Yet another shortcoming of financial control has been found in Minnesota’s state government.

In a report released this week, the Office of the Legislative Auditor found that three state departments and Minnesota Management and Budget made mistakes in payments they made to employees to compensate them retroactively for raises they were due under a new labor contract.

As a result, many of the employees received inadequate compensation that took more than six months to recover, according to the OLA. In 30% of the cases that were found to be in error, the mistakes were not corrected. The OLA also found some employees were overpaid.

The report, now the third one within the past month uncovering financial management inadequacies in the state government, highlights limitations in the state’s payroll system, poor communication among state agencies, and an inability of those agencies to make payments to employees accurately and in a timely fashion.

The departments that were audited include the state Departments of Corrections, Commerce, Natural Resources and Public Safety, and the audit focused on payments made between July 1, 2021, and June 7, 2022, following a labor agreement between those agencies and the Minnesota Law Enforcement Association.

According to the report, the overall conclusions of the audit were:

Minnesota Management and Budget did not have adequate internal controls over the parameters it established for the payroll system’s retroactive pay adjustment calculations.
The Department of Commerce complied with the legal requirements related to the retroactive pay adjustments that the OLA tested and had adequate internal controls to ensure compliance with those legal requirements.
The Departments of Corrections, Natural Resources, and Public Safety did not comply with the legal requirements related to the retroactive pay adjustments the OLA tested. Those departments also did not have adequate internal controls to ensure compliance with the legal requirements.

The OLA audit found those agencies either miscalculated or failed to resolve incorrect payments for 983 Minnesota Law Enforcement Association members of those agencies. This includes approving retroactive payments that the Department of Public Safety and the Department of Natural Resources knew were inaccurate for 234 employees.

The inaccurate payment totals for each agency range from $258 at the Department of Corrections to $28,911 at the Department of Public Safety.

While the payment totals are minuscule compared to payroll totals at each agency, the report comes on the heels of two OLA audits released earlier this year detailing mismanaged state agencies, including $250 million in fraud due to a lack of oversight by the Minnesota Department of Education regarding a food program and $205 million in unverified payments to people through a Frontline Worker Pay bonuses program in 2023.

When performing its audits, the OLA usually finds that an agency can improve a process, according to Deputy Legislative Auditor Lori Leysen. She said she could not think of a report her office released in the past few years that didn’t have at least one issue, though the severity levels have differed.

“Our job is to really show where there are areas for improvement and to try to help the government find ways to make those improvements,” Leysen said.

In its report, the OLA recommended agencies adhere to legal requirements, fix inaccurate payments when known and strengthen internal controls.

Also included in the report are responses from four of the five audited agencies that agreed with the OLA’s report and said they would follow the recommendations.

A response from the Department of Commerce, which was found in compliance, was not included in the report.

The report will also be presented to the Legislative Audit Commission on Thursday, July 25, at 10 a.m. and livestreamed on YouTube.

OLA Retroactive Payments Report by Mark Wasson on Scribd

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Michelle Rageth and Jill Hughes looked across a St. Paul Park warehouse Thursday afternoon, pointing out the various amenities of Friends in Need Food Shelf.

It calls to mind a grocery co-op more than a traditional food shelf. They pointed out the large grocery area. The walk-in freezer. The dry goods storage area and the dairy refrigerator section. The pair got to the square, generously-sized welcome desk in the lobby and paused.

“We were once trying to sort our groceries in a room that was smaller than that desk,” said Rageth, who retired as Friends in Need executive director at the beginning of 2024, completing a 25-year run with the nonprofit.

On Thursday, Friends In Need employees and volunteers received a donation of $98,750 from Marathon Oil’s St. Paul Park Refining Company, capping off more than $1 million in donations made by the refinery to the food shelf since 2015. Thursday’s payment fulfilled the mortgage on the property and 12,000-square foot facility.

“It’s just unbelievable,” said Hughes, current executive director of the food shelf. She started with Friends in Need as assistant director seven years ago. “We would not be here without the refinery.”

The current Friends in Need space opened in 2016 and serves 225 to 250 families a week, which has increased some 40 percent since last year, according to food shelf officials. Every Tuesday morning, a semitrailer full of food arrives with new inventory.

Due to its large space, Friends in Need can operate with a “choice” model, where clients can come into the food shelf, grab a cart and pick out what items they need, similar to how they would shop at a supermarket. The shelf labels foods by color code, as well, removing a potential language barrier for their clients.

Friends in Need counts two paid employees — executive director Hughes and assistant director Crystal Schneider — but otherwise operates through the help of 175 volunteers who put in 300 hours a week.

Many volunteers come from the refinery, and get to know the clients, Hughes said, creating a relaxed atmosphere. That helps remove any stigma inside the food shelf’s doors.

