Minnesota Office of the Legislative Auditor
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Legislative Audit Commission Meeting


March 2, 2006

Members Present:

Representative Lyndon Carlson    Senator David Hann
Representative Sondra Erickson Senator Sheila Kiscaden
Representative Rick Hansen Senator Warren Limmer
Representative Ruth Johnson Senator James Metzen
Representative Aaron Peterson Senator Ann Rest

Members Absent:

Representative Connie Ruth Senator Richard Cohen
Representative Torrey Westrom    Senator Thomas Neuville
Representative Tim Wilkin Senator Claire Robling

The Legislative Audit Commission meeting was called to order by Senator Ann Rest, Chair, at 10:10 a.m. in Room 107 of the State Capitol. The purpose of the meeting was to release and review the program evaluation report, Tax Compliance.

Senator Rest acknowledged there was no quorum present, and introduced Jim Nobles, Legislative Auditor. Mr. Nobles gave an overview of the scope of the evaluation and then introduced Deb Junod, Project Manager. At 10:21 a.m., Senator Rest recognized that a quorum was achieved.

Ms. Junod explained the extent and nature of tax compliance problems in Minnesota. Ms. Junod then reviewed the findings and recommendations in the report and answered questions from members. In response to a question about turnover among Department of Revenue auditors, Mr. Nobles said that OLA and other state entities are having trouble competing with salaries of the private sector. He noted this is largely due to the Sarbanes-Oxley Act, which is requiring more audit work; therefore, the private sector is looking for more talent in the audit field.

Senator Rest thanked Mr. Nobles and Ms. Junod. She then introduced Daniel Salomone, Commissioner, Department of Revenue, and Dennis Erno, Deputy Commissioner. Mr. Salomone thanked the commission for the report, saying that it was valid and insightful. Mr. Salomone stated that Revenue is 1) working on its data warehouses to improve its ability to identify returns for audit; 2) looking at ways to improve its telephone assistance system; and 3) working on streamlining its collections process. The commissioner added that the department has recently received approval from DOER and MAPE to give tax auditors more frequent pay increases, which the department hopes will reduce turnover. In response to a question from Senator Rest, Mr. Salomone called upon Carole Wald, Assistant Commissioner, to explain why Minnesota does not participate in the IRS’ Fed-State electronic filing program. Ms. Wald explained that participating in Fed-State would require some technology changes at the department and would likely slow state tax refunds by one to two days. She added that the department’s electronic filing system already does a good job detecting possible noncompliance as returns are filed.

Senator Rest thanked Mr. Salomone, Mr. Erno, Ms. Wald, Mr. Nobles, and Ms. Junod. She noted the topic was very interesting and that it was a fine report.

With no further business, the meeting was adjourned at 11:39 a.m.


Senator Ann H. Rest, Chair

Shelly Watterud, Recording Secretary



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