New Minnesota fraud watchdog would cost $15M to launch, analysis shows, as lawmakers debate plan
A proposal to create a new independent watchdog agency in Minnesota to crack down on fraud in public programs could cost nearly $16 million over the next few years for set-up alone, a fiscal analysis shows, the latest estimate as lawmakers continue to hash out disagreements ahead of session's end next month.
The Office of Inspector General plan cleared the state Senate last session with broad bipartisan support, but House Republicans and Democrats have been at odds over some provisions of the plan this year. The House Ways and Means Committee — the final stop before a floor vote — discussed the proposal Monday, but did not advance it as the bill authors continue to hammer out some of the sticking points, which include whether or not there should be a law enforcement division within the agency.
They said that the work of finding a compromise will continue in the coming weeks. The legislative session is set to end May 18.
"We have a few remaining sticking points that we're working diligently to resolve," Rep. Matt Norris, DFL-Blaine, said. "There's productive conversations happening between both the House and the Senate, DFLers and Republicans. This is a bill that is really important to the people of Minnesota. We want to make sure that it is effective, that it's ready to do the job on day one."
The $16 million price tag estimate from nonpartisan staff does not include additional funds that are expected to cover how other state agencies would work with the new office.
Rep. Ginny Klevorn, DFL-Plymouth, said she thinks the total cost across all of state government could be anywhere from $38 million to $60 million. It comes at a time when the state faces tight finances in the short term and long term; there could be a deficit next budget cycle if lawmakers are not careful.
"I think as we look at this fiscal note and as we look at the bill, we need to be really clear-eyed about what we're asking this agency to do, and I think we have to be really clear-eyed about the stomach that we have for truly funding this office," Klevorn said. "If we're going to do it, I want it to be done properly."
Some House Democrats think having a law enforcement division within the OIG is duplicative to the work that the Minnesota Bureau of Criminal Apprehension is already doing and the cost analysis shows it could be a $12.5 million appropriation on an ongoing basis, which Norris said is one of the remaining sticking points.
Rep. Patti Anderson, the lead Republican co-author working with Norris, said she thinks that figure is speculative based on an assumption that 30 new employees would be needed for that division when really fewer law enforcement officials and investigators are necessary.
"The law enforcement piece within the OIG is the norm across the country. That's how it's done, and it is key to this bill," she said.
Separately, the House on Monday approved other fraud-related bills unanimously, including one that would extend the statute of limitations for prosecuting Medicaid fraud and another that would make it easier to withhold payments to providers facing fraud allegations.
