Drazkowski, Senate GOP roll out comprehensive plan to hold government accountable to stop waste, fraud, and abuse of taxpayer dollars

Minnesota Senate Republicans today rolled out a comprehensive plan to hold government accountable to stop waste, fraud, and abuse of taxpayers’ dollars. The plan is part of the group’s Minnesotans First agenda for the 2025 legislative session.   

“It is startling to look at where we are as a state in terms of fraud,” Senator Steve Drazkowski (R-Mazeppa) said. “25 fraud scandals in six years. A governor that does nothing about it. It is simply an unacceptable culture of fraud here in our state. We need to develop a new institutional conscience that focuses on fraud avoidance, identification, and prompt fraud reporting within every inch of state government – something sorely lacking right now.” 

The eight bills in the fraud prevention package cover everything from empowering the nonpartisan Office of the Legislative Auditor to creating a state Office of Inspector General, a state grants administrator, a central grant system, increased oversight of grant recipients, and additional accountability, training, and whistleblower protections for state employees.  

Two of the bills are still being drafted by the revisor’s office and therefore do not have senate file numbers yet. 


OVERSIGHT 

Tackling fraud begins with better oversight of state employees and funding recipients.  

  • Stronger Penalties for State Employees (SF TBA) A centerpiece of the fraud prevention agenda is a bill from Sen. Drazkowski that increases penalties for state employees who fail or refuse to report suspected waste, fraud, or abuse as required by law. Payments must be temporarily halted when fraud is suspected. Current law requires employees to report fraud to the OLA, but the Feeding Our Future scandal was cited by the OLA as an example where state employees failed to do so.
  • If a commissioner fails to report fraud, the agency’s operating budget (salaries, expenses, benefits) will be frozen for two years. The bill aims to create a shared database of individuals and entities barred from receiving government payments, modeled after the federal “do not pay” list.
  • Whistleblower Protections (SF 475): The fraud prevent proposal would strengthen protections for state employees who report fraud, expanding who they can report to and addressing retaliation concerns. There are concerns, especially in the Department of Human Services, about retaliation against those trying to fight fraud from the inside. Current law has not been sufficient to protect them.
  • State OIG (SF TBA): The plan recommends creating a state Office of Inspector General (OIG) to oversee compliance, training, and fraud prevention policies across state government.  


TRANSPARENCY 

The fraud prevention package aims to improve transparency in state government.  

  • Restoring Transparency in the Attorney General’s Office (SF 730): The bill aims to reinstate public access to data on closed investigations involving non-individuals — information that was publicly available for over 40 years before a 2022 court ruling allowed the AG’s office to withhold it, severely limiting the public’s access to information on fraud cases being investigated, prosecuted, or settled. 
  • Holding Agencies Accountable for OLA Recommendations (SF 263): A proposed bill pushes House and Senate Committees to hold hearings where the OLA reviews agency compliance with its recommendations, ensuring action is taken to address fraud, waste, and abuse instead of being ignored. Too often, the OLA’s recommendations are met with no meaningful action by commissioners or agency staff. 


GRANT REFORM 

Finally, since much of the fraud in Minnesota has occurred through grants distributed by state agencies to nonprofits, there are three proposals to overhaul how this funding is managed.  

  • Statewide Grant Oversight and Fraud Prevention (SF 538): A bill proposes creating a Grant Administrator position and a centralized grants database to track and prevent fraud across multiple agencies. The bill would create a clearinghouse to determine if fraudulent actors are stealing or abusing funds in more than one agency. 
  • Reforming Grant Management Practices (SF 981): In response to a 2023 OLA report on widespread noncompliance in state grant administration, this bill enforces stricter financial audits for state-funded organizations, conflict-of-interest rules, and background checks to keep criminals out of grant-funded nonprofits. 
  • Strengthening Grant Compliance and Oversight (SF 1123): A proposed bill adds stricter oversight and compliance checks, including surprise site visits, financial reconciliation requirements, and the authority to withhold funds from noncompliant organizations.