Retroactive Pay Adjustments for

Law Enforcement Employees at the

Departments of Commerce, Corrections,
Natural Resources, and Public Safety
Performance Audit

July 2024

Financial Audit Division

Office of the Legislative Auditor
State of Minnesota
Financial Audit Division
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objective of these financial audits is to assess
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 Judy Randall, Legislative Auditor
State of Minnesota

July 10, 2024

Members
Legislative Audit Commission

Erin Campbell, Commissioner

Minnesota Management and Budget

Grace Arnold, Commissioner

Department of Commerce

Paul Schnell, Commissioner

Department of Corrections

Sarah Strommen, Commissioner

Department of Natural Resources

Bob Jacobson, Commissioner

Department of Public Safety

This report presents the results of our performance audit of law enforcement employees’
retroactive pay adjustments for Fiscal Year 2022. The objectives of this audit were to determine
if state agencies had adequate internal controls over selected financial activities and complied with
significant finance-related legal requirements.

Minnesota Management and Budget and the departments of Corrections, Natural Resources,
and Public Safety agreed with all findings, as stated in their responses at the end of the report.
The Department of Commerce did not have findings and, therefore, did not provide a response.

This audit was conducted by Heather Rodriguez (Audit Director); auditors Ria Bawek, Sheena Kurth,
and Lisa Makinen; former auditor Zach Kempen, CPA; and former intern John Paul Rossini.

We received the full cooperation of all five agencies while performing this audit.

Sincerely,

Judy Randall Lori Leysen, CPA

Legislative Auditor Deputy Legislative Auditor

Room 140 Centennial Building, 658 Cedar Street, St. Paul, MN 55155-1603 • Phone: 651-296-4708 • Fax: 651-296-4712
E-mail: legislative.auditor@state.mn.us • Website: www.auditor.leg.state.mn.us • Minnesota Relay: 1-800-627-3529 or 711
Table of Contents
Page
Report Summary ...............................................................................................................1
Conclusions ...................................................................................................................1
Findings and Recommendations ...................................................................................1
Background .......................................................................................................................5
Retroactive Pay Adjustment Overview .........................................................................5
Audit Scope, Objectives, Methodology, and Criteria ...................................................5
Minnesota Management and Budget’s Mass Retroactive Pay Adjustment Process .........9
Departmental Review of Mass Retroactive Payments ....................................................13
Department of Commerce ...........................................................................................14
Department of Corrections ..........................................................................................14
Department of Natural Resources ...............................................................................15
Department of Public Safety .......................................................................................17
Minnesota Management and Budget Response ..............................................................21
Department of Corrections Response .............................................................................25
Department of Natural Resources Response ...................................................................27
Department of Public Safety Response...........................................................................31
Performance Audit 1

Report Summary
In June 2022, Minnesota Management and Budget implemented provisions from the
Minnesota Law Enforcement Association (MLEA) labor agreement that increased
compensation rates. Some state agencies with employees represented by MLEA did not
have the expertise, knowledge, and resources to accurately calculate the resulting
retroactive payments. As a result, many MLEA members received inaccurate
compensation that took more than six months to recover, which negatively impacted the
confidence members have in the retroactive pay adjustment process.

Conclusions
Our audit found that state agencies had not resolved the inaccurate retroactive payments
for 30 percent of employees we tested.

This report highlights some significant areas of concern around the retroactive pay
adjustment process, including limitations in the state’s payroll system, poor
communication among state agencies, and the inability of agencies to process accurate
and timely payments to employees.

Our overall conclusions for the audit are as follows:

• 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 we 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
we tested. They also did not have adequate internal controls to ensure
compliance with those legal requirements.

The list of findings below and the full report provide more information about these
concerns.

Findings and Recommendations

Finding 1. Minnesota Management and Budget processed retroactive pay adjustments
with incorrect date parameters for Minnesota Law Enforcement Association members.
(p. 11)

Recommendations

• Minnesota Management and Budget should use the correct date parameters when
processing retroactive pay adjustments.
2 Retroactive Pay Adjustments for Law Enforcement Employees

• Minnesota Management and Budget should strengthen internal controls by ensuring

an experienced employee reviews the process parameters in the state’s payroll
system before it initiates retroactive pay adjustments.

Finding 2. The Department of Corrections issued incorrect retroactive payments to two

Minnesota Law Enforcement Association members. (p. 14)

Recommendations

• The Department of Corrections should resolve inaccurate retroactive payment errors

for each employee identified.

• The Department of Corrections should strengthen internal controls to ensure the

accuracy of retroactive payments.

Finding 3. The Department of Natural Resources approved system-calculated

retroactive payments it knew were incorrect for 161 Minnesota Law Enforcement
Association members before it conducted the required review of the calculations.

The Department of Natural Resources also calculated and issued incorrect retroactive
payments for three additional Minnesota Law Enforcement Association members.
(p. 15)

Recommendations

• The Department of Natural Resources should only approve system-calculated

retroactive payments if it has reviewed the calculations for accuracy.

• The Department of Natural Resources should strengthen internal controls to ensure

the accuracy of retroactive payments.

• The Department of Natural Resources should obtain guidance from Minnesota

Management and Budget on the mass retroactive pay adjustment process, when
needed.

Finding 4. The Department of Natural Resources did not resolve incorrect retroactive
payments to 20 Minnesota Law Enforcement Association members. (p. 17)

Recommendations

• The Department of Natural Resources should resolve inaccurate retroactive

payment errors for each employee identified.

• The Department of Natural Resources should strengthen internal controls to ensure

the accuracy of retroactive payments.
Performance Audit 3

Finding 5. The Department of Public Safety approved system-calculated retroactive

payments it knew were incorrect for 73 Minnesota Law Enforcement Association
members before it conducted the required review of the calculations.

The Department of Public Safety issued estimated retroactive payments to 513

Minnesota Law Enforcement Association members before verifying the amounts.

The Department of Public Safety calculated and issued incorrect retroactive payments
for 24 additional Minnesota Law Enforcement Association members. (p. 18)

Recommendations

• The Department of Public Safety should only approve system-calculated retroactive

payments if it has reviewed the calculations for accuracy.

• The Department of Public Safety should not process estimated retroactive

payments.

• The Department of Public Safety should strengthen internal controls to ensure the
accuracy of retroactive payments.

• The Department of Public Safety should obtain guidance from Minnesota

Management and Budget on the mass retroactive pay adjustment process,
when needed.

Finding 6. The Department of Public Safety did not resolve incorrect retroactive
payments to 187 Minnesota Law Enforcement Association members. (p. 19)

Recommendations

• The Department of Public Safety should resolve inaccurate retroactive payment

errors for each employee identified.

