Four years after the Feeding Our Future scandal first rocked headlines, state lawmakers responded Monday by creating a new state agency focused exclusively on tackling fraud.
Gov. Tim Walz is expected to sign the bill creating a new Minnesota Office of Inspector General after both state legislative chambers passed the proposal. The House passed the measure last week, and the Senate advanced the bill Monday.
The bill will consolidate some existing inspector general positions in current state agencies into a separate, independent agency.
“This new office is going to be a major tool to create a culture of accountability here in Minnesota,” state Sen. Michael Kreun, R-Blaine, said shortly before the chamb bvfrdew321`er voted Monday. “This independent agency will be the watchdog of taxpayers. This bill is a seismic change in state government.”
Kreun co-authored the bill.
The bill, championed in the Senate by Sen. Heather Gustafson, DFL-Vadnais Heights, and in the House of Representatives by Rep. Matt Norris, DFL-Blaine, passed both chambers with near unanimous support.
Years of fraud scandals, starting with Feeding Our Future and continuing with federal probes into alleged fraud with autism service providers and daycare providers, prompted the new office’s creation.
Here’s what you need to know about the new state agency:
When will the Office of Inspector General be up and running?
While the office won’t be operational until late 2027, it will cost Minnesota taxpayers money starting this June as state employees work towards launching it.
What needs to happen before then?
First, state lawmakers must make recommendations for candidates to lead the office. The bill gives them the rest of the year to do that. Then, the governor will nominate a leader from the list of candidates.
How will the governor and state lawmakers find the state’s first inspector general?
That task will first fall on the Legislative Inspector General Advisory Commission, which will be composed of four state senators and four state representatives, picked by their respective majority and minority leaders. The commission will be split evenly between Republicans and Democrats.
The eight-member commission will have until Jan. 1, 2027, to come up with a list of candidates to lead the new agency, which will be sent to the governor. Candidates must receive votes from at least five commissioners to advance to the governor.
The governor must select someone from that list and appoint them by February 1, 2027. The Senate must then approve the governor’s pick by a vote of at least three-fifths of the chamber. The term for inspector general lasts five years.
State Rep. Patti Anderson, R-Forest Lake, another co-sponsor of the legislation, told reporters last week that she estimated that an inspector general would be actively working by February or March 2027.
What qualifications are required to be inspector general?
The inspector general must have an undergraduate college degree and 10 years of experience in “auditing, investigations, law enforcement, or a related area,” according to the legislation. The candidate must also be professionally certified by the Association of Inspectors General.
Those serving in state offices — including the governor, state legislators, state commissioners, agency heads and deputy agency heads — are barred from serving as inspector general until five years after ending their terms.
People elected to all other public offices can’t serve as Inspector General until 10 years after ending their terms.
How will the new office try to prevent fraud?
The office is charged with conducting “inspections, evaluations, and investigations” of state agencies to identify fraud by using professional accounting standards.
It will also publish findings of these investigations and make recommendations, including potentially referring findings for civil or criminal charges to its own in-house law enforcement agency. Each year, the inspector general will submit an annual report summarizing its work to the Legislative Inspector General Advisory Commission.
The office will maintain an anonymous tip line that is open to the public.
How many staffers will work under the new inspector general?
Lawmakers behind the legislation estimate that the Office of Inspector General will eventually employ around 40 full-time investigators. These include existing staffers in the state’s Department of Education, who will move over to the new office next year.
Hiring for the new staffers is expected to occur sometime next spring, shortly after the new Inspector General is installed into office.
A new law enforcement agency that is planned to open under the Office of Inspector General will require hiring additional employees separately from the 40 investigators.
The new agency will have its own law enforcement agency?
Yes. This was a major sticking point in securing Republican support for the bill. Democrats argued that the Minnesota Bureau of Criminal Apprehension (BCA) could provide the law enforcement personnel necessary to work with the Office of Inspector General on fraud cases.
Republicans said the new agency needed an independent law enforcement agency — one separate from control of the governor’s office. They cited the fact that fraud occurred under Walz’s administration, and the fact that the BCA is an agency under the governor’s control, for their reasoning.
Democrats, however, argued that creating a new law enforcement agency was a waste of resources.
“I think we should keep the law enforcement section separate from the investigative functions,” state Sen. John Marty, DFL-Roseville, said Monday shortly before voting for the bill. “I’m supporting the bill despite that deep concern, but I really don’t think we should be wasting money on creating a separate law enforcement agency.”
How will the law enforcement agency work?
Much of that is unknown as of now. The future inspector general will be tasked with deciding most of this, including how many licensed law enforcement officers to hire.
“We don’t have a set number for them,” Gustafson told reporters last week.
The new law enforcement agency will be called the Inspector General Anti-Fraud and Waste Bureau. It is expected to be up and running in January 2028, Anderson said. Until then, the Office of Inspector General will work with the Bureau of Criminal Apprehension for law enforcement needs.
How much will the Office of Inspector General cost taxpayers?
The bill’s authors estimate that the office will cost roughly $11 to $12 million a year.
The office’s first year, which starts this June and goes through June 2027, is estimated to cost between $3 to $6 million in its “launch phase,” Norris told reporters last week.
How will existing inspector generals in other state agencies be affected by the Office of Inspector General?
The state already employs inspector generals in several state agencies who investigate wrongdoing.
The inspector generals in the state Department of Human Services; Department of Health; and Department of Children, Youth and Families will remain in place with their own agency. They investigate fraud in Medicaid; the Women, Infants and Children (WIC) program; and child care assistance programs, respectively.
The new Office of Inspector General, however, is not barred from investigating fraud allegations in any of those agencies.
Employees from the Department of Education’s inspector general division will transfer over to the new Office of Inspector General before the beginning of 2027.
