Latest news with #OfficeoftheLegislativeAuditor
Yahoo
27-03-2025
- Business
- Yahoo
Minnesota House fraud committee asks legislators to stop giving money directly to nonprofits
Chair of the House Fraud Prevention and State Agency Oversight Policy Committee Rep. Kristin Robbins, R-Maple Grove, spoke at a Capitol press conference on March 24, 2025. Photo by Michelle Griffith/Minnesota Reformer. A bipartisan group of Minnesota lawmakers from the House Ways and Means Committee and a fraud prevention committee asked their fellow legislators to refrain from earmarking funds directly to nonprofits without a competitive grant process this year. Legislators from both parties for years have been giving taxpayer funds directly to nonprofits to complete government work, such as preventing violence or providing food to needy families. State agencies typically award a grant to a nonprofit after performing background checks and analyzing numerous proposals, ultimately giving it to the applicant that best meets their criteria. But Minnesota lawmakers can also go around that competitive process and directly name a nonprofit, granting funds in a budget bill through what are known as legislatively named grants. Those grants have been fraught with problems over the years. The letter to budget-writing lawmakers requests they stop granting money to organizations through legislatively named grants as they draft budget bills for their respective committees in the weeks ahead. The Legislature must pass a two-year budget by June 30, though the Legislature is scheduled to adjourn May 19. 'When you appropriate funds to private entities, we urge you to strongly consider having agencies use a competitive process to select those entities, rather than directly naming them in law,' lawmakers wrote. Legislators are able to propose whatever bills they like, so there's little stopping them from continuing to name nonprofits in bills and granting them funds — other than asking them nicely like in the Wednesday letter. In 2023, the Democratic-Farmer-Labor-led Legislature approved over $1.1 billion in legislatively named grants to nonprofits, with some receiving more money from lawmakers than they normally get in other grants and donations in an entire year. According to a 2023 audit, Minnesota struggles to oversee money it sends out the door. The Office of the Legislative Auditor found 'pervasive noncompliance' with grant management policies, 'signaling issues with accountability and oversight' of the $500 million the state sends out in a typical year. Both competitive and legislatively named grants are supposed to go through the same type of oversight by state agencies, but the Office of the Legislative Auditor has found that agencies have failed to provide the same oversight of legislatively named grants that they do for competitive grants. The OLA has recommended lawmakers stop using legislatively named grants since 2007, or the year the first iPhone was released. Proponents of legislatively named grants say the practice allows smaller, less-established nonprofits an opportunity to receive state funding, as they may be disregarded in a competitive process. A competitive process can also be unnecessary if, for example, a nonprofit is the only organization in an area of Minnesota that provides a particular service, proponents say. 'Direct appropriations may be the best fit for some circumstances, such as where there is only one private entity that can meet the identified need,' the lawmakers wrote. 'But this should be the rare exception, rather than a general process. Additionally, the entity should be specified by name rather than using a session-law description for which only one entity could qualify.' Last year, Democratic lawmakers passed a bill requiring companies like Uber and Lyft to contract with a nonprofit advocacy organization to provide driver services. The bill appeared tailored to describe the Minnesota Uber/Lyft Drivers Association. The organization has been accused of fraud and deceptive trade practices by Uber and Lyft drivers.