• The Department of Public Safety should strengthen internal controls to ensure the
accuracy of retroactive payments.
Performance Audit 5

Background
Retroactive Pay Adjustment Overview
Minnesota Management and Budget (MMB) manages payroll and human resource
transactions for the executive branch by providing policies, procedures, systems, and
support statewide. In addition, MMB processes some statewide payroll and human
resource transactions in the state’s payroll system, such as mass retroactive pay
adjustments. When labor agreements are settled, MMB processes the necessary
compensation rate changes and initiates the payroll system’s calculation of retroactive
payments when the effective date is in a prior pay period.

State agencies are responsible for reviewing, modifying, and approving the payroll
system’s calculation of retroactive pay adjustments before MMB issues payments to
employees.

Audit Scope, Objectives, Methodology, and Criteria

We conducted this audit to determine whether MMB and the departments of Commerce,
Corrections, Natural Resources, and Public Safety had adequate internal controls and
complied with significant finance-related legal requirements. The audit scope included
retroactive pay adjustments resulting from the settlement of the 2021-2023 Minnesota
Law Enforcement Association (MLEA) labor agreement. The payments related to the
period of July 1, 2021, through June 7, 2022.

We designed our work to address the following questions:

• Did state agencies have adequate internal controls to ensure they issued accurate
retroactive pay adjustments, in compliance with applicable legal provisions?

• Did state agencies accurately issue retroactive pay adjustments, in compliance

with applicable legal provisions?

To gain an understanding of related internal controls and compliance requirements,

we interviewed staff and reviewed documentation at MMB and the departments of
Commerce, Corrections, Natural Resources, and Public Safety.

MMB issued the initial retroactive payments for all departments on the same date—
July 1, 2022—which we could identify in the state’s payroll system. However, we
could not identify subsequent payments and recoveries issued by the departments to
remedy errors because they were not issued on the same date. As a result, we had to
review the support for all retroactive activity paid after July 1, 2022, to determine if it
was related to the initial retroactive payments and, therefore, should be included in
our population.
6 Retroactive Pay Adjustments for Law Enforcement Employees

We tested the entire population of retroactive payments for MLEA members at the
departments of Commerce, Corrections, and Natural Resources, and a random sample at
the Department of Public Safety. Accordingly, we could not determine the extent of
retroactive pay adjustments for the employees we did not test.

Exhibit 1 shows the initial payments, as well as subsequent payments and recoveries,
made to the employees included in our testing. It also includes an example of the
multiple payments and recoveries some MLEA members experienced to resolve the
inaccurate retroactive payments they initially received. We discuss the extent of
inaccurate retroactive payments throughout this report.

Exhibit 1
Retroactive Pay Adjustment Activity Tested, for the Period of July 1, 2021,
through June 7, 2022
Number of Net Net
Employees Subsequent Subsequent
Department Tested Initial Payments Payments Recoveries Net Total
Commerce 14 $ 32,529 $ – $ – $ 32,529
Corrections 10 18,776 – – 18,776
Natural Resources 164 1,060,897 1,414 (689,353) 372,958
Public Safety 499 1,194,040 210,880 (216,760) 1,188,160
Total 687 $2,306,242 $212,294 $(906,113) $1,612,423

Notes: We determined net subsequent payments and recoveries by adding together all of the retroactive pay
adjustments for each employee. If overall, the state owed additional money to the employee, we recorded the
net adjustments in the “Net Subsequent Payments” column. If overall, the employee had to return money to the
state, we recorded the net adjustments in the “Net Subsequent Recoveries” column. We provide an example in
the table below.

Example of Retroactive Pay Adjustment Activity for a Minnesota Law Enforcement

Association Member
Amount
Paid or
2022 Check Dates Recovered
July 1 $2,001 This amount is reported in the “Initial Payments” column above.
September 23 (67)
October 7 (67)
October 21 (67)
Subsequent payments and recoveries net to ($416), so we
November 4 (67)
reported this activity in the “Net Subsequent Recoveries”
November 18 (567)
column above.
December 2 433
December 16 (67)
December 30 53
Total $1,585

Notes: Minnesota Law Enforcement Association members that received overpayments entered into payment
plans that dictated the amount the state deducted from their paychecks each pay period. The Department of
Natural Resources gave its employees the option to pay back overpayments it initially identified through
June 30, 2023, and the Department of Public Safety gave its employees through December 30, 2022.

Source: Office of the Legislative Auditor, based on data in the state’s payroll system.
Performance Audit 7

We conducted this performance audit in accordance with generally accepted

government auditing standards.1 Those standards require that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on our
audit objectives. When sampling was used, we used a sampling method that complies
with generally accepted government auditing standards and that supports our findings
and conclusions. That method does not, however, allow us to project the results we
obtained to the populations from which the samples were selected.

We assessed internal controls against the most recent edition of the internal control
standards, published by the U.S. Government Accountability Office.2 To identify legal
compliance criteria for the activity we reviewed, we examined state laws, state labor
agreements, and policies and procedures established by MMB.

1
Comptroller General of the United States, Government Accountability Office, Government Auditing
Standards, 2018 Revision (Washington, DC, Technical Update April 2021).
2
Comptroller General of the United States, Government Accountability Office, Standards for Internal
Control in the Federal Government (Washington, DC, September 2014). In September 2014, the State of
Minnesota adopted these standards as its internal control framework for the executive branch.
Performance Audit 9

Minnesota Management and

Budget’s Mass Retroactive Pay
Adjustment Process
The Minnesota Law Enforcement Association (MLEA) is an employee bargaining
unit that represents law enforcement employees at the departments of Commerce,
Corrections, Natural Resources, and Public Safety. Minnesota Management and
Budget (MMB) and MLEA completed negotiations and agreed to the terms of the
2021-2023 MLEA labor agreement on May 2, 2022. The labor agreement’s terms
included a 2.5 percent increase to compensation rates in the first year, retroactive to
July 1, 2021. It also included a range reassignment, which moved all MLEA job
classes to higher salary ranges effective May 25, 2022.3 This range reassignment
increased most compensation rates by an additional 1.7 to 4.3 percent.

