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Pioneer Editorial: Uncovering fraud in state funds

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New Gov. Mark Dayton wasted no time on Friday in asking the legislative auditor to review the state Department of Revenue's internal controls after the U.S. attorney filed charges against a former department employee, accusing her of embezzling nearly $2 million in state taxpayer dollars.

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The woman was charged in federal court with money laundering and mail fraud for allegedly stealing $1.9 million from the state Revenue Department by creating more than 200 false tax refund checks and sending them to two relatives. The three allegedly split the ill-gotten proceeds.

"If true, this serious charge constitutes a breach of the public trust, and is completely unacceptable," Gov. Dayton said in a statement after the charges were presented. He asked the legislative auditor to review the department's internal controls so that it doesn't happen again.

Hopefully, the incident is only an aberration. But with the state facing a $6.2 billion budget deficit, every $2 million falling through the cracks is something. Especially in Revenue, where the bean counters are supposed to collect every dimed owed the state.

The woman allegedly falsified tax returns and sent refund checks to her two relatives over a five-year period -- all during the Gov. Tim Pawlenty administration. It is unbelievable such an incident could go on unchecked for so long a period of time. Local governments are audited regularly by the state or under state jurisdiction, which usually catches such fraud fairly early or makes accounting recommendations to prevent such circumstances from occurring.

Gov. Dayton, in his statement, alluded that a review of the Revenue Department may not be enough.

"I am mindful of the warnings the Legislative Auditor has issued previously that the management of certain state agencies lacks the necessary oversight and controls to prevent the misuse of public money," the Democratic governor said. "The people of Minnesota deserve accountability and vigorous oversight of our taxpayer dollars."

That should set the stage for the Republican-led Legislature to ensure that before it cuts money from needed programs to solve the budget dilemma, that the money currently allocated is spent as it should be and that no taxpayer dollars are sliding through the cracks.

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