Legislative auditor: Agency leaders fell short launching MNLARS

Updated 3:20 p.m. | Posted 9:21 a.m.

Leaders in the state's public safety and information technology departments didn't provide enough oversight for MNLARS, the state's troubled vehicle registration and licensing system, leading to its early failure, the Minnesota legislative auditor said Thursday.

Problems began almost right from the start when agency officials picked a private vendor, Hewlett-Packard, to build the system, according to the long-awaited auditor's report .

Despite a detailed contract with Hewlett-Packard, the work was "unsatisfactory," and by the time the agencies killed the contract in 2014, "they had little to show for several years of work," according to the auditor.

Ultimately, after more than $100 million spent and nine years leading to the 2017 release, "many factors, rather than a single person or a single decision," crippled the system's release and "agency leadership did not take sufficient steps to ensure that this large and risky project would succeed," the report said.

The Minnesota Licensing and Registration System was rolled out in July 2017, replacing a 30-year-old system. There were immediate problems, including delays in the processing of license and title transactions.

MNLARS is now in its third governor's administration. Minnesota IT Services and the Department of Public Safety, have made many improvements since the botched release and continue to seek additional funding for ongoing repairs.

DFL Gov. Tim Walz said last week that he needs $15.7 million in stopgap funding to keep MNLARS repairs and improvement on track. He's also expected to address the project, as well as other IT work, in his budget recommendations next week.

Progress on the MNLARS repairs remains incremental, said state Rep. Paul Torkelson, R-Hanska.

"Even as these fixes roll out, the workload on our deputy registrars, our auto dealers and our tow truck operators continues to be overbearing," he said. "We expect them to put in an inordinate amounts of time to do the work that they used to be able to do fairly efficiently. And that's another failure of administration."

Torkelson, the former chair of the House Transportation Committee, remains convinced private vendors are a better option for correcting the systems flaws than doing the work in-house.

"It seems to me if it was handled clearly and carefully, it wouldn't have failed," he said of MNLARS.

House Majority Leader Ryan Winkler, DFL-Golden Valley, said he has confidence in the hands-on approach Walz has shown on MNLARS early in his term.

Lawmakers, he added, will move this session to provide financial reimbursement to the customers and deputy registrars that were saddled with extra costs due to the bungled rollout.

The legislative auditor names two MNLARS managers, Paul Meekin and Susan Rohde, as sharing blame for the system's flaws, as well as others who it said failed to keep the project on task or didn't do enough to spot flaws early.

None of them are still employed by the state due to retirements, resignations or, in the case of one, a change in administrations.

Rohde, in a letter included in the report, said she came on in April 2015, after the state had cut ties with Hewlett-Packard and state lawmakers were ratcheting up the pressure over the lack of progress with MNLARS.

"The direction I was given was to do the best I could with a bad situation and deliver MNLARS, which I and many other dedicated individuals achieved," she wrote, adding she was "greatly disturbed by the anonymous and unsubstantiated opinions used to impugn my character."

Rohde's name had not previously emerged publicly in relation to MNLARS' woes. She told MPR News on Thursday she is talking to a lawyer and considering her legal options.

Last year, an outside investigator hired by the state's information technology department concluded that Meekin, a former project manager, failed to provide "meaningful oversight" and fostered an environment where "decisions could not be questioned or challenged."

Meekin disputed that investigator's report and conclusions, writing: "Making one person a fall guy only perpetuates these IT disasters."

Senate Transportation Finance and Policy Committee Chair Scott Newman, R-Hutchinson, said he was still digesting the auditor's report but added that critical decisions might be coming on the future MNLARS.

The state, he said, could "continue to spend money on it and continue to have MNIT and DPS do the work. Or, do we just say enough is enough? Scrap it and start over. That is a really difficult decision."