On June 10, 2022, MMB processed the necessary compensation rate increases and
initiated the payroll system’s calculation of retroactive payments to MLEA members,
which covered payroll activity from July 1, 2021, through June 7, 2022. While the
system calculated the retroactive payments, it flagged those employees who had certain
activity in their human resources or payroll data that would likely cause the payroll
system’s calculation to be inaccurate.4 It also flagged employees whose system-
calculated payments exceeded the maximum threshold established by MMB.5
MMB requires state agencies to review the calculations of flagged employees for
accuracy. The state’s payroll system automatically approves all other retroactive
payments, although MMB encourages state agencies to review a sample of these
calculations to ensure they are reasonable.6

The state’s payroll system flagged the majority of the retroactive payments for state
agency review because MLEA members also received a lump-sum payment on
November 19, 2021. The lump-sum payment was in response to legislatively mandated

3
Minnesota Management and Budget, Agreement between the Minnesota Law Enforcement Association
and the State of Minnesota, Dates: July 1, 2021 through June 30, 2023, art. 28, sec. 1C, and apps. D-2
and E-2. We verified that MMB accurately implemented the range reassignment, effective May 25, 2022,
by moving all MLEA members to the correct compensation rates.
4
The payroll system flags retroactive payments for employees that temporarily worked in a different
position, had a lump-sum payment, or received a type of compensation that has payout limitations.
5
MMB calculates a maximum threshold for each mass retroactive pay adjustment by multiplying the
highest compensation rate by the percentage increase and then multiplying the result by the total number
of hours in the retroactive period. The system flags the retroactive payments that exceed the maximum
threshold because there is an increased risk that the payment is inaccurate.
6
Minnesota Management and Budget, Mass Retroactive Pay Adjustments – Reference, https://help.hcm
.systems.state.mn.us/htmldoc/eng/webhelp2020/index.htm#t=Mass_Retroactive_Pay_Adjustments.htm,
accessed January 26, 2023.
10 Retroactive Pay Adjustments for Law Enforcement Employees

increases and the settlement of the 2019-2021 labor agreement, which covered payroll
activity from July 1, 2019, through October 26, 2021.7

As a result of limitations in the state’s payroll system, the system calculated the
retroactive payments for the 2021-2023 labor agreement using the compensation rates
originally paid to employees during normal payroll processing covering July 1, 2021,
through June 7, 2022, without factoring in the previous lump-sum payment they already
received.8 As depicted in Exhibit 2, this caused the system-calculated payments to be
overstated for the overlapping period of July 1, 2021, through October 26, 2021.

Exhibit 2
Minnesota Law Enforcement Association Mass Retroactive Pay Adjustments,
July 2019 through June 2022
7/1/2021-6/7/2022
7/1/2019-10/26/2021 Second retroactive pay adjustment period
First retroactive pay adjustment period for the for the range reassignments and settlement
legislatively mandated increases and settlement of the 2021-2023 MLEA labor agreement
7/1/2021-10/26/2021
of the 2019-2021 MLEA labor agreement
Overlap of the retroactive
pay adjustment periods

Jul-Dec 2019 Jan-Dec 2020 Jan-Dec 2021 Jan-Jun 2022

Source: Office of the Legislative Auditor.

On June 10, 2022, MMB sent a memo to state agency payroll, human resources, and
accounting staff detailing the timeline for processing the retroactive pay adjustments for
MLEA members. MMB gave agencies five days, between June 13 and June 17, 2022,
to complete the review of flagged employees. The five-day review period allowed the
system to calculate proposed payments, state agencies to review the system
calculations, and MMB to process employee payments within the same pay period.

By completing all of these activities within the five-day timeline, the state would avoid
the need to calculate and process additional retroactive payments for subsequent pay
periods. Additionally, this allowed MMB to implement a 2.5 percent compensation rate
increase from the 2021-2023 MLEA labor agreement, which was effective July 1, 2022

7
Laws of Minnesota 2021, First Special Session, chapter 4, art. 9, sec. 1, as amended by Laws of Minnesota
2021, First Special Session, chapter 11, art. 8, sec. 3; Laws of Minnesota 2021, First Special Session,
chapter 5, art. 3, sec. 1, as amended by Laws of Minnesota 2021, First Special Session, chapter 11, art. 8,
sec. 8; Laws of Minnesota 2021, First Special Session, chapter 11, art. 8, sec. 13; and chapter 6, art. 4, sec. 1;
and Minnesota Management and Budget, Agreement between the Minnesota Law Enforcement Association
and the State of Minnesota, Dates: July 1, 2019 through June 30, 2021, art. 28, secs. 1C and 1D.
8
For example, an employee received an original compensation rate of $42.68 from July 1, 2021, through
October 26, 2021. The state paid the employee a lump-sum payment to retroactively increase their
compensation rate during that period to $45.65, on November 19, 2021 (to implement the legislatively
mandated increases and the 2019-2021 labor agreement increases). When MMB settled the 2021-2023
labor agreement, the employee was eligible for a lump-sum payment to retroactively increase their
compensation rate (during that same period) to $46.80. When the payroll system calculated the associated
retroactive payment, it used $46.80 minus $42.68 instead of $46.80 minus $45.65.
Performance Audit 11

(the following pay period). The memo did not highlight the fact that the system-
calculated payments had not factored in the previous lump-sum payments or that more
employees than typical had been flagged for agency review.

MMB showed us how it establishes the retroactive pay adjustment parameters in the
state’s payroll system, processes the compensation rate increases, and initiates the
system-calculation of the retroactive payments. We evaluated the safeguards MMB had
in place to ensure the processes were complete and accurate, as required by internal
control standards.9

FINDING 1

Minnesota Management and Budget processed retroactive pay

adjustments with incorrect date parameters for Minnesota Law
Enforcement Association members.

When MMB established the date parameters for the retroactive pay adjustment in the
state’s payroll system, it incorrectly duplicated the pay period ending June 7, 2022, which
overstated the system-calculated retroactive payments. The employee responsible for
reviewing the data for accuracy prior to MMB processing the adjustments was
unavailable, so a less-experienced employee performed the task. MMB told us that it
identified the error on June 13, 2022, but could not fix it without also backing out all of
the related salary changes.

Instead of backing out the error, MMB flagged for agency review the retroactive pay
adjustments that were previously unflagged. MMB sent a memo to state agencies on
June 14, 2022, notifying them that they would need to remove the duplicated pay period
from their calculations to prevent overpayments. State agencies had three days left in
the five-day review period to make this adjustment. According to MMB, it contacted
affected state agencies by phone and e-mail to verify that they had received the memo.

RECOMMENDATIONS

• Minnesota Management and Budget should use the correct date

parameters when processing retroactive pay adjustments.

• Minnesota Management and Budget should strengthen internal

controls by ensuring an experienced employee reviews the process
parameters in the state’s payroll system before it initiates retroactive
pay adjustments.

This combination of circumstances led to fewer than typical retroactive payments being
system-approved and an increase in manual calculations for the departments of
Commerce, Corrections, Natural Resources, and Public Safety.

