Proposal for Minnesota state government watchdog agency gets bipartisan support
ST. PAUL, Minn. — Lawmakers across the political divide may not agree on much, but there is consensus building for one proposal in the Minnesota Legislature: Creating a new state office of inspector general to crack down on fraud in public programs.
During a Senate state government committee Tuesday, bipartisan backers of the legislation testified that a new watchdog agency within the executive branch — though not appointed or beholden to the governor — is imperative to protect taxpayer money, which fraudsters have stolen to the tune of hundreds of millions of dollars.
"The office of inspector general is more than catching fraud after it happens," said Sen. Heather Gustafson, DFL-Vadnais Heights. "It's about building on a culture of accountability and proactive oversight."
The problem came to a head after dozens were charged in the $250 million Feeding Our Future scheme; the former founder of the organization at the center of the case is on trial this week. More recently, federal investigators accused two autism centers of billing Medicaid for bogus claims. There have been other instances of mismanagement in state programs.
The new department would conduct inspections, evaluations and investigations of state agencies and programs to identify fraud, waste, abuse and inefficiencies in state government. From its findings, investigators would then refer cases for prosecution and provide recommendations to the legislature.
There would also be a tip line for the public to anonymously report problems.
Nine states have similar statewide offices of inspector general. There are several additional offices associated with specific agencies or local governments in those states and more, according to the Association of Inspectors General.
Minnesota has inspectors general in the Department of Corrections, Department of Education and Department of Health and Human Services. Under this plan, they'd all report to the new OIG.
A bipartisan panel of lawmakers would recommend candidates for the position of inspector general and the chief administrative law judge would ultimately choose who fills the job. It would be an executive-level department that the governor doesn't oversee.
"In my view, having inspectors general report to the head of the agency charged with administering the programs that are subject to attempts to defraud is structurally ineffective and destined to limit effectiveness," said Sen. Michael Kreun, R-Blaine, the Republican author of the bill.
There are several other ideas for anti-fraud proposals at the capitol this year, including boosting protections for whistleblowers who flag fraud and making sure agencies are following recommendations from the Office of Legislative Auditor, which has examined several state programs over the years.
The latter is widely praised for the accountability work it already does auditing Minnesota agencies and evaluating their internal controls. Sen. Mark Koran, R-North Branch, said he wants to ensure the legislative auditor's office continues that work and is distinct from the new office of inspector general.
He suggested the legislative auditor focuses on "pre-work" of making sure that agencies are complying with state law and are operating effectively, and then can refer cases to the OIG.
"I think both entities have to have a very clear delineation of roles and responsibilities," Koran said.
The new office would come at a cost to the state with additional full-time employees at a time when the state is staring down a potential $5 billion deficit in future years if the legislature doesn't act wisely with its budget-writing this year. Gustafson said she and Kreun are still awaiting a nonpartisan analysis about cost, but she envisions moving existing resources and positions elsewhere in state government into the new inspector general's office, which could cut down on additional spending to stand up the agency.
"We are very mindful of the budget and mindful of obviously being careful of using the resources that we have available," she said.
DFL Gov. Tim Walz also has his own ideas for anti-fraud measures, like increasing criminal penalties for people who defraud public programs and using artificial intelligence to flag potential problems early.
In the state House, there is a new committee with the specific task of looking into issues of fraud and providing government oversight of state programs.
