Sen. Abeler's Capitol Update - Fraud, Accountability, and Your Tax Dollars

Dear Friends and Neighbors,

Minnesotans are right to be frustrated about fraud in state programs, and the latest report from the Office of the Legislative Auditor explains why. The audit found serious failures inside the Department of Human Services’ Behavioral Health Administration, including weak oversight, missing financial controls, and documentation created after an audit began. More than $425 million in grants were distributed with little proof that services were delivered or that taxpayer dollars were protected.

This is not a new problem, and it has not been ignored. We have been pressing them since before 2017, holding hearings and cracking down on fraud with more oversight through legislation. Years ago, whistleblowers warned that fraud was widespread in Minnesota’s human services programs. In 2018, when I chaired the Human Services Reform Committee, a whistleblower told legislators that the Child Care Assistance Program was experiencing about $100 million a year in fraud. DHS acknowledged that fraud existed but admitted it did not know the right number. Despite all of this, we have received nothing but pushback from both former Governor Mark Dayton and Governor Walz, both refusing to implement safeguards in their agencies or fire anyone responsible for mismanagement.

That same issue was recently highlighted in a Star Tribune op-ed by former Legislative Auditor Jim Nobles titled “Minnesota fraud: What is the ‘right’ number?” Nobles made it clear that when agencies fail to track, verify, and enforce the law, fraud becomes impossible to measure and easy to ignore.

The Minnesota Legislature has passed safeguards and oversight requirements, and the Office of the Legislative Auditor has done its job. What is missing is follow-through by the Executive Branch. When the law is not implemented, fraud flourishes. At this point, real accountability may only come through the courts.

Minnesotans want to help people in real need, not those motivated by greed. Restoring trust will require enforcement, accountability, and consequences.

Sincerely,

Senator Jim Abeler

Minnesota Senate, District 25

Q: Why hasn’t a state wide audit been performed?

Q: Why hasn’t an audit been performed?

Audits have been performed. The Office of the Legislative Auditor, which is independent of the Governor and DHS, regularly audits state agencies, evaluates public programs, and investigates misuse of public money. The OLA conducts:

  • Annual financial audits of the state and pension systems
  • Five to seven program evaluations each year selected by lawmakers
  • Special reviews when concerns are raised by legislators or the public

Here are several of the most important DHS-related fraud audits and investigations:

These reports show that fraud has been identified repeatedly. The problem has not been a lack of audits. The problem has been a lack of action by the Executive Branch after the audits were issued.

Q: How do I get a refund for all this fraud?

Recovering stolen money happens through the criminal justice system. When fraudsters are convicted, judges order restitution as part of sentencing. Federal prosecutors then seize and forfeit assets to repay taxpayers.

There have already been some recoveries. In the Feeding Our Future case, courts have ordered more than $5 million in restitution so far. However, much of the money was spent or moved overseas, including on real estate and luxury goods, which makes recovery difficult or impossible.

The U.S. Attorney’s Office is responsible for asset seizures and forfeiture. Federal officials, including Treasury Secretary Scott Bessent, are working to trace money that was moved outside the United States, since state agencies do not have that authority.

The hard truth is this: some money will be recovered, but much of what was stolen is gone. That is why prevention, oversight, and enforcement before the money goes out the door is so important.

Q) What do I do if I suspect fraud?

If you suspect fraud in a Minnesota human services or federally funded program, you should report it directly to the agencies responsible for investigation and enforcement. Reports can be made in several ways:

Minnesota Department of Human Services Office of Inspector General
Report online: https://mn.gov/dhs/general-public/office-of-inspector-general/report-fraud/
Minnesota Fraud Hotline: 1-800-627-9977

Minnesota Office of the Legislative Auditor
Concerns about misuse of public funds or program failures can be submitted at:
https://www.auditor.leg.state.mn.us/reporting.htm

Federal Bureau of Investigation (FBI)
For large-scale fraud, including Medicaid, SNAP, housing, or other federal programs:
Online tip form (preferred for non-emergencies): https://www.fbi.gov/contact-us
National tip line: 1-800-CALL-FBI (225-5324)
You may also contact your local FBI field office.

Government Accountability Office (GAO) FraudNet
For fraud, waste, abuse, or mismanagement of federal funds:
Report online or call 1-800-424-5454

Federal Agency Inspectors General
Most federal agencies have an Office of Inspector General (OIG) that investigates fraud within their programs. A directory of all federal OIG offices is available through the Council of the Inspectors General on Integrity and Efficiency (CIGIE): https://www.ignet.gov/

If you are uncomfortable reporting on your own, you may also contact my office, and we will help make sure the information gets to the appropriate authorities.

Fraud hurts the people who truly need help and steals from taxpayers. Reporting it is one of the most important ways Minnesotans can protect both.