9
Comptroller General of the United States, Government Accountability Office, Standards for Internal
Control in the Federal Government (Washington, DC, September 2014), 45-48.
Performance Audit 13

Departmental Review of
Mass Retroactive Payments
Retroactive pay adjustments must comply with the increases allowed by labor
agreements. As previously discussed, the 2021-2023 Minnesota Law Enforcement
Association (MLEA) agreement gave members two compensation rate increases that
were effective in prior pay periods.10

Minnesota Management and Budget (MMB) has issued guidance for state agencies to
ensure compliance with the terms of labor agreements when calculating, processing,
and reviewing mass retroactive pay adjustments. This guidance requires that state
agencies recalculate retroactive payments for all flagged employees and suggests that
they also review a sample of (nonflagged) system-approved retroactive payments.11
In addition, state agencies should implement internal controls, such as an independent
review of these calculations, to ensure the accuracy of those payments.12

Retroactive pay adjustments of this magnitude, which require complex and lengthy
manual calculations, are inherently risky and error-prone. When errors occur and state
agencies discover overpayments, MMB’s payroll policy and state law requires that state
agencies collect overpayments after obtaining the employee’s consent or following an
established notification process.13

The four agencies with MLEA members had different experiences implementing the
retroactive pay adjustments. The departments of Commerce and Corrections, which
had relatively small numbers of affected employees, were able to follow MMB’s
guidance and their typical processes to implement the adjustments. On the other hand,
the departments of Natural Resources and Public Safety, which had large numbers of
affected employees, struggled to follow MMB’s guidance and their typical processes.
The limited numbers of payroll staff those departments had, and the fact that the
retroactive pay adjustments occurred during the state’s normal biweekly payroll
processing week, contributed to the challenges.

10
Minnesota Management and Budget, Agreement between the Minnesota Law Enforcement Association
and the State of Minnesota, Dates: July 1, 2021 through June 30, 2023, art. 28, sec. 1C, and apps. D-2
and E-2.
11
Minnesota Management and Budget, Mass Retroactive Pay Adjustments – Reference, https://help.hcm
.systems.state.mn.us/htmldoc/eng/webhelp2020/index.htm#t=Mass_Retroactive_Pay_Adjustments.htm,
accessed January 26, 2023.
12
Comptroller General of the United States, Government Accountability Office, Standards for Internal
Control in the Federal Government (Washington, DC, September 2014), 45.
13
Minnesota Management and Budget, Statewide Operating Policy and Procedure PAY0033, Correction of
Overpayments, issued March 2017; and Minnesota Statutes 2023, 16D.16. State law requires that agencies
send a certified letter to employees that do not provide consent for the state to recover overpayments from
their paychecks. The letter informs the employee that the state intends to recover the overpayment from
future payments. Employees can request a contested case hearing within 30 days. If they do not, then the
state can automatically deduct the overpayment from payments the state owes to the employee, subject to
the limitations in law.
14 Retroactive Pay Adjustments for Law Enforcement Employees

Department of Commerce
The payroll system flagged for review the retroactive payments it calculated for all
14 MLEA members employed by the Department of Commerce.

An accounting officer performed preliminary calculations and determined that errors

existed in the system-calculated retroactive payments. The accounting officer then
recalculated the retroactive payments for each employee on individualized spreadsheets,
using information from the reports and the state’s payroll system. Management at the
department reviewed the calculations for accuracy, and payroll staff entered the corrections
they identified into the state’s payroll system within the five-day review period.

We recalculated the retroactive payments for all 14 MLEA members at the department
and determined they were accurate.

Department of Corrections
The payroll system flagged for review the retroactive payments it calculated for all ten
MLEA members employed by the Department of Corrections.

An accounting technician reviewed all system-calculated retroactive payments,

eliminated the duplicated pay period, and documented the final payment for each
employee on the retroactive pay adjustment reports. According to the department, the
accounting officer verified the accuracy of the adjusted calculation; however, they did
not retain evidence of the review. The accounting technician entered corrected amounts
into the state’s payroll system within the five-day review period.

FINDING 2

The Department of Corrections issued incorrect retroactive payments to

two Minnesota Law Enforcement Association members.

We recalculated the retroactive payment for all ten MLEA members and determined
that the department underpaid two employees by a total of $258. The first
underpayment occurred because the department excluded one pay period from the
payment. The second underpayment was due to a calculation error.

For each error, the department either did not document calculations in enough detail for
secondary reviewers to sufficiently evaluate the accuracy of the retroactive payments;
the secondary review was not sufficient to identify and correct the errors; or the
department did not review payroll reports in enough detail to identify missing
retroactive activity.14

14
MMB requires that state agencies review the Payroll Register and Payroll Posting Audit Trail reports
each pay period. These reports include retroactive payments processed for each employee. Minnesota
Management and Budget, Statewide Operating Policy and Procedure PAY0028, Agency Verification of
Payroll and Human Resources Transactions, issued August 2011.
Performance Audit 15

RECOMMENDATIONS

• The Department of Corrections should resolve inaccurate retroactive

payment errors for each employee identified.

• The Department of Corrections should strengthen internal controls to

ensure the accuracy of retroactive payments.

Department of Natural Resources

The payroll system flagged for review the retroactive payments it calculated for all
164 MLEA members employed by the Department of Natural Resources.

Upon its initial review, the department did not identify the extent of the errors in the
system-calculated retroactive payments. The department knew MMB had duplicated
one pay period in its calculation, but it had not considered that the prior lump-sum
payments related to the settlement of the 2019-2021 MLEA labor agreement and the
legislatively mandated increases would create errors in the system-calculated amounts.
Regardless, human resources told us that, with the number of flagged employees and
limited staff, it could not manually recalculate the payments for all flagged employees
within the five-day review period.

FINDING 3

The Department of Natural Resources approved system-calculated

retroactive payments it knew were incorrect for 161 Minnesota Law
Enforcement Association members before it conducted the required
review of the calculations.

The Department of Natural Resources also calculated and issued

incorrect retroactive payments for three additional Minnesota Law
Enforcement Association members.

Human resources staff at the department were not aware that they could leave flagged
employee transactions unapproved in the state’s payroll system if they needed
additional time to review and recalculate the payments. While MMB’s guidance states
that state agencies must complete the review of flagged employees by the Friday after
MMB initiates the retroactive pay adjustment process, this only applies if state agencies
want flagged employee payments to be loaded into the state’s payroll system for
automatic processing.15 Alternatively, state agencies needing additional time can
manually process retroactive payments for the flagged employees once they recalculate
and verify final payment amounts.

15
Minnesota Management and Budget, Mass Retroactive Pay Adjustments – Reference, https://help.hcm
.systems.state.mn.us/htmldoc/eng/webhelp2020/index.htm#t=Mass_Retroactive_Pay_Adjustments.htm,
accessed January 26, 2023.
16 Retroactive Pay Adjustments for Law Enforcement Employees

As a result of the department’s approach, the department issued incorrect retroactive

payments for all MLEA members it employed. We discuss the extent of the inaccurate
payments below.

