End-of-Session Update

With each passing day, the likelihood of the Legislature passing the budget by our Constitutionally-mandated adjournment date of May 19th slowly diminishes. I continue to push for meeting the deadline as it causes a lot of unnecessary hardship and stress for state, county, school, and local government employees if we don’t.  They need to know what resources they are getting from the state so they can prepare for the start of the new fiscal year on July 1. 

If we don’t finish on time, the primary reason will be the late start to session. As you will recall, House Democrats didn't show up for session for the first 23 days, which has had huge ripple effects on the entire session. All of the bills we introduced in January had to be redrafted and reintroduced, and Committees had far fewer days for hearings and negotiations. Now, as I mentioned in the last newsletter, Democrats are going back on their signed agreement on the Education Bill, which means we haven’t passed one of the most critical areas of the budget with only seven days to go!    

While I will certainly keep pushing to end on time, it looks increasingly difficult. Many important bills still haven’t passed the House (Education and Taxes) and conference committees have not started in other areas. The mechanics of actually processing the bills is going to be challenging for our incredible non-partisan staff. If we don’t see real progress early this week, I am sad to say a Special Session seems increasingly likely.   

Last week marked the final hearing of the House Fraud and State Agency Oversight Committee for the 2025 session. While the hearing schedule has concluded, our mission is far from finished.  

Attorney General Keith Ellison made a brief appearance before referring questions about Medicaid fraud to the director of the state’s Medicaid Fraud Control Unit. That unit is responsible for identifying and recovering improper payments in our state’s $20 billion Medicaid program, but in the past five years, it has only recovered $53 million. Even at a conservative fraud estimate of just 1%, that’s $200 million in annual losses. This hearing made clear that we need stronger tools, greater coordination, and more proactive investigations to protect taxpayer dollars.  

We also highlighted the urgent need for better communication between state agencies and stronger IT infrastructure. Fraudsters often move from one agency’s programs to another, undetected, because there is no unified system to track or flag bad actors. This is one provision we included in HF 2891, discussed below. 

At this final hearing, the committee also had an informational hearing on two bills we introduced:  

• A bill to make kickbacks a state crime, giving prosecutors new tools to go after fraudulent schemes in both nonprofit and for-profit grant programs. This bill is stronger than the Governor’s kick-back language currently moving through the House which would not create a crime for kickbacks involving non-profits, only for-profit organizations. 

• A bill to require grant managers to be trained and certified, conduct site visits, and report fraud, while establishing a statewide list of suspended or debarred grantees. A key component of this bill is authorizing the Office of Grants Management to create and keep a list of grantees/service providers who have been suspended or debarred by one agency so they cannot get funding from other state agencies. 

I hope some of the language in these bills will eventually be included in the State Government Conference Committee bill. These bills are high priority and originated directly from the hearings we had throughout session where we identified gaps in statute, and heard from agencies about what they need to improve oversight.  

In addition to these two bills, we are still working on a bill that would establish an Independent Office of Inspector General. Currently, several agencies have an internal inspector general, but they answer directly to the commissioners leading to too many conflicts of interest. It is counterintuitive to allow those who oversee the programs where fraud has occurred investigate themselves. Even though this bill was held up by Democrats in the House, the Senate passed a similar version, and we are pushing to make sure it gets through Conference Committee. It’s received bipartisan support, and even commitment from the Governor to sign the bill if it passes.  

Although the Fraud Committee will not meet again this session, our work will continue in the months ahead. We will spend the interim conducting follow-up with state agencies, meeting with whistleblowers, and preparing additional proposals for 2026. We also hope to continue to have public hearings around the state. Fraud prevention is not a one-year effort. It requires long-term commitment and cultural change across state government.  

In the committee’s first year, we laid the groundwork for stronger accountability and smarter oversight in state government. Key highlights from our work include:  

• Uncovering repeated patterns of failure to prevent fraud across agencies through testimony from the Office of the Legislative Auditor (OLA), Office of Grants Management (OGM), DHS, and others.  

• Hearing directly from whistleblowers and frontline agency staff about how fraud is committed and concealed.  

• Identifying major vulnerabilities in the Medicaid system, including lack of oversight over behavioral health providers, housing services, and other “Medicaid expansion” programs. 

• Launching www.MNFRAUD.com, a public reporting portal that has already received 657 submissions, giving Minnesotans a direct line to report waste, fraud, and abuse.  

Thanks to the committee’s findings and leadership, several significant anti-fraud measures were included in this year’s omnibus bills. These provisions represent real progress in preventing fraud and holding agencies accountable:  

• HF 3043 makes kickbacks a crime under state law, closing a critical loophole for nonprofit grant schemes.  

• New whistleblower protections for public employees who report fraud, waste, or abuse.  

• Expanded background checks for car dealer licenses, removing the 10-year limit and including out-of-state records.  

• New licensing enforcement tools for DHS, allowing them to suspend providers under investigation and impose longer penalties for felony-level fraud.  

• Use of the MAXIS database by Veterans Affairs to verify eligibility and prevent benefit fraud.  

• Prohibition on grant payments to nonprofits that fail to file timely tax documents.  

• Greater access to program data for oversight offices to detect fraud in real time.  

• Additional investigators hired at the OLA to support ongoing fraud audits and reviews.  

• Required agency reporting of grant violations and organizational charts to increase transparency.  

These reforms reflect our commitment to making sure taxpayer dollars serve the needy, not the greedy.  We held a press conference to highlight these accomplishments and wins. You can see my clip here or watch the full presser here.