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S.F. No. 2334 - State Auditor Disputed Billings Resolution Procedure Establishment
Author: Senator Mark Johnson
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Date: March 18, 2019


Under current law, the state auditor bills political subdivisions for audits conducted by the state auditor.  When a political subdivision disputes a billing and doesn’t pay it, the political subdivision is not required to pay interest on the unpaid amount if the dispute is resolved within 60 days. Upon resolution of the dispute, the political subdivision must pay accrued interest for all proper invoices for which payment was not received within 60 days of the original receipt.

Section 1 [Payment on Interest on Late Payments Required] changes the treatment of interest on a disputed billing from the State Auditor for an audit for a political subdivision, so that no interest accrues unless an administrative law judge, after a contested case proceeding, orders the political subdivision to pay interest.

Section 2 [Resolution of Disputed Billings] requires a state auditor to initiate a contested case proceeding if a political subdivision submits a letter to the auditor disputing the billing.  The contested case proceeding is adjudicated by an administrative law judge, to resolve the dispute.  The adjudication of the ALJ is final and cannot be modified or rejected by the state auditor.

Section 3 [Effective Date] makes sections 1 and 2 effective the day after enactment and specifies that this change in law applies to two categories of disputes:

  1. Disputes submitted on or after the effective date; and
  2. Disputes related to billings for audits in specified counties for supplemental calendar year 2015 audits. The specified counties are Clearwater, Hubbard, Kittson, Koochiching, Lake of the Woods, Pennington, Red Lake, and Roseau.
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