RECOMMENDATIONS

• The Department of Natural Resources should only approve system-

calculated retroactive payments if it has reviewed the calculations for
accuracy.

• The Department of Natural Resources should strengthen internal

controls to ensure the accuracy of retroactive payments.

• The Department of Natural Resources should obtain guidance from

Minnesota Management and Budget on the mass retroactive pay
adjustment process, when needed.

Managers from the department’s Enforcement Division notified human resources in late
June 2022 that the department may have significantly overpaid retroactive adjustments
to MLEA members. Human resources did not conduct any follow-up in response to the
notification at that time.

In mid-July 2022, Enforcement Division managers again reached out to human resources
and provided additional information regarding MLEA overpayments; specifically, they
stated that the Department of Public Safety had identified that MLEA overpayments
extended beyond the pay period duplicated in MMB’s calculations. As a result, the
department’s human resources staff and two Enforcement Division accounting staff
began recalculating the retroactive payments the week of July 18, 2022. They reviewed
each check stub; entered the data into individualized spreadsheets; and obtained
compensation rate information, prior retroactive payments, and prior recoveries from the
state’s payroll system.

According to the department, the transaction supervisor verified the accuracy of a

sample of calculations completed by human resources, and human resources reviewed a
sample of calculations completed by the accounting staff; however, they did not retain
evidence of the review.

The department notified MLEA members of the additional overpayments on September 12,
2022, and provided each employee with a detailed spreadsheet of their retroactive pay
calculation. The department held a virtual meeting with affected employees on
September 30, 2022, to review the calculations and present repayment options.

The department processed $689,353 in employee repayments—ranging from $40 to

$8,896—for 155 employees; the average repayment was $4,447. The department also
processed $1,414 in additional payments ranging from $52 to $188 for nine employees;
the average payment was $157. The collection of repayments for many MLEA
members continued through June 30, 2023.
Performance Audit 17

We recalculated the retroactive payments for all 164 MLEA members at the department
and determined that the corrections the department made resolved 144 of the
164 inaccurate retroactive payments.

FINDING 4

The Department of Natural Resources did not resolve incorrect retroactive

payments to 20 Minnesota Law Enforcement Association members.

At the time of our testing, the department had not resolved the inaccurate retroactive
payments for 20 employees. It overpaid retroactive payments to 17 employees by a total
of $1,795 and underpaid 3 employees by a total of $133. The inaccurate payments
occurred because the department stopped some payroll recoveries before it collected the
entire overpayment it had correctly identified, and it processed a payroll recovery as a
payment. Additionally, the department’s calculation spreadsheets contained incorrect
overtime and compensation rates, as well as formula, data entry, and transposition errors.

For each error, the department either did not perform a secondary review of the
calculation; the secondary review was not sufficient to identify and correct the error; or
the department did not review payroll reports in enough detail to identify missing or
incorrect retroactive activity.

RECOMMENDATIONS

• The Department of Natural Resources should resolve inaccurate

retroactive payment errors for each employee identified.

• The Department of Natural Resources should strengthen internal

controls to ensure the accuracy of retroactive payments.

Department of Public Safety

The payroll system flagged for review the retroactive payments it calculated for
617 MLEA members employed by the Department of Public Safety. The department
also received retroactive payment requests from 16 separated employees.16

Payroll staff at the department realized that the number and amount of flagged system-
calculated retroactive payments were significantly higher than normal. However, there
was only one employee who was handling retroactive payments at the department,
and they could not manually recalculate the payments for all 617 employees within the
five-day review period as well as calculate the retroactive payments for the 16 separated
employees.

16
MMB’s guidance states that “employees who separated from state service during the adjustment period are
eligible for retroactive pay if they request it in writing.” MMB does not include separated employees in its
mass retroactive pay adjustments; state agencies are responsible for calculating and entering these payments
into the state’s payroll system. Minnesota Management and Budget, Mass Retroactive Pay Adjustments –
Reference, https://help.hcm.systems.state.mn.us/htmldoc/eng/webhelp2020/index.htm#t=Mass_Retroactive
_Pay_Adjustments.htm, accessed January 26, 2023.
18 Retroactive Pay Adjustments for Law Enforcement Employees

FINDING 5

The Department of Public Safety approved system-calculated retroactive

payments it knew were incorrect for 73 Minnesota Law Enforcement
Association members before it conducted the required review of the
calculations.

The Department of Public Safety issued estimated retroactive payments to

513 Minnesota Law Enforcement Association members before verifying
the amounts.

The Department of Public Safety calculated and issued incorrect

retroactive payments for 24 additional Minnesota Law Enforcement
Association members.

The payroll employee at the department told us that they did not know how to handle
the volume of retroactive payments in the condensed timeline, and they could not
consult with their supervisor because the supervisor was on leave. The payroll
employee made the decision to issue estimated payments, in amounts similar to prior
retroactive payments, in order to issue timely payments to those employees while
minimizing the impact of potential overpayments. During the process, the payroll
employee did not enter estimated or department-calculated payments for some
employees and, instead, approved the system-calculated payments.

As a result of the department’s approach, the department issued retroactive payments

it knew were incorrect for 586 of 633 MLEA members it employed. In addition, the
department incorrectly calculated and issued retroactive payments for 24 MLEA
members we tested.17 We discuss the extent of the inaccurate payments below.

RECOMMENDATIONS

• The Department of Public Safety should only approve system-

calculated retroactive payments if it has reviewed the calculations for
accuracy.

• The Department of Public Safety should not process estimated

retroactive payments.

• The Department of Public Safety should strengthen internal controls to

ensure the accuracy of retroactive payments.

• The Department of Public Safety should obtain guidance from

Minnesota Management and Budget on the mass retroactive pay
adjustment process, when needed.

17
There are 23 employees that are not included in Finding 5. Of those, 16 employees received accurate
payments; the remaining 7 employees did not receive system-calculated or estimated retroactive payments
and were not included in our sample testing. We cannot conclude on the accuracy of those payments.
Performance Audit 19

The department sent out several communications to affected employees. On June 29

and 30, 2022, the department notified the employees that their July 1, 2022, payments
would likely be incorrect. Throughout July 2022, the department sent additional
notifications on the expected timeline to complete calculations and process additional
payments or recoveries. Finally, in late August 2022, the department provided a memo
detailing the retroactive pay adjustment process, how payments were calculated, and the
complicating factors that led to payment errors. The department also gave employees
the option to request the details of their retroactive payment calculations.

To perform the retroactive payment calculations, payroll staff downloaded the system-
calculated retroactive payments in portable document format (PDF) from the state’s
payroll system. They added handwritten notes on each employee file indicating revised
pay rates, prior retroactive payments, and position changes that would affect the
calculation. Payroll staff gave timekeepers the employee files, and the timekeepers
completed the calculations.18 According to the department, the payroll administrator
spot-checked a few lines from each batch of completed calculations returned by the
timekeepers, to identify any obvious issues prior to entering the payments in the state’s
payroll system.

