7/28/2019 Dibble & Hornstein letter to Commissioner Zelle about DBE Audit May 2013

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Minnesota Senate

Minnesota House

of Representatives

State Capitol75 Rev. Dr. Martin Luther King Jr. BlvdSt. Paul, MN 55155

Senator D. Scott Dibble

651-296-4191sen.scott.dibble@senate.mn

Representative Frank Hornste651-296-9281rep.frank.hornstein@house.mn

May 28, 2013

Commissioner Charles A. ZelleMinnesota Department of Transportation395 John Ireland BlvdSt. Paul, MN 55155

Dear Commissioner Zelle:

We are writing to share our very serious concerns about the recently completed audit of theMnDOT Office of Civil Rights and the Disadvantaged Business Enterprise (DBE) Program itmanages. We were given a copy of the audit from MnDOT last week, on the last day of ourlegislative session, a full week following its finalization. Since that time we have met with theLegislative Auditor to discuss what steps may be needed to further investigate and address thefundamental failures outlined in the findings of the report.

As we know you agree, efforts to ensure appropriate and adequate opportunities for all members

of our community to participate in delivering important public services, ensuring a level playingfield and eliminating bias, are very important priorities. It is absolutely crucial that this initiative,which holds significant power in essential financial decisions, be unassailable and beyondreproach. It is in everyones interest for this office and its programs to succeed.

The audit found that the Office of Civil Rights Director lowered project goals withoutany justification. We would like to know how the goals are set by the office, whatoversight MnDOTs administration provides of the DBE goal setting, and how often

these procedures are reviewed with DBE management and staff.

The review concluded that DBE participation rates were unsubstantiated for 2010, 2011,

and 2012, even though the Office of Civil Rights claimed that DBE goals were met.Additionally, a request for data for 2012 was never provided for the audit. We requestupdated and complete information about DBE participation rates for those three years. Ifthe information does not exist, please explain why.

Monitoring and enforcement was found to be severely lacking which resulted inpotentially millions of dollars going to non-DBE contractors or contractors who were nolonger eligible to participate in the program. Another finding showed that work never

7/28/2019 Dibble & Hornstein letter to Commissioner Zelle about DBE Audit May 2013

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performed was still credited. The audit reported $1.9 million was credited to a non-DBEsubcontractor without any documentation, and $1.6 million was funneled through theDBE for materials by a non-DBE supplier. At the same time, the audit said ineligibleDBE companies were included in a list of eligible participants. Please provide us withinformation about what steps the Office of Civil Rights is taking to review and enforceDBE guidelines and how MnDOT administration plans to review the offices monitoringof eligible participants.

We are deeply troubled by findings that confidential documents with non-public, privatedata in them were unprotected. Has any damage been done to the subject of that data as aresult? How is the Office going to protect confidential data in the future?

A finding by staff of failure to meet good faith efforts on a major project was overruledby the Director with no supporting rationale. Compounding the issue, the Directorbackdated and changed the memo that overruled this finding in the process of providingdocumentation for a lawsuit currently in litigation. Please provide us with detailedinformation about what steps have been made to ensure that this decision and decisionslike this are not arbitrary. Please report to us how data that supports decision making, ifany exists, will be developed, retained and secured.

The Office conducted a study, with the assistance of the University of Minnesota, todevelop guidance on DBE goals and methodologies which it did not actually adopt.Please tell us why the Office chose to set different goals and why the Office has notestablished more rigorous and uniform criteria for both goal setting and compliancemonitoring.

Finally, it is our understanding that the Office of Civil Rights Director has beenreassigned to another office in MnDOT. We request information on what role she nowhas in your agency, what oversight she has of staff, agency functions, funds, who willsupervise her, and how the agency plans to monitor her performance.

We have highlighted some of the findings that are of particular concern. We would appreciateyour reaction to everything contained in the report. Also, if the wrongdoing has been determinedto rise to a level beyond nonfeasance, that will be very important for us to know. Thank you inadvance for your timely and thorough response to these questions. We look forward to hearingfrom you about what actions you are taking to bring integrity back to the Office of Civil Rightsand the DBE Program.

Sincerely,

D. Scott Dibble, Chair Frank Hornstein, ChairSenate Transportation & Public Safety Committee House Transportation Finance CommitteeState Senator, District 61 State Representative, District 61A

cc: Jim Nobles, Legislative Auditor