Minnesota Senate OKs new anti-fraud office, but much work remains

A proposal to create a new oversight office for state ruling body agencies passed with overwhelming bipartisan backing Thursday in the Minnesota Senate But with time dwindling in the legislative session it s unclear whether the bill will reach the governor this year or if he ll sign it Encouragement for a state Office of Inspector General has gained traction at the Legislature this session amid calls for greater oversight after the state lost hundreds of millions of dollars to pandemic-era fraud schemes In the Feeding Our Future controversy for instance prosecutors have alleged that a group of scammers used nonprofits to make off with about million from a federally funded school meals activity claiming reimbursements from the state for millions of meals never served A total of individuals have been charged in the episode with the ringleader discovered guilty earlier this year Aimee Bock founder and executive director of the nonprofit organization Feeding Our Future arrives at the Minneapolis federal courthouse with her attorney Ken Udoibok right on Wednesday March in Minneapolis Minn Kerem Y cel Minnesota Residents Radio via AP If the Senate bill becomes law a new state oversight office would be able to shut down payments when there is a credible suspicion of fraud and conduct an inspection The office would have subpoena powers and the Senate on Thursday adopted an amendment adding law enforcement capabilities The Democratic-Farmer-Labor-majority Senate passed its inspector general bill - with particular DFL holdouts concerned about how state fraud enforcement efforts might interfere with federal benefits like Medicaid They also had concerns about due process for organizations suspected of fraud Similar proposals exist in the tied House though they have not gained the same level of traction with just under two weeks remaining in the legislative session DFL Gov Tim Walz has announced he supports efforts to combat fraud though it s not absolutely clear where he stands on the Senate bill At an related Thursday bill signing he declared he s open to the idea but questioned whether it was the greater part efficient way to combat fraud Fraud a big issue this session Addressing governing body fraud has been a politically potent issue at the Capitol this year with Republicans and DFL lawmakers alike sponsoring bills to prevent future large-scale waste fraud and abuse in regime House Republicans created a new committee specifically aimed at highlighting and addressing the issue and have advanced several proposals aimed at fighting problems in the future Democrats say they ve already taken important action and that the perpetrators of Feeding Our Future and other schemes are being held accountable in court They point to a bill approving new oversight staff at state agencies and Walz s January executive order creating a fraud examination unit at the Minnesota Bureau of Criminal Apprehension That hasn t stopped a bipartisan push in the Senate to do more The lead sponsors on the Senate inspector general bill are Sen Heather Gustafson DFL-Vadnais Heights and Sen Michael Kreun R-Blaine They argue that while selected agencies have their own oversight offices Minnesota would benefit from an office insulated from politics with its own enforcement capabilities Right now governor-appointed commissioners appoint their agencies inspectors general We have already made notable strides in fighting fraud in Minnesota but the present day filled a gap that was desperately missing Gustafson described reporters at a press briefing following the vote We needed to be able to be more proactive For years we ve been able to do quite a bit of fraud prevention work but we are invariably still a little bit reactive Minnesota already has a nonpartisan Office of Legislative Auditor which conducts independent oversight investigations of state agencies and programs While its work is valuable to understanding problems in state cabinet it often identifies them after they ve occurred Gustafson mentioned A few Minnesota establishment agencies like the Department of Tuition have their own oversight personnel Under the bill they d be shifted to the central Office of Inspector General There d be about staff funded by just under million As part of a compromise the Department of Human Services would be the primary authority on probing Medicaid fraud Gustafson stated That came due to agency concerns about how a state fraud analysis might interfere with federal rules Backers say the new office would be insulated from politics by requiring a supermajority to confirm leadership and giving it its own enforcement powers Under the Senate bill an advisory panel composed of an equal number of DFL and GOP lawmakers would recommend a list of appointees to the governor Once the governor chooses someone to fill the position they would need to be verified by a three-fifths majority of the Senate Not ready for prime time While plenty of hailed the bill s passage as a bipartisan accomplishment holdouts commented they had concerns about due process in cases where the office decided to cut off funding for suspected fraud They also had concerns about how enforcement actions might interact with federal programs Sen John Hoffman DFL-Champlin declared state actions could lead to the Centers for Medicare and Medicaid Services interrupting funding for programs in Minnesota It s going to make headlines but you didn t do your due diligence he disclosed ahead of the vote Although it s a great front page of a newspaper article it s not ready for prime time Vote no The state Department of Human Services had raised concerns about this with lawmakers in the past and for Hoffman and others the bill in its present shape didn t do enough to address them I thought that things were clear that that we needed to be careful about how we grant a new entity authority over programs that affect vulnerable people in our state mentioned Sen Melissa Wiklund DFL-Bloomington the chair of the Senate Robustness and Human Services Committee Backers disclosed their amendments to the bill on Thursday addressed those concerns in part by requiring a federal response to the state before it proceeds with enforcement actions The Senate s inspector general bill is just one of several fraud-related measures moving through the Legislature this year Others include a GOP-backed proposal to create stricter reporting requirements for fraud in state agencies and new protections for whistleblowers The last day of session is May Related Articles Ethics panel deadlocks on complaint against Minnesota Senate President Letters Let s not make it harder to learn Walz wrote A private school principal responds Debate on unemployment benefits for school workers derails key MN budget piece St Paul MN Wild trim Xcel Center s state request from M to M Minnesota loosens distance exemption on state employee return to office order