Report blames two state agencies for botched MNLARS launch

Minnesota government agencies failed to provide sufficient oversight and risk management as they developed software to handle vehicle registration and driver's license requests, a new auditor's report has concluded.

In a toughly worded review released Thursday, the Legislative Auditor's Office delved into what went wrong with the Minnesota Licensing and Registration System (MNLARS). The report placed blame for failures on the state's information technology agency and Department of Public Safety.

"The system did not adequately meet the needs of Minnesota residents and key stakeholders, despite a decade of work and significant state expenditures," the report said. "Leaders of these agencies and the project did not provide the oversight and direction necessary to ensure, in the end, that the system would meet user needs."

The state launched the computer system to process vehicle tabs, plates, licenses and other requests in 2017. It has since caused prolonged waits for customers and headaches for state workers.

Over the past decade, state spending on the system has topped $100 million, the review said.

Legislative Auditor Jim Nobles' office has been conducting a number of MNLARS-related reviews, including the new report on what went wrong with the system and a broad evaluation of the state agency that manages it, Minnesota IT Services.

Minnesota IT Services and the Department of Public Safety took up the MNLARS project after a private vendor, Hewlett-Packard, failed to create a system that met state specifications.

Neither state agency had a sufficient number of employees working on MNLARS, Nobles' staff found.

The review said officials overseeing the system left some stakeholders out of the process, and their decisionmaking was not transparent despite concerns raised by their staff.

The IT agency lacked the policies and procedures to oversee development of the software, the report said. Project leaders did not enforce proper practices for developing code and also failed to sufficiently test software.

Auditor's office staff discovered that the Department of Public Safety, which includes the division of Driver and Vehicle Services, should have streamlined how it did business before software was created to handle those operations.

Sen. Mary Kiffmeyer, R-Big Lake, addressed that problem at a Legislative Audit Commission meeting Thursday evening.

She said she has reviewed other states' licensing regulations and "Minnesota stands far and above as the most complicated." Kiffmeyer said she is working on bills to simplify the rules but is disappointed that state agencies didn't suggest that the Legislature make changes before developing a system that must navigate those complexities.

Mistakes were widely made with the MNLARS project, Rep. Rick Hansen, D-South St. Paul, said at the commission meeting. He apologized to Minnesotans, adding, "This audit shows what happened in detail, and now we have to find a way of getting this completed."

The lessons from the MNLARS rollout need to be applied to future IT systems development to ensure the teams do not repeat mistakes, Minnesota IT Services Acting Commissioner Bill Poirier said in a statement.

"At a time when state government remains reliant on aging IT systems and cybersecurity threats are increasing, we must work together as state leaders to address IT project challenges and chart a course forward to a more modernized, efficient, and secure state government," Poirier said.

The review specifically called out IT managers Paul Meekin and Sue Rohde, noting some people said Meekin did not provide enough oversight of the project or communicate sufficiently with technical staff.

Rohde, who oversaw the day-to-day development of MNLARS, did not listen to stakeholder concerns, some staff told the auditors.

She also did not enforce proper standards for testing and developing code, a Minnesota IT Services official said.

"I showed up eight years after MNLARS started and did everything I could to make it successful, even though a number of truly mind baffling, terrible decisions had been made … before I arrived," Rohde told the auditors.

Rohde said in an interview that the report contains "provably false" statements about her and that she could explore legal options.

But now, Rohde said, the state "should really focus on adding online capabilities, making this a system it should be for the 21st century."

That would include allowing people to transfer car titles and do other transactions online, she said. The state now requires customers to go to a deputy registrar's office for that process.

The state agencies that handled the project agreed with the auditor's recommendations, such as setting adequate standards for oversight of software development. But they also said the agencies have already implemented many of the changes.

"It is important to point out that, since November 2017, MNIT and DPS have overhauled MNLARS system development processes, which have yielded improvements in the stability and reliability of the system for our stakeholders," the agencies wrote in a response to the review.

Minnesota IT Services has continued to update MNLARS since 2017, adding capabilities and reducing issues for the deputy registrars who use the system. The latest update came Sunday and included a long-awaited fix so people can transfer specialty license plates between cars.

Gov. Tim Walz and Sen. John Jasinski, a Republican from Faribault, traveled to Jasinski's hometown Thursday to test the system by transferring the senator's specialty plates.

"I view it as a gold opportunity, [based on] what they put out, to fix those deficiencies," Walz said of the auditor's report at an event Wednesday.

Work on the MNLARS system, which replaced one developed three decades earlier, got its start under former Gov. Tim Pawlenty. The bulk of the work occurred under former Gov. Mark Dayton.

There is still a long way to go for the system to have the full functionality the state is aiming for, and the IT services agency has run out of funding to keep adding improvements.

Walz recently asked for $15.7 million to continue the work. Rep. Paul Torkelson, R-Hanska, said he doesn't believe that full amount is necessary right away.

"There's going to be more money spent, we know that," Torkelson said. "We're just going to try to make sure it's spent well and we're getting something for our investment."

Jessie Van Berkel • 651-925-5044