MN Legislature passes office of inspector general bill aimed at preventing fraud

ST. PAUL — The Minnesota House on Thursday, May 7, passed bipartisan legislation to create an independent office of inspector general to oversee the state’s public dollars and investigate allegations of fraud.

People have been convicted of bilking hundreds of millions of dollars from state-supervised safety net programs, and the widespread theft has garnered national attention, including from the Trump administration, which has deferred millions of Medicaid dollars because of fraud concerns. With the midterm elections coming in November, Republicans see the issue as one of their best to run on, while Democrats are anxious to show they’re taking action to combat the theft of public money.

The office of inspector general bill (SF 856) is a marquee fraud-prevention bill this legislative session, which ends on May 17 at 11:59 p.m. Other fraud measures being considered this session include a bill to tax money stolen through fraud; expanding the Minnesota Attorney General Office’s Medicaid Fraud Control Unit; and strengthening state agencies’ ability to stop payments when fraud is suspected.

“When it comes to fighting fraud there are no silver bullets. But this bill is a substantial step forward. It’s a step toward preventing fraud in the first place rather than just investigating it after the fact,” said Rep. Matt Norris, DFL-Blaine. “This office represents an unprecedented amount of fraud-fighting power in our state.”

The Minnesota Senate, where Democratic-Farmer-Labor members hold a one-seat majority, passed its own version last year. The Senate is expected to concur with the House’s changes. Gov. Tim Walz has said he supports the creation of an office of inspector general and proposed creating one in his 2026 budget proposal.

The inspector general would be appointed by the Minnesota governor, but a bipartisan group of legislators will vet and forward a slew of candidate recommendations from which the governor can choose. The inspector general, who will serve a five-year term, must be confirmed by a three-fifths majority vote in the Senate.

The office would be able to investigate any public or private entity that receives public dollars. It would also expand information-sharing between agencies and implement best anti-fraud practices for the agencies. The office of inspector general would also be required to submit regular reports to the Legislature.

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