Legislative auditors say DNR’s new electronic licensing system is not ready for planned spring launch

For the record, Lori Leysen, Deputy Legislative Auditor, told the Financial Subcommittee that the Office of the Legislative Auditor’s special examination concluded the Department of Natural Resources’ Electronic Licensing System (ELS) "was not ready to launch" on the timeline the agency had earlier announced.

The audit, presented by Joe Sass, IT Audit Director, said auditors opened a special examination because of persistent delays and complaints and identified seven ongoing concerns that pose significant risks to the state and the public. The report noted the ELS processes more than $90 million in transactions annually across roughly 2.3 million licensing transactions and that the current licensing system has been live for more than 25 years.

Sass told the committee that, after DNR and MNIT delayed a March 2025 release, the state established 11 critical success criteria to judge readiness. "At the end of February," he said, "6 of these 11 had not been met," and the auditors recommended that DNR not begin launch activities until those indicators are satisfied. The auditors also highlighted the absence of a finalized service-level agreement (SLA) with the vendor, noting the contract includes a clause that any failure to mutually agree to an SLA "shall not result in a delay in the ELS go live," a provision the auditors characterized as risky and "odd."

Those concerns intersect with statutory timing. The report describes 2024 law changes that become effective upon full implementation of the new system; because DNR now intends a phased rollout rather than a single release, the auditors warned that it is unclear when statutory changes take effect and that ambiguity could cause enforcement or public‑facing confusion (for example, whether physical stickers or tagging rules remain in force).

DNR and Minnesota IT Services (MNIT) disagreed with any rush to launch but said they are working to address the issues. John Eichten, Commissioner of MNIT, described the project as the implementation of a configurable commercial software-as-a-service product (PayIt’s Outdoors Core) rather than a custom development effort. He said agency and MNIT staff have reduced open items substantially: "We are now down to only 2 that are not green, and they are not green for the slimmest of reasons," referring to configuration tweaks and final interface work.

Eichten also said he would not allow a go‑live without an SLA in place: "I would not permit a system to go live without an SLA in place." DNR Assistant Commissioner Bob Meiers told the committee the agency completed the legislative changes needed for hunting and fishing pieces and that the Senate Environment Committee recently clarified phase‑in effective dates and extended appropriations to 2027. "We have completed all of the legislative changes that we need to implement the hunt‑fish pieces," Meiers said.

The auditors flagged other program risks: the project’s procurement history (Sovereign Sportsman Solutions, S3, was later acquired by PayIt), the state’s payment model for the vendor (the vendor will receive transaction fees after launch rather than large upfront development payments), and the prospect of legacy systems—firearm certification and the current ELS—running in parallel with the new system, increasing support complexity.

The auditors reported the state and vendor had spent roughly $4.2 million through the end of fiscal year 2025 on the project, the state paid $300,000 for a custom enforcement mobile app, and the contract defines a total obligation for transaction fees, the enforcement app, and hosting not to exceed approximately $16.4 million through April 16, 2028.

The subcommittee pressed MNIT and DNR on timelines: DNR said an amended contract was drafted and under final vendor review and expected to be signed; MNIT said it expects to finalize the SLA and remaining success‑criteria items by April 30 and to pursue a phased launch timed to avoid seasonal spikes such as fishing opener. Kelly Straka, DNR’s Fish and Wildlife Division Director, said the agency had conducted "robust testing" of the system.

Next steps recorded in the hearing: DNR and MNIT are finalizing an amended contract and the SLA, continuing configuration and interface work, and coordinating with the Legislature on any remaining statutory clarifications; the OLA recommended the agencies meet all success criteria and complete the SLA before preparing to launch. The committee adjourned without taking formal action.