Bipartisan bill to create independent inspector general moves toward final vote

A bill creating a new, independent Minnesota Office of Inspector General passed the Senate, cleared the House Ways and Means Committee and is now awaiting a floor vote.

The bipartisan bill, SF 856, was spearheaded by Sen. Heather Gustafson, DFL-Vadnais Heights, and Sen. Michael Kreun, R-Blaine.

Gustafson said the idea stemmed from “a fraud problem that we saw in Minnesota that really exposed that there was a gap in coverage in the investigation.”

She said that across agencies, some fraud is being caught but offices may lack the resources to address it or the ability to share findings with other agencies.

“As these cases started to pile up, it just became more and more apparent that we were missing out on a level of oversight that was needed,” she said.

The new office would serve as an independent oversight authority able to assist any agency with investigations, coordinate with the Bureau of Criminal Apprehension and the attorney general’s office, and provide a level of support that currently doesn’t exist, Gustafson said.

She emphasized that both private and public entities receiving taxpayer funds should be held accountable. The office would help by looking into fraud as well as technical errors and unintentional administrative mistakes. Regardless of intent, Gustafson said early detection is the goal.

The Minnesota Department of Human Services, which has its own Office of Inspector General, said it is supportive, noting that the governor’s supplemental budget includes a proposal to create a statewide OIG.

“However, proposals must be structured to ensure the state remains in compliance with federal regulations that require state Medicaid agencies to be administered by a single state agency and require state Medicaid agencies to conduct fraud investigations,” the department said in a statement to the Minnesota Spokesman-Recorder.

Resources remain a limiting factor in the agency’s capacity to prevent and detect fraud, according to DHS.

“DHS would benefit from more personnel, modernized technology and integrated data systems to fully monitor all activities at the level required to consistently prevent and identify fraud across programs,” the department said. “As a result, much of the work remains reactive rather than proactive.”

The department anticipates that the governor’s proposal, which includes funding for IT infrastructure and data sharing between the central OIG and state agencies, could improve the ability to detect fraudulent actors who have been excluded from programs administered by other state agencies.

Addressing concerns that expanded fraud investigations could perpetuate stereotypes or discrimination, Gustafson said Minnesota civil laws will still apply and any police force formed under the office would still be required to report to the Peace Officer Standards and Training Board.

“So there’s still a lot of monitoring there as well,” she said.

Any law enforcement operating within the office would be focused primarily on tasks such as reviewing files and detecting fraud, she said.

“It’s not about targeting people. It’s really about catching some of these things early, and obviously we want to stop people who are coming to our state on purpose to intentionally try and steal from us, and that is not unique to any one community.”

Gustafson pointed to Aimee Bock, founder and executive director of the Minnesota nonprofit Feeding Our Future, as an example of the kind of fraud the office is designed to catch. Bock was convicted of defrauding the Federal Child Nutrition Program of approximately $250 million by claiming to serve millions of meals to children during the COVID-19 pandemic while submitting fake attendance rosters and invoices.

“There are a lot of checks and balances in place and this is really about monitoring those programs in general, saying, ‘We are seeing something suspicious here. Do you have it under control? What are you doing about it? Please let us see what your investigations look like,'” Gustafson said. “But I completely understand the concern, especially with all of these federal government raids.”

The new OIG could cost $16 million to start, according to CBS. Gustafson said the state can afford it.

“We are losing millions and millions of dollars to fraud right now and that we can’t afford. So any dollar we spend to prevent it is going to pay for itself,” she said. “It’s more expensive for us to not do anything.”

Concerns raised in the House included the future of the Minnesota Department of Education’s Office of the Inspector General. Under the current plan, those investigators would be embedded within the new statewide office, Gustafson said. The bill also clarifies law enforcement protocols, requiring the OIG to partner with the Bureau of Criminal Apprehension during its first year before determining whether the office needs its own independent police force.

“I’m very happy that we were able to do this one with bipartisan support,” Gustafson said. “I think that was sort of important, just to be able to respond with a solution that really meets the moment and the size of the problem.”

The Minnesota Department of Health Services (DHS) informed MSR that it was not able to meet the deadline for comment.

Damenica Ellis welcomes reader responses at dellis@spokesman-recorder.com.