ST. PAUL, Minn. - A newly released report by the legislative auditor shows issues with Minnesota's MNLARS vehicle registration system may have left some vehicle owners paying too much or too little for their annual vehicle registration taxes.
The audit looked at the first six months of the MNLARS system after it launched in July 2017. The report found MNLARS handled the vast majority of transactions accurately, especially for vehicles already registered under the old registration system. However, the audit found MNLARS had trouble with some newly registered vehicles, with inaccuracies estimated from 36 percent to 46 percent of the time.
The auditor found a major issue contributing to those inaccuracies was that vehicle base values were sometimes entered incorrectly in the MNLARS system. In some cases, this was due to inconsistencies or delays in base values reported by automakers. In a few extreme cases, the base value instead listed a vehicle's weight or odometer reading instead of the base value price, leading the customer to be over- or undercharged, though the audit was unable to estimate a dollar amount.
In additional vehicle categories, the audit estimated undercharges reached $578,360 for registrations of passenger vehicles older than 10 years, though that affected less than 1 percent of vehicles in that category. The auditor's report also found $130,855 in overcharges, and $1.9 million in undercharges in registrations for heavy vehicles like trucks, tractors, RVs, and one-ton pickups. However, in a written response, Minnesota IT services claims the auditor vastly over-estimated those undercharges by not taking into account certain exceptions, and listed them as errors instead.
In a statement, Minnesota IT Services and the Department of Public Safety notes many of the issues reported by the legislative auditor were not because of problems with the computer program itself:
"Where system gaps remain, we are committed to making enhancements to MNLARS accordingly. But let's be clear: the vast majority of inaccuracies asserted in this report are not the result of a malfunctioning MNLARS IT system. Rather, they largely reflect differences in interpretation of statute, human error in data entry, and the misalignment between unique Minnesota laws and automotive industry practices. We at Minnesota IT Services and the Department of Public Safety stand ready to work with the Minnesota Legislature to clarify and manage the complexities that underlie motor vehicle laws and industry practices in Minnesota," the statement read.
The legislative auditor will formally present the report to the legislature's MNLARS Steering Committee on Wednesday in St. Paul. The auditor is expected to recommend that the state reimburse people who were overcharged, but says state law may prevent the state from collecting any of the taxes that were undercharged.
The candidates for governor also released statements reacting to the legislative auditor's report on Tuesday.
Statement from Republican Jeff Johnson:
"MNLARS is a disaster. It's years late and way over-budget, and it fails at its most basic tasks...and Tim Walz wants to hand over our healthcare to the same crowd that can't figure out how to register a car. As governor, I will immediately bring an accountability to government that we haven't seen the past eight years."
Statement from Democrat Tim Walz:
"This is unacceptable. Strong management and oversight is important in any organization, especially one as as large as state government. Whether it's teaching a classroom, coaching a state champion football team, leading National Guard soldiers, or running a Congressional office, I have always lived by clear standards for success. As Governor, I will create detailed implementation plans at the outset that set explicit expectations, frequently check in on progress being made, and hold people accountable for their work. This is the type of leadership that Minnesota needs in the Governor's office."