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

July 18, 2013

Commissioner Charles A. Zelle Minnesota Department of Transportation 395 John Ireland Blvd St. Paul, MN 55155 Dear Commissioner Zelle: Thank you very much for your letter of June 5th, and for meeting personally with us on July 8th. We appreciate your responsiveness to our concerns regarding the internal audit of MnDOT's Office of Civil Rights and its management of the Disadavantaged Business Enterprise (DBE) program. This memo is to memorialize our conversation and our understanding of commitments on your part. They are as follows: MnDOT will undertake a thorough process for attracting the best possible new coordinator of the program, including an assessment of what, exactly, the position demands. We discussed MN DOT's recruitment of an individual with strong administrative, public relations and political skills. We have received the announcement of changes to MnDOTs organizational structure and note that the OCR reports directly to MnDOTs chief counsel, with a dotted line reporting relationship to you. This is part of your commitment to elevate the DBE program to ensure that its functions are more central to the core mission of the agency and so that it will receive the necessary oversight, support and resources to succeed in its responsibilities. We heard assurances that record keeping issues would continue to be addressed via a new system that has been acquired that ensures that documents are not misplaced, sensitive data is not breached, and information can be tracked easily by staff and other appropriate stakeholders.

We raised issues about both overall and project specific goal setting procedures in the DBE program and we agreed that improvements in methodology, standardization and training is a key priority (and that some of this is already underway). An important point of discussion was the need for MnDOT to provide much more detailed information about project participation rates and provide for better accounting and reporting of those rates. We raised issues regarding the conflict of interest between the program's monitoring and enforcement functions and its mission to increase participation rates. However, based on your letter of June 5th and our July 8th discussion, it remains unclear how MnDOT intends to address the conflict of interest issue. The issue was highlighted in the MnDOT internal audit report as important, and the Legislative Auditor has indicated he thinks it is a valid issue that needs to be addressed by MnDOT. Therefore, we request that you communicate to uspreferably in writinghow you intend to address the issue. You committed to keeping us up to date on the agencies activities and progress on making necessary changes and improvements to the office and its programs. We will, in turn, share any and all information with our committee members, as we have done to date. You agreed to meet with and consider whether any service providers external to MnDOT may be able to bring value to this work. You will keep the Legislative Auditor apprised of the findings of your personnel investigation. We agreed that given the seriousness of the issues involved and the ineffectiveness of past efforts to address them, a follow-up independent review of the Office of the Civil Rights and the Disadvantaged Business Enterprise program should be conducted in the future. If possible, it should be conducted by the Office of the Legislative Auditor but, if that is not possible, it would be acceptable for the review to be conducted by MnDOTs Office of Internal Audit. In the meantime, MnDOT and legislative leadership will continue to keep informed and make use of the services, advice and expertise of the Office of the Legislative Auditor. We look forward to our on-going dialogue with you regarding improving the DBE program at MnDOT, and will schedule a follow-up meeting during the 3rd quarter of this year to monitor progress reforming the functioning of this vital program. Sincerely,

D. Scott Dibble, Chair Senate Transportation & Public Safety Committee

Frank Hornstein, Chair House Transportation Finance Committee

cc:

Sen. Bobby Joe Champion Jim Nobles, Legislative Auditor Scott Peterson, MnDOT Nick Thompson, MnDOT