“It’s like a family here, and that makes a hard situation for people a little bit better,” Hughes said.

Increased demand

The “choice” option is generally the preferred model among hunger relief organizations, Second Harvest Heartland Director of Community Partnerships Angelica Klebsch said.

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Second Harvest Heartland, in partnership with more than 1,000 food shelves and donation programs, provided almost 128 million meals to neighbors in Minnesota and western Wisconsin last year.

The choice model offers clients a friendly space with dignity, she said.

As Friends in Need has witnessed greater needs this year, food insecurity rates continue to rise statewide, as well. Second Harvest Heartland has distributed 15 percent more food in each of the past three years.

According to Hunger Solutions Minnesota, a food equity nonprofit, Minnesotans made more than 7.5 million visits to food shelves in 2023, more than 2 million more visits than in 2022. It was a record high for the third consecutive year.

Their own space

Many food shelf operators are located within the space of another organization such as another nonprofit or a church, Klebsch said.

Such was the situation for Friends in Need back in 2015. They were operating out of a former VFW location that badly needed repair.

“Our needs kept growing, but the building kept getting older,” Rageth said. “It was so old, the city of St. Paul Park did not even know when it was built.”

Stakeholders from Friends in Need and volunteers linked to the St. Paul Park Refining Company began researching possible solutions. They thought about trying to once again renovate the property, but that proved unrealistic, said Jason Akey, a Marathon Oil technologist, who helped the search for a more permanent space. Akey also previously served as a Friends In Need board member.

Pictured (from left) at the grocery portion of the Friends in Need food shelf in St. Paul Park food shelf are: Crystal Schneider, Friends in Need assistant director; Jill Hughes, Friends in Need executive director; Jason Akey, Marathon Petroleum technologist and former Friends in Need board member; Holly Jackson, Marathon Oil St. Paul Park refinery plant general manager; and Michelle Rageth, retired Friends in Need executive director. Thursday’s donation capped off nine years of work to secure a new location for Friends in Need, which fulfilled the mortgage on the property and 12,000-square foot facility. (Elliot Mann / Pioneer Press)

“If you had ever seen the old VFW they were operating out of, it was atrocious,” Akey recalled.

They toured other sites where the food shelf might be able to rent space, but they kept coming up empty. Eventually, Akey said, the group decided to approach the refinery leadership with a different option.

St. Paul Park Refining Company would sell a plot of land for $1 and provide money to build the new facility. The food shelf now sits in the shadow of the refinery and across the street from the old food shelf location, which has since been reduced to a parking lot.

The refinery itself has changed hands several times since 2015, with Marathon Oil reacquiring it in 2018. But continuing the relationship and honoring the previous commitment between the refinery and the food shelf was important, said Holly Jackson, Marathon Oil St. Paul Park refinery plant general manager.

For Rageth, the refinery community members have always had a hand in ensuring the food shelf kept its doors open.

“This is the nicest food shelf I’ve ever been to,” Rageth said. “We never dreamed that we would be able to give this type of experience to our community.”

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The Louisville Bats earned a second consecutive narrow escape over the St. Paul Saints on Thursday in Louisville, Ky., getting a 3-2 win when DaShawn Keirsey Jr. hit into a game-ending double play with the tying run on third base.

On Wednesday night, Michael Trautwein hit a walk-off two-run homer in the bottom of the ninth of Louisville’s 6-5 victory, capping the Bats’ comeback from a 4-0 deficit after six innings. The Bats won the first game of the five-game series 8-1 on Tuesday.

Thursday’s game was a pitching duel until some late-game drama. Justus Sheffield, a first-round pick by Cleveland in 2014 who made 33 major league starts between 2019-2022 for the Mariners, no-hit the Saints for the first five innings, striking out two and walking two.

Casey Legumina came in for Sheffield in the sixth, and Yunier Severino ended the no-hitter with a one-out triple and came home on a sacrifice fly by Keirsey.

Saints starter Louie Varland nearly matched Sheffield. Varland pitched 5 2/3 scoreless innings, allowing two hits with six strikeouts and three walks.

Ryan Jensen got the final out of the sixth inning but gave up a two-run double to Erik Gonzalez in the seventh.

In the ninth, the Bats scored an insurance run they would end up needing off Jeff Brigham when P.J. HIggins’ two-out single scored Levi Jordan from second base.

In the ninth, Anthony Prato and Edouard Julien drew walks against Bats reliever Tony Santillan. Wynton Bernard, signed by the Twins as a minor league free agent on Wednesday, singled for his first hit with the Saints, driving in Prato.

Severino followed with a lineout to right field that moved Julien to third.

Keirsey then hit a grounder to shortstop Livan Soto, who completed the double play to end the threat.

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