Minnesota State Senator Carla Nelson today announced the introduction of a critical new bill to increase transparency and accountability within Minnesota’s state grant programs. Her bill, Senate File 3158, comes in response to widespread fraud in state grant programs. A recent report by the Office of the Legislative Auditor found pervasive noncompliance by state agencies responsible for administering Minnesota’s state grants.

The most prominent recent example is the Feeding our Future fraud scandal, which so far has seen over $250 million in taxpayer funds intended to feed hungry children stolen. To date, 60 individuals have been charged in connection with the scandal, with more than $66 million in property, bank accounts, real estate, and vehicles seized by authorities.

“Fraud scandals like Feeding our Future are a stark reminder of the need for robust safeguards to protect taxpayer dollars,” Nelson said. “We have a duty to ensure that these funds are used to serve their intended purpose — improving the lives of Minnesotans who rely on these essential programs. We cannot allow a few bad actors to undermine the public trust in our state’s ability to be good stewards of their hard-earned money. The protections in SF-3158 are a significant step forward in restoring trust and integrity in our grant programs.”

The bill aims to bolster taxpayer protections for state grants awarded to nonprofit organizations by implementing the following guardrails:

• Adding eligibility requirements for grant applicants
• Requiring submission of proper tax forms
• Ensuring that no employee of the nonprofit organization earns more than the Governor’s salary each year
• Banning governing board members from simultaneously serving as state agency employees or state, county, or local elected officials=
• Instituting financial audit requirements for nonprofits that receive more than 50% of their revenue from state funds
• Mandating background checks to ensure board members have not been convicted of any theft, fraud, embezzlement, or misuse of funds or property

By increasing oversight and adding stronger safeguards, Senate File 3158 seeks to prevent future instances of fraud and misuse of taxpayer funds within Minnesota’s grant programs.