The department processed $216,760 in employee repayments—ranging from $9 to $5,791—

for 115 employees; the average repayment was $1,885. It also processed $210,880 in
additional payments, ranging from less than $1 to $7,845, for 354 employees; the average
payment was $596. The collection of repayments for many MLEA members continued
through December 30, 2022.

We recalculated the retroactive payments for 499 of 633 randomly selected employees,
and we determined that the corrections the department made resolved 296 of
483 inaccurate retroactive payments.

FINDING 6

The Department of Public Safety did not resolve incorrect retroactive

payments to 187 Minnesota Law Enforcement Association members.

At the time of our testing, the department had not resolved the inaccurate retroactive
payments for 187 employees. It overpaid retroactive pay rate adjustments to
133 employees by a total of $28,911 and underpaid 54 employees by a total of $19,791.

The inaccurate payments occurred for multiple reasons, including the department
(1) included payroll activity prior to the effective date of the retroactive pay adjustments,
(2) excluded payroll adjustments, (3) used the wrong compensation rates, and
(4) calculated straight-time activity at time and one-half.19 In addition, the department’s
calculations included numerous math errors that resulted from staff hand-calculating
retroactive payments, rather than using spreadsheets. Further, we identified instances

18
Timekeepers are responsible for verifying that a division or unit within the Department of Public Safety
has documented and approved timesheets in accordance with MMB’s policies and procedures. They also
assist with the verification of compensation rate adjustments that the department processes.
19
Straight-time means an employee’s regular hourly compensation rate. Time and one-half means an
employee’s regular hourly compensation rate times 1.5.
20 Retroactive Pay Adjustments for Law Enforcement Employees

where the calculations did not match the payments to the employees. The department
also stopped some payroll recoveries before it collected the entire overpayment it had
correctly identified.

For each error, the department either did not perform a secondary review of the
calculation; the secondary review was not sufficient to identify and correct the error; or
the department did not review payroll reports in enough detail to identify missing or
inaccurate retroactive activity.

RECOMMENDATIONS

• The Department of Public Safety should resolve inaccurate retroactive

payment errors for each employee identified.

• The Department of Public Safety should strengthen internal controls to

ensure the accuracy of retroactive payments.

Internal control management at the department started an internal review of retroactive

payments before our audit began. They took this measure because of the risk involved
in the retroactive pay adjustment process. We did not conduct an extensive review of
the results of the internal review; however, our initial review indicated that the internal
review did not identify all calculation errors the department made during its retroactive
payment process.
July 3, 2024

Judy Randall, Legislative Auditor

Office of the Legislative Auditor
140 Centennial Office Building
658 Cedar Street
Saint Paul, MN 55155

Dear Auditor Randall:

Thank you for the opportunity to respond to the audit report examining the retroactive pay adjustments for law
enforcement employees that occurred in 2022. Minnesota Management and Budget (MMB) staff and I value the
important role the Office of the Legislative Auditor (OLA) serves to improve government accountability and
enhance program effectiveness. We also appreciated the respectful and cooperative relationship between our
two agencies while the OLA conducted this audit.

Below you will find my response to the OLA’s audit finding and recommendations for MMB. I agree with the
OLA’s finding and can report that MMB implemented new procedures in 2022 that I believe comply with the
OLA’s recommendations. I also believe it is important to understand the unusual circumstances contributing to
the extraordinary complexity of these particular retroactive pay adjustments. This additional narrative is
provided after my response to the audit finding.

Response to the OLA’s Finding and Recommendations

The OLA has reported the following audit finding and recommendations related to MMB’s use of incorrect date
parameters in retroactive pay adjustment process for the 2021-2023 Minnesota Law Enforcement Association
(MLEA) labor agreement:

OLA Finding 1

Minnesota Management and Budget processed retroactive pay adjustments with incorrect date parameters for
Minnesota Law Enforcement Association members.

OLA Recommendations pertaining to Finding 1

• Minnesota Management and Budget should use the correct date parameters when processing
retroactive pay adjustments.
• Minnesota Management and Budget should strengthen internal controls by ensuring an experienced
employee reviews the process parameters in the state’s payroll system before it initiates retroactive pay
adjustments.
Office of the Legislative Auditor
July 3, 2024

Page 2

I agree with the OLA’s finding and support the OLA’s recommendations. MMB’s use of incorrect date
parameters, which is described in more detail in the section below, made an already difficult process even
harder for state agencies tasked with manually reviewing, calculating, and approving flagged employee records
in a short timeframe. Shortly after this error occurred, MMB strengthened internal controls by requiring a
secondary review, conducted by an experienced employee in MMB’s Statewide Payroll Services Section, of the
parameters used for retroactive wage adjustments before the adjustments are calculated by SEMA4, the state’s
human resources and payroll system. I believe MMB is already compliant with the OLA’s recommendations and
the audit finding has been resolved. The MMB employee responsible for monitoring this audit finding is Mary
Muellner, Statewide Payroll Services Director.

Additional Context on 2022 MLEA Retroactive Pay Adjustments

A variety of unique and extraordinary factors made the retroactive payment process for the 2021-2023 MLEA
labor agreement very challenging for state agencies to implement.

• Unprecedented complexity of multiple wage increases for MLEA-represented employees. In fiscal year
2022, the state implemented two MLEA labor agreements (the 2019-2021 and 2021-2023 agreements),
as well as lump sum payments enacted by the Legislature. This unprecedented confluence of wage
adjustments in the same year exceeded the technical capabilities of the SEMA4 system. The system was
unable to accurately calculate the retroactive payments in the 2021-2023 MLEA labor agreement, and it
flagged nearly all (97 percent) of MLEA-represented employee records for manual review, recalculation,
and approval by the affected state agencies. This rate far exceeded the rate of flagged records for
manual review during previous labor agreement implementations.
• Biweekly payroll cycle requires limited five-day review period for flagged employee records. State
employees are paid using a biweekly payroll cycle, with the first week used for entries and approvals,
and the second week used for final processing and payment. If work is not completed in a single payroll
cycle, the process has to start over to take into account the most recent pay period and the additional
hours worked. State agencies would need to restart their manual review, calculation, and approval of
flagged employee records. This five-day timeframe, while very short, is a practical necessity for the
processing of all retroactive pay adjustments in the state’s labor agreements.
• MMB error in the date parameters used for preliminary calculations. Adding to the complications,
MMB made an error in the preliminary calculation of the retroactive payments. Due to a coding error, a
single pay period’s retroactive payments were calculated twice. MMB employees identified this error on
day two of the five-day window and relayed it to the affected state agencies. MMB also flagged the
remaining three percent of MLEA-covered employee records that were previously unflagged. This
resulted in an additional 22 employee records needing manual review, calculation, and approval by the
affected state agencies. The amounts of overpayments calculated by SEMA4 because of this error were
a small component of the overall overpayments calculated and flagged in the system. However, it
compressed the timeline for state agency review, caused more employee records to be flagged for
manual calculations by state agencies, and added additional complexity to an already difficult process.
Office of the Legislative Auditor
July 3, 2024
Page 3

The series of events contributing to these overpayments were unprecedented. Shortly after these overpayments
occurred in 2022, MMB made changes to better assist state agencies during the retroactive payment adjustment
process. We have also increased proactive meetings and communications to prepare state agencies for
implementation and to discuss potential problems or complications. I am proud of the hard work of employees
in MMB and other state agencies, which has ensured subsequent retroactive wage adjustments have been
processed timely and accurately.

