Senator Nelson repeats calls for accountability, transparency following another new report of taxpayer program fraud

A new report from Minnesota’s Legislative Auditor has uncovered yet another example of significant fraud and mismanagement in a state’s COVID-19 pandemic program.

The audit of the Frontline Worker Pay program found that lax eligibility verification allowed rampant fraud, with an estimated 41% of payments going to ineligible applicants. Fraudsters exploited the program’s flaws, submitting multiple claims using fake identities and email addresses to dupe the system.

“I am grateful to the legislative auditor for continuing to shine a light on the widespread fraud being perpetrated across government programs,” Senator Carla Nelson (R-Rochester) said. “Minnesotans should really be livid at the blatant disregard and disrespect for their hard-earned tax dollars — especially as there continues to be no accountability or transparency from the governor or his administration. I will continue to propose common sense ways to strengthen oversight and accountability, as I have for years. I am hopeful that next year those ideas will get the bipartisan support needed.”

KEY FINDINGS OF THE REPORT:

• 40% of payments went to ineligible individuals or individuals that could not be verified.
• Claims were submitted using dummy email addresses to trick the application system.
• Inadequate verification procedures heavily relying on self-attestation, leading to numerous fraudulent claims for those not meeting in-person work requirements.
• Clear fraud indicators like high-risk bank accounts were ignored, resulting in substantial fraudulent payments.
• Critical failures in verifying income eligibility, retaining verification data, and maintaining consistent documentation across vendors and subcontractors.

The Frontline worker audit comes on the heels of the first Feeding our Future guilty verdicts, and a subsequent scathing report from the legislative auditor of the administration’s handling of the $250 million food program scandal. The Association of Certified Fraud Examiners in a 2022 report listed Feeding Our Future as one of its five worst fraud cases. Other recent Minnesota State Government fraud cases include $9.5 million in Medicaid fraud; multiple paycheck protection program fraud schemes; and widespread Childcare Assistance Fraud.

Senator Nelson offered a number of amendments in 2023 and 2024 aimed at preventing and addressing fraud of taxpayer-funded programs, but those amendments were rejected on party-line votes.