The amount of fraud running rampant through Minnesota’s state government is alarming. Between Covid relief, a blown $18 billion surplus, and $10 billion in tax increases that has led to a massive growth of government and spending, Minnesota taxpayers are facing a crisis. The House Fraud Prevention and State Oversight Policy Committee put in place by Speaker Lisa Demuth is a good first step toward shedding light on where all of this money is going.
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Republicans put fraud, measures to stop it in spotlight as they take Minnesota House reins
By Clay Masters
MPR News
Republicans are elevating their top issues with their temporary Minnesota House control no longer in question, putting a symbolic and strategic emphasis on a new committee’s mission to examine government fraud and proposals to stop it.
The newly formed House Fraud Prevention and State Oversight Policy Committee was a GOP requirement in the deal that brought Democrats back to the Capitol. It held its opening hearing Monday — the same day as the main figure in the Feeding Our Future case went on trial in an alleged nutrition aid fraud scheme unrivaled in scale.
“We are here to have serious conversations and get to the root of the fraud so that we can put systems in place that will stop it before it happens,” said the panel’s chair, Rep. Kristin Robbins of Maple Grove.
The committee is made up of five Republicans and three Democrats. Republicans will have control of it for the next two years regardless of who wins a special election next month that could make the chamber evenly divided again between the two major parties.
Members heard a presentation from Legislative Auditor Judy Randall, who was there to highlight what has been done so far by the Office of Grants Management to establish comprehensive policies for managing state-funded grants to nonprofit organizations.
Randall noted state agencies lack detailed policies and consistent compliance.
“I want to be clear that where it says not implemented isn’t like a shame and a point of the finger,” Randall told lawmakers. Instead, she said it was to consider gaps in current procedures. “Maybe this is an area for the Legislature to have additional questions and conversations.”
Robbins raised concerns about the kinds of training opportunities for agencies.
“What was stunning to me was that the training currently provided is for conflict of interest in monitoring, diversity equity, inclusion and grants administration but there were no training modules on how to detect fraud or compliance,” Robbins said.
Robbins asked Deputy Legislative Auditor Jodi Munson Rodriguez if lawmakers need to micromanage down to the level of saying fraud protection training must be implemented.
“They aren’t not complying on purpose, literally did not know. And so I do think that requiring a set kind of baseline so that everybody is starting with a certain set of information would be really helpful,” Munson Rodriguez responded.
Fraud in state agencies is nothing new but a number of recent discoveries of fraud — from abuse in the Medicaid program to questionable reimbursements to autism centers — has elevated the issue in just the last couple of years.
Just as the Capitol hearing started, so was a federal trial of Aimee Bock, the woman federal prosecutors say was the ringleader of a scheme to fleece taxpayer-funded child nutrition programs out of $250 million during COVID-19.
Feeding Our Future came up as a poster example of lax oversight during Monday’s hearing, but lawmakers mostly steered clear of the particulars of the case.
Members also talked about a need for better conflict of interest documentation and the effectiveness of progress reports.
“The first thing that strikes me is that it really feels like the next step here should be to hear from the Office of Grants Management,” said Rep. Steve Elkins, DFL-Bloomington. “I’m hoping we can do that as quickly as possible so that we can learn about, you know, what’s in progress, what’s already been done, what’s yet to be done.”
Robbins said she will ask that officials with the Office of Grant Management will come before the committee soon.
More House Republican bills aimed at combating lapses in spending or outright fraud are sprinkled across committee agendas all week.
DFL Gov. Tim Walz signed an executive order this year creating a state fraud investigations unit at the Bureau of Criminal Apprehension. He also proposed more money in his two-year budget for staff assigned to oversight roles within several state agencies.
Senate Democrats are also reviewing bills in the area, including one to create an independent Office of the Inspector General.
“We take it seriously. We don’t believe or support people stealing money from the government,” said Senate Majority Leader Erin Murphy, DFL-St. Paul. “We want people to have faith in the government.”
She noted the prosecutions in progress of people accused of illegally siphoning money from programs.
The inspector general bill is due for its first hearing on Tuesday in the Senate State and Local Government Committee.
Senate Republicans plan to discuss their own slate of anti-fraud bills on Wednesday.