Once again, thank you for the opportunity to respond to the OLA’s report.

Sincerely,

Erin Campbell
Commissioner

Equal Opportunity Employer

July 3rd, 2024

Judy Randall
Office of the Legislative Auditor
Room 140, Centennial Building
658 Cedar Street
Saint Paul, Minnesota 55155-1603

Dear Legislative Auditor Randall:

The Department of Corrections (DOC) appreciates the opportunity to provide a written response to the findings
and recommendations of the performance audit of law enforcement employees’ retroactive pay adjustments for
Fiscal Year 2022. Following are DOC’s responses to your finding and resulting recommendations.

Finding: The Department of Corrections issued incorrect retroactive payments to two Minnesota Law
Enforcement Association members.
Response: We reviewed your finding that the Department underpaid two Minnesota Law Enforcement
Association (MLEA) members by $258.00 and we concur in whole.
Recommendation: The Department of Corrections should resolve inaccurate retroactive payment errors for
each employee identified.
Response: The erroneous retroactive payments were corrected shortly after we were contacted by the OLA’s
auditors in August 2023. Additionally, the Department’s office of financial management continues to review its
administration of staff payroll management to ensure that staff are paid accurately.
Recommendation: The Department of Corrections should strengthen internal controls to ensure the accuracy of
retroactive payments.
Response: DOC is committed to strengthening internal controls, not only in payroll processing, but across the
agency. This past fall, the agency created the Office of Inspector General (OIG) that oversees compliance and
internal controls, and the agency has also reestablished its internal audit function after several years due to
resource constraints.

Again, thank you for the opportunity to respond and we look forward to implementing the recommendations
provided in the report as we strive for continuous improvement.

Sincerely,

Paul Schnell

Commissioner
July 3, 2024

Judy Randall, Legislative Auditor

Office of the Legislative Auditor
Centennial Office Building
658 Cedar St. Room 140
St. Paul, MN 55115

Dear Legislative Auditor Randall:

Thank you for the opportunity to review and comment on the Office of the Legislative Auditor’s (OLA’s)
Retroactive Pay Adjustments for Law Enforcement Employees at the Departments of Commerce,
Corrections, Natural Resources, and Public Safety report. The Minnesota Department of Natural
Resources (DNR) appreciates your office’s thorough analysis of this complex situation and the demands
on the state’s payroll system and staff when executing such retroactive adjustments. We value the
OLA’s recommendations for improving the DNR’s process for implementing any mass retroactive pay
adjustments in the future.

We fully understand the significance of these retroactive pay adjustments to our law enforcement
employees and the importance of employee confidence in our ability to deliver their collectively
bargained wages and benefits. Please know that DNR has been working since we first became aware of
the issues with our execution of these retroactive pay adjustments to understand the scope of the
matter, initiate steps to correct the inaccurate payments, and identify and implement steps to avoid any
recurrence in the future. Thus far, this includes correcting the inaccurate payments with 146 of the 164
affected employees and adding steps to our internal validation process to ensure the accuracy of
retroactive payment amounts. As part of our continuing work, we are committed to responding to your
office’s recommendations, as outlined below.

The DNR would also like to express our appreciation for the opportunity to provide this response to the
OLA report. Our letter responds to the findings and recommendations that pertain specifically to the
DNR.

Audit Finding #3
The Department of Natural Resources approved system-calculated retroactive payments it knew were
incorrect for 161 Minnesota Law Enforcement Association members before it conducted the required
review of the calculations.

The Department of Natural Resources also calculated and issued incorrect retroactive payments for
three additional Minnesota Law Enforcement Association members.

Audit Recommendation: The Department of Natural Resources should only approve system-calculated
retroactive payments if it has reviewed the calculations for accuracy.

Minnesota Department of Natural Resources | Commissioner’s Office Equal Opportunity Employer

500 Lafayette Road North, St. Paul, Minnesota 55155
 Page | 2

Audit Recommendation: The Department of Natural Resources should strengthen internal controls to
ensure the accuracy of retroactive payments.

Audit Recommendation: The Department of Natural Resources should obtain guidance from Minnesota
Management and Budget on the mass retroactive pay adjustment process, when needed.

DNR Response: The DNR concurs that the agency approved system-calculated retroactive payments that
were incorrect for 161 Minnesota Law Enforcement Association (MLEA) members before it conducted
the required review of the calculations and that the agency calculated and issued incorrect retroactive
payments for three additional MLEA members.

The DNR will take the following Corrective Actions:

3.1 Review and improve internal process for reviewing and ensuring the accuracy of
retroactive payments. DNR’s Human Resources office will examine its internal processes to
ensure that adequate measures are in place for reviewing and ensuring the accuracy of system-
calculated retroactive payments prior to approving them. Our review of internal controls and
identification and implementation of improvements will be completed no later than December
31, 2024.

3.2 Reinforce training of current staff. DNR’s Human Resources office will review the status of
training received by payroll staff who handle system-calculated retroactive payments to ensure
they are current with all available training and understand what to do in the event of unusual
circumstances or severe time constraints. A review of training status will be completed by
August 31, 2024. Any additional training identified through the review will be completed by
December 31, 2024.

3.3 Work with Minnesota Management and Budget (MMB). DNR’s Human Resources office will
meet with MMB regarding the mass retroactive pay adjustment process to confirm the
approach we will use in the future to address system-flagged retroactive pay adjustments. Our
Human Resources office will meet with MMB by September 30, 2024.

Audit Finding #4
The Department of Natural Resources did not resolve incorrect retroactive payments to 20 Minnesota
Law Enforcement Association members.

Audit Recommendation: The Department of Natural Resources should resolve inaccurate retroactive
payment errors for each employee identified.

Audit Recommendation: The Department of Natural Resources should strengthen internal controls to
ensure the accuracy of retroactive payments.

