Minnesota Senate Minnesota House of Representatives

State Capitol 75 Rev. Dr. Martin Luther King Jr. Blvd St. Paul, MN 55155

Senator D. Scott Dibble 651-296-4191 sen.scott.dibble@senate.mn Representative Frank Hornstein 651-296-9281 rep.frank.hornstein@house.mn

May 28, 2013

Commissioner Charles A. Zelle Minnesota Department of Transportation 395 John Ireland Blvd St. Paul, MN 55155 Dear Commissioner Zelle: We are writing to share our very serious concerns about the recently completed audit of the MnDOT Office of Civil Rights and the Disadvantaged Business Enterprise (DBE) Program it manages. We were given a copy of the audit from MnDOT last week, on the last day of our legislative session, a full week following its finalization. Since that time we have met with the Legislative Auditor to discuss what steps may be needed to further investigate and address the fundamental 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 playing field 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 beyond reproach. 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 without any justification. We would like to know how the goals are set by the office, what oversight 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 request updated and complete information about DBE participation rates for those three years. If the information does not exist, please explain why. Monitoring and enforcement was found to be severely lacking which resulted in potentially millions of dollars going to non-DBE contractors or contractors who were no longer eligible to participate in the program. Another finding showed that work never

performed was still credited. The audit reported $1.9 million was credited to a non-DBE subcontractor without any documentation, and $1.6 million was funneled through the DBE for materials by a non-DBE supplier. At the same time, the audit said ineligible DBE companies were included in a list of eligible participants. Please provide us with information about what steps the Office of Civil Rights is taking to review and enforce DBE guidelines and how MnDOT administration plans to review the offices monitoring of eligible participants. We are deeply troubled by findings that confidential documents with non-public, private data in them were unprotected. Has any damage been done to the subject of that data as a result? 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 overruled by the Director with no supporting rationale. Compounding the issue, the Director backdated and changed the memo that overruled this finding in the process of providing documentation for a lawsuit currently in litigation. Please provide us with detailed information about what steps have been made to ensure that this decision and decisions like this are not arbitrary. Please report to us how data that supports decision making, if any exists, will be developed, retained and secured. The Office conducted a study, with the assistance of the University of Minnesota, to develop 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 not established more rigorous and uniform criteria for both goal setting and compliance monitoring. Finally, it is our understanding that the Office of Civil Rights Director has been reassigned to another office in MnDOT. We request information on what role she now has in your agency, what oversight she has of staff, agency functions, funds, who will supervise her, and how the agency plans to monitor her performance. We have highlighted some of the findings that are of particular concern. We would appreciate your reaction to everything contained in the report. Also, if the wrongdoing has been determined to rise to a level beyond nonfeasance, that will be very important for us to know. Thank you in advance for your timely and thorough response to these questions. We look forward to hearing from you about what actions you are taking to bring integrity back to the Office of Civil Rights and the DBE Program. Sincerely,

D. Scott Dibble, Chair Senate Transportation & Public Safety Committee State Senator, District 61 cc: Jim Nobles, Legislative Auditor

Frank Hornstein, Chair House Transportation Finance Committee State Representative, District 61A