Yahoo
12-02-2025
- Business
- Yahoo
Minnesota lawmakers seek to limit practice of legislators giving money directly to nonprofits
Minnesota State Capitol. Photo courtesy of Minnesota Senate Media Services. Some Minnesota lawmakers want to stop the practice of legislators giving money directly to nonprofits, concerned that it leads to uneven outcomes and lax oversight while favoring politically connected nonprofits. The move comes as Republicans highlight the fraud schemes that have plagued Minnesota state government in recent years, often through sham nonprofits that have managed to collect millions as Medicaid providers. The nascent House Fraud Prevention and State Agency Oversight Policy Committee met for the first time Monday and discussed the many ways state agencies are failing to adequately oversee grants to nonprofits. State government increasingly relies on nonprofits to complete its work, from preventing violence to providing food for needy families. State agencies typically award a grant after performing background checks and analyzing numerous proposals, ultimately giving it to the applicant that best meets their criteria. But lawmakers can also go around that competitive process and directly name a nonprofit, granting funds in a budget bill through what are known as legislatively named grants. In 2023, the Democratic-Farmer-Labor-led Legislature approved over $1.1 billion in legislatively named grants to nonprofits, with some receiving more money from lawmakers than they normally get in other grants and donations in an entire year. 'We all get requests from our constituents, or we have a relationship with a certain group that we know does fabulous work. I know it's hard for members, but I think we as a body have to police ourselves so that we put all grants through a competitive process,' said Rep. Kristin Robbins, R-Maple Grove, and chair of the House fraud committee. Robbins said reducing the grants will require a 'culture shift' at the Capitol. Lawmakers are able to propose whatever bills they like, so there's little stopping them from continuing to name nonprofits in bills and granting them funds. Ideally, Robbins said the Legislature should get rid of the practice of legislatively named grants, but she recognized that that would take time — and there's no mechanism to make lawmakers do it. According to a 2023 audit, Minnesota struggles to oversee money it sends out the door. The Office of the Legislative Auditor found 'pervasive noncompliance' with grant management policies, 'signaling issues with accountability and oversight' of the $500 million the state sends out in a typical year. Both competitive and legislatively named grants are supposed to go through the same type of oversight by state agencies, but the Office of the Legislative Auditor has found that agencies have failed to provide the same oversight of legislatively named grants that they do for competitive grants. The Department of Education, which was the pass-through agency for the stolen federal child nutrition funds in the massive so-called Feeding Our Future scheme, 'consistently documented less fiscal and programmatic oversight of legislatively named grants compared to competitively awarded grants,' according to the audit. Legislative Auditor Judy Randall on Monday told members of the House fraud committee that her office has recommended that the Legislature stop employing legislatively named grants since 2007, or the year the first iPhone was released. Marie Ellis, public policy director for the Minnesota Council of Nonprofits, said the vast majority of funding from the state to nonprofits is through the competitive process. But Ellis also said it can be unnecessary for a nonprofit to go through an onerous competitive process if, for example, they are the only organization in an area of Minnesota that provides that specific service. 'Sometimes directly named grants are the most efficient way to enact the Legislature's priorities,' Ellis said. 'If there's only one organization in the state that can do a certain thing that the Legislature wants done, a competitive process would be a sham and a waste of everyone's time.' In addition, smaller, less established nonprofits — especially those serving marginalized communities — can benefit from legislatively named grants, Ellis said. Robbins said that the legislatively named grants is a bipartisan concern, and legislative leaders and committee chairs will need to take the first steps to discourage the practice. 'It would take the commitment of chairs to say 'I'm not going to allow legislatively designated grants in my budget,' so a lot of it will fall on the individual members,' Robbins said.
CBS News
11-02-2025
- Politics
- CBS News
Trio of measures to fight fraud on the docket at Minnesota Legislature
ST. PAUL, Minn. — Fighting fraud will be front and center for lawmakers at the Minnesota State Capitol on Tuesday. Legislators will be taking up a trio of GOP-backed bills aimed at cracking down on criminals stealing hundreds of millions of your taxpayer dollars. Republicans unveiled these proposals weeks ago, but now that the House is in order, a proper committee can hear them. Here's a refresher on how lawmakers are hoping to protect your taxpayer dollars. One of the bills would create stricter reporting requirements if a state agency employee suspects fraud. Another proposal would establish a new annual report from the Office of the Legislative Auditor detailing if agencies have followed the office's recommendations to boost internal controls to help prevent fraud. A third proposal would boost protections for whistleblowers who expose fraud. The House state government committee is set to take up these bills at 8:15 a.m. At 12:30p.m., a Senate panel will hear a bipartisan proposal to establish a new Office of Inspector General to be the watchdog for state agencies. Also at 12:30 p.m., the Senate GOP is expected to share more details about their package of proposals to tackle fraud. The anti-fraud push at the capitol follows two recent high-profile cases of people stealing hundreds of millions from state programs intended to help children. Dozens were charged in the $250 million Feeding Our Future scheme and more recently, federal investigators accuse two autism centers of billing Medicaid for bogus claims.
