, was responsible
for examining and verifying county finances. Minn. Gen. Stat.
ch. 6, § 91 (1878). After state statutes restructured
the Public Examiner's duties in 1973, the State Auditor
assumed the responsibility to "visit . . . each county
and make a thorough examination" of the county's
records relating "to the receipt and disbursement"
of public funds.
addition to duties and responsibilities concerning county
finances, the State Auditor's responsibility for managing
the "fiscal concerns of the State" includes audits
of cities and other governmental entities; prescribing
accounting and budgeting systems for all political
subdivisions; examining the books of contractors, municipal
hospitals, and county nursing homes, as needed; and other
miscellaneous duties. Minn. Stat. §§ 6.01-.91
at least 2003, the statute that requires an audit of county
finances has allowed a private certified public accountant to
examine county accounts and records. See Minn. Stat.
§ 6.48 (2004) (stating that the State Auditor may
require additional information when "the audit is
performed by a private certified public
accountant"). If an audit is performed by a private CPA
firm, the State Auditor may "require additional
information from the private certified public accountant,
" "accept the audit, " or "make
additional examinations" as the state auditor deems to
be in the public interest. Id.
undisputed facts show, every 3 years the State Auditor
identifies which counties will be audited by the State
Auditor's office, and which counties must hire a private
CPA firm for their annual audit. For example, during the
State Auditor's last cycle of audits before the 2015
legislation at issue here, the State Auditor audited 59
counties and directed 28 counties to retain private CPA
firms. In all cases in which the State Auditor directed a
county to use a private CPA firm, she had the authority to
determine whether to require additional information from the
firm, accept the firm's audit, or make her own
examination. See Minn. Stat. § 6.48 (2014).
2015, the Minnesota Legislature passed, and Governor Dayton
signed into law, S.F. No. 888, the State Government Finance
Omnibus Bill. Act of May 23, 2015, ch. 77, 2015 Minn. Laws
1373. Article 2 of this bill included several provisions
"relating to the operation of state government, "
id. at 1373, 1389. As it relates to the State
Auditor, the 2015 legislation repealed Minn. Stat. §
6.48 (2014), and in its place, codified a new statute,
section 6.481. Act of May 23, 2015, ch. 77, art. 2,
§§ 3, 88, 2015 Minn. Laws 1373, 1390-91, 1432. The
2015 legislation made two amendments that are relevant to the
claims at issue here. First, the new statute altered the
permissive annual county audit, imposing instead a required
annual county audit. Compare Minn. Stat. § 6.48
(2014) ("At least once in each year . . . the state
auditor may visit . . . each county and make a
thorough examination of all accounts and records . . .
." (emphasis added)), with Minn. Stat. §
6.481, subd. 2 (2016) ("A county must have an
annual financial audit." (emphasis added)). Second, the
legislation specifically allows counties to decide
who will conduct the required audit: either a private CPA
firm or the State Auditor. Minn. Stat. § 6.481, subd. 2
("A county may choose to have the [required annual]
audit performed by the state auditor, or may choose to have
the audit performed by a CPA firm . . . ."). Section
6.481 became effective on August 1, 2016. Act of May 23,
2015, ch. 77, art. 2, § 3, 2015 Minn. Laws 1373, 1391.
the enactment of section 6.481, the State Auditor notified 61
counties that her office would conduct the audits for the
next 3-year cycle. With the notices, the State Auditor also
included proposed 3-year contracts for the State
Auditor's auditing services. Fifty counties, including
Wright, Becker, and Ramsey Counties, refused to sign the
contracts. Wright and Becker Counties notified the State
Auditor that they intended to use a private CPA firm for the