DNR Response: The DNR concurs that it had not resolved 20 incorrect retroactive payments to MLEA
members at the time of the OLA’s field audit.

Equal Opportunity Employer

 Page | 3

The DNR will take the following Corrective Actions:

4.1 Resolve inaccurate payment errors. By October 31, 2024, the DNR will resolve the 18
repayment instances, totaling $1,761, that remain outstanding as of the date of this letter.

4.2 Review and improve internal process for reviewing and ensuring the accuracy of
retroactive payments. DNR’s Human Resources office will examine its internal processes to
ensure that adequate measures are in place for reviewing and ensuring the accuracy of system-
calculated retroactive payments prior to approving them. Our review of internal controls and
identification and implementation of improvements will be completed no later than December
31, 2024.

4.3 Interagency Collaboration to Address Complex Retroactive Pay Adjustments. The DNR will
continue collaboration with MMB and other agencies as appropriate to identify limitations of
the current enterprise payroll system when addressing complex retroactive pay adjustments,
including the accuracy of the system-generated calculations; the reliance on manual
calculations; and the time required for agencies to review, adjust, and approve system-
generated calculations.

Once again, we appreciate the opportunity to respond to your recommendations and the opportunity to
work with your office and staff throughout this evaluation.

Sincerely,

Sarah Strommen
Commissioner

Cc: Heather Rodriguez, Audit Director, OLA

Lori Leysen, Deputy Legislative Auditor, OLA
Legislative.Auditor@state.mn.us
Barb Naramore, Deputy Commissioner, DNR
Reena Solheid, Division Director, DNR
Denise Legato, Director of Human Resources, DNR

Equal Opportunity Employer

 MINNESOTA DEPARTMENT OF PUBLIC SAFETY

Office of the Commissioner

445 Minnesota Street • Suite 1000 • Saint Paul, Minnesota 55101-5100
Phone: 651.201.7160 • Fax: 651.297.5728 • TTY: 651.282.6555
dps.mn.gov

July 3, 2024

Alcohol
and Gambling Judy Randall Legislative Auditor
Enforcement
658 Cedar Street, Suite 140
Bureau of St. Paul, MN 55155
Criminal
Apprehension
Dear Auditor Randall,
Driver
and Vehicle
Services Thank you for the opportunity to review and respond to the findings and recommendations
included in the Minnesota Law Enforcement Association (MLEA) Retroactive Payments
Emergency
Communication
Internal Controls and Compliance audit conducted by your office. The OLA report highlights
Networks issues with MLEA retroactive payments calculations and retroactive pay adjustments not
Homeland
being accurately processed. The Department of Public Safety (DPS) has already taken
Security and measures to address findings listed within this report. Moving forward, DPS will continue to
Emergency strengthen the internal controls to ensure accuracy of retroactive payments and other payroll
Management
processes that are in alignment with the audit’s findings and recommendations.
Minnesota
State Patrol Finding Number 5
Office of The Department of Public Safety approved system-calculated retroactive payments it knew
Communications were incorrect for 73 Minnesota Law Enforcement Association members before it
Office of conducted the required review of the calculations.
Justice Programs

Office of The Department of Public Safety issued estimated retroactive payments to 513 Minnesota
Pipeline Safety Law Enforcement Association members before verifying the amounts.
Office of
Traffic Safety The Department of Public Safety calculated and issued incorrect retroactive payments for
State Fire
24 additional Minnesota Law Enforcement Association members.
Marshal
DPS Response
DPS concurs with this finding. DPS will strengthen internal controls through the following
corrective actions:

• DPS Fiscal & Administrative Services (FAS) will be hiring a Payroll Supervisor
and an additional agency-wide payroll position to better support division payroll
staff.
• FAS and the DPS Human Resources (HR) will coordinate more closely on
employee compensation rates and retroactive payments.
• HR will create an internal operating procedure and train HR staff on the proper
process of updating employee job records for compensation rates and include
comments when making corrections or adjustments to compensation rates in the
Sema4 system.

EQUAL OPPORTUNITY EMPLOYER

 Finding Number 6
The Department of Public Safety did not resolve incorrect retroactive payments to 187 Minnesota
Law Enforcement Association Members.

DPS Response
DPS concurs with this finding. DPS will resolve any inaccurate retroactive payment errors for each
employee identified. DPS will strengthen internal controls through utilization of electronic
worksheets to perform calculations instead of manual calculations from portable document format
(pdf), verify compensations rates and previous payroll adjustments to ensure accurate compensation
rates are used for calculations, perform secondary review of calculations to verify accuracy of
retroactive payment calculations, and review payroll reports to identify missing or inaccurate
retroactive activity. DPS conducted an internal, secondary audit of retroactive payment calculations.
Based on the OLA’s review and audit determinations of the original retro calculations and comparing
the OLA findings to DPS’ secondary review, DPS will be contracting with an external auditor to
ensure that all retroactive payments get calculated and implemented correctly.

We appreciate the review conducted by the OLA on this audit. DPS remains committed to working with
the OLA to safeguard public funds and meet the needs and expectations of our employees. As such,
DPS has already taken corrective measures to address OLA findings prior to the release of this full
report and we will continue to implement improvements that are in alignment with the discussed
findings and recommendations.

Sincerely,

Bob Jacobson
Commissioner
Financial Audit Staff
Judy Randall, Legislative Auditor
Lori Leysen, Deputy Legislative Auditor

Audit Directors Auditors

Ryan Baker Joseph Anderson
Jordan Bjonfald Ria Bawek
Kayla Borneman Nicholai Broekemeier
Mark Mathison Gabrielle Gruber
Heather Rodriguez Dylan Harris
Valentina Stone Nicole Heggem
Scott Tjomsland Andrea Hess
Zach Yzermans Dustin Juell
Christian Knox
Audit Coordinators Sheena Kurth
Joe Sass Benjamin Path
Peng Xiong
Audit Team Leads
Shannon Hatch
Gabrielle Johnson
Holly Runia

Senior Auditors
Tyler Billig
Deb Frost
Lisa Makinen
Alec Mickelson
Duy (Eric) Nguyen
Crystal Nibbe
Erick Olsen
Zakeeyah Taddese
Emily Wiant

For more information about OLA and to access its reports, go to: www.auditor.leg.state.mn.us.

To offer comments about our work or suggest an audit, evaluation, or special review, call
651-296-4708 or e-mail legislative.auditor@state.mn.us.

To obtain printed copies of our reports or to obtain reports in electronic ASCII text, Braille, large print,
or audio, call 651-296-4708. People with hearing or speech disabilities may call through Minnesota
Relay by dialing 711 or 1-800-627-3529.

Printed on Recycled Paper

Office of the Legislative Auditor
Suite 140
658 Cedar Street
Saint Paul, MN 55155