23-05-2025
New Minnesota Office of Inspector General 'dead' at the state capitol this year and won't clear special session, leaders say
A bipartisan effort to establish a new state watchdog agency to crack down on fraud in public programs won't advance this year, former DFL House Speaker Melissa Hortman said Friday.
Establishing an Office of Inspector General (OIG) is not part of the budget framework that will set the parameters of what the Legislature will pass in the looming special session, she explained, citing the $18 million cost over four years at a time when the Legislature is trying to stave off a $6 billion deficit in the future.
"It is dead," Hortman said.
The measure cleared the Senate earlier this month with broad bipartisan support. It would have created a new independent agency charged with investigating state agencies and private organizations that receive taxpayer money in wake of high-profile fraud scandals, like the Feeding Our Future scheme, that have plagued Minnesota in recent years. She said the measure also had bipartisan pushback.
"The problem with having a totally separate division on that is who is their boss and how do we know that that's actually going to result in more fraud being caught," Hortman told reporters. "So I think the existing system we have is both affordable and substantially beefed up from the 2023 session."
She noted that two years ago, the Legislature strengthened the oversight of the Office of Grants Management, which reviews state dollars that go to third parties. There are also a number of other anti-fraud measures in the state government and elections finance bill that passed Monday and more provisions should follow in the human services budget when lawmakers return sometimes next week for special session.
Among the changes already approved are stronger protections for whistleblowers who report fraud and giving agencies the power to withhold payments for 60 days if an entity receiving the money is suspected of fraud.
Meanwhile, the House GOP unsuccessfully tried a procedural move before adjournment Monday to force a vote on the Senate bill establishing the new agency.
"It was really frustrating because it had passed the Senate. It wasn't part of the [leadership] deal, but looking at the amount of fraud that is in the state of Minnesota and trying to attack that and prevent it from going forward—I think you're going to hear continued concerns going forward," Demuth explained
Republicans will still lead a new fraud prevention committee during the 2026 session, when lawmakers could also revisit the OIG proposal again if they'd like.
"We weren't concerned as much with the money. We thought it was a wise investment of tax dollars to get it done—work that needed to be done," Demuth said.
