A new performance audit by the Office of the Legislative Auditor (OLA) reveals widespread financial mismanagement in the Office of Governor Tim Walz and Lieutenant Governor Peggy Flanagan, with 12 findings of noncompliance, including late vendor payments, inaccurate payroll and reimbursements, missing documentation, and failure to track state assets.

Covering July 1, 2022, through December 31, 2024, the audit concludes the office “generally did not comply with the criteria we tested” and exposed significant internal control deficiencies across receipts, payroll, inventory, and nonpayroll spending.

“When the Governor’s own office can’t follow basic financial controls—overpaying employees, losing state property, and stiffing vendors for months—it’s no wonder massive fraud is exploding across state government,” said Senate Republican Leader Mark Johnson (East Grand Forks). “Sloppy accountability at the top breeds waste and abuse everywhere else. It’s tempting to dismiss the small dollar amounts, but if Gov. Walz can’t run his own office with integrity, he clearly can’t hold agencies accountable for the billions of dollars they manage.”

The audit follows prior unresolved findings and comes amid ongoing scrutiny of state program oversight. The Governor’s Office claims most issues are resolved, but OLA notes several prior findings remain only partially addressed.