1.1 A bill for an act
1.2 relating to state government; establishing a Commission on Government Efficiency
1.3 and Ethics to investigate allegations of fraud in state programs and undisclosed
1.4 legislative conflicts of interest; requiring a report; appropriating money; amending
1.5 Minnesota Statutes 2024, section 16B.98, subdivision 8; proposing coding for new
1.6 law in Minnesota Statutes, chapter 3.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. [3.99] COMMISSION ON GOVERNMENT EFFICIENCY AND ETHICS.
1.9 Subdivision 1.Creation.The Commission on Government Efficiency and Ethics is
1.10established to investigate allegations of fraud in state government and undisclosed conflicts
1.11of interest in the legislature.
1.12 Subd. 2.Membership.The commission consists of six members, three citizens appointed
1.13by the speaker of the house and three citizens appointed by the minority leader of the house
1.14of representatives, with the six citizen appointees approved as a slate by both the majority
1.15leader and minority leader of the senate. If the majority leader or minority leader of the
1.16senate rejects the slate, the speaker of the house and minority leader of the house of
1.17representatives must appoint a new slate for consideration. The speaker of the house and
1.18minority leader of the house must make appointments as soon as possible after the opening
1.19of the regular session of the legislature each odd-numbered year and must not appoint a
1.20current federal, state, or local elected official or a person who at any time was a candidate
1.21for partisan office.
1.22 Subd. 3.Terms.Members of the commission serve a two-year term beginning upon
1.23appointment and expiring upon appointment and approval of a successor after the opening
1Section 1.
REVISOR SGS/LJ 25-0453603/12/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2420
NINETY-FOURTH SESSION
Authored by Engen, Niska, Allen, Stier, Zeleznikar and others03/17/2025
The bill was read for the first time and referred to the Committee on State Government Finance and Policy 2.1of the next regular session of the legislature in the odd-numbered year. There is no term
2.2limit for commission members.
2.3 Subd. 4.Reporting; reward.(a) The commission must maintain a website and telephone
2.4hotline for any person to report, and to do so anonymously if the person so chooses:
2.5 (1) suspected fraud in a program funded fully or partially, or administered fully or
2.6partially, by the state; or
2.7 (2) an undisclosed conflict of interest by a member of the house of representatives or
2.8senate.
2.9 (b) The commission may award up to $5,000 to any person whose report results in a
2.10criminal conviction, successful civil action, or the expulsion of a member of the house of
2.11representative or senate.
2.12 (c) For purposes of this section, "undisclosed conflict of interest" means voting on a
2.13question when the member has an immediate financial interest in the question without first
2.14disclosing the conflict as required under the rules of the house of representatives for members
2.15of the house, or the rules of the senate for members of the senate.
2.16 Subd. 5.Investigations; private investigator; cooperation required.(a) Any member
2.17of the commission may order an investigation based on a report or tip received by the
2.18commission or a commission member under subdivision 4 or otherwise.
2.19 (b) The commission must contract with a private investigator to perform an investigation
2.20under this subdivision.
2.21 (c) All public officials and their deputies and employees and all corporations, firms, and
2.22individuals having business involving the receipt, disbursement, or custody of public funds
2.23shall at all times:
2.24 (1) afford reasonable facilities for examinations by an investigator performing an
2.25investigation ordered by the commission;
2.26 (2) provide returns and reports required by the investigator;
2.27 (3) attend and answer under oath the investigator's lawful inquiries;
2.28 (4) produce and exhibit all books, accounts, documents, and property that the investigator
2.29requests to inspect; and
2.30 (5) in all things cooperate with the investigator.
2Section 1.
REVISOR SGS/LJ 25-0453603/12/25 3.1 Subd. 6.Forensic audits.A member of the commission may order a full forensic audit
3.2of any state agency or grantee named by the legislature. The commission must contract with
3.3a private entity to conduct the audit. For purposes of this subdivision, "forensic audit" means
3.4a systematic evaluation of the effectiveness of the grantee's internal controls over programs,
3.5processes, receipts, and expenditures to identify ineffective controls and vulnerabilities and
3.6to expose fraud, waste, and abuse.
3.7 Subd. 7.Reporting required.(a) If an investigation or forensic audit documents credible
3.8evidence of fraud, the commission must report to the appropriate law enforcement entity,
3.9the chair and ranking minority member of the Committee on Rules and Legislative
3.10Administration in the house of representatives, and the chair and ranking minority member
3.11of the Committee on Rules and Administration in the senate.
3.12 (b) If an investigation documents credible evidence of an undisclosed conflict of interest,
3.13the commission must issue a public report and submit this report to the chair and ranking
3.14minority member of the Committee on Rules and Legislative Administration in the house
3.15of representatives for an investigation concerning a member of the house of representatives,
3.16or the chair and ranking minority member of the Committee on Rules and Administration
3.17in the senate for an investigation concerning a member of the senate.
3.18 (c) At least annually, the commission must submit a report to the chair and ranking
3.19minority member of the Committee on Rules and Legislative Administration in the house
3.20of representatives and the chair and ranking minority member of the Committee on Rules
3.21and Administration in the senate with recommendations concerning the prevention of fraud
3.22in state programs and undisclosed conflicts of interest in the legislature.
3.23 Subd. 8.Meetings; officers.(a) The open meeting requirements of section 3.055 apply
3.24to meetings of the Commission on Government Efficiency and Ethics, except the commission
3.25may conduct a closed meeting when discussing a report received under subdivision 4, an
3.26active investigation ordered under subdivision 5, or a forensic audit ordered under subdivision
3.276. A meeting is not required for a member of the commission to order an investigation under
3.28subdivision 5 or a forensic audit under subdivision 6.
3.29 (b) The commission members must elect a chair and vice-chair, and other officers from
3.30its membership as it deems necessary.
3.31 Subd. 9.Staff support.The executive director of the Legislative Coordinating
3.32Commission must provide administrative support for the Commission on Government
3.33Efficiency and Ethics under section 3.305, subdivision 4.
3Section 1.
REVISOR SGS/LJ 25-0453603/12/25 4.1 Subd. 10.Compensation.Members serve without compensation but, if approved by
4.2the chair, may be reimbursed for their reasonable expenses in the same manner and amount
4.3as authorized by the commissioner's plan adopted under section 43A.18, subdivision 2.
4.4 Sec. 2. Minnesota Statutes 2024, section 16B.98, subdivision 8, is amended to read:
4.5 Subd. 8.Audit.(a) A grant agreement made by an executive agency must include an
4.6audit clause that provides that the books, records, documents, and accounting procedures
4.7and practices of the grantee or other party that are relevant to the grant or transaction are
4.8subject to examination by the commissioner, the granting agency, private investigators
4.9under contract with the Commission on Government Efficiency and Ethics, and either the
4.10legislative auditor or the state auditor, as appropriate, for a minimum of six years from the
4.11grant agreement end date, receipt and approval of all final reports, or the required period
4.12of time to satisfy all state and program retention requirements, whichever is later. If a grant
4.13agreement does not include an express audit clause, the audit authority under this subdivision
4.14is implied.
4.15 (b) If the granting agency is a local unit of government, and the governing body of the
4.16local unit of government requests that the state auditor examine the books, records,
4.17documents, and accounting procedures and practices of the grantee or other party according
4.18to this subdivision, the granting agency shall be liable for the cost of the examination. If
4.19the granting agency is a local unit of government, and the grantee or other party requests
4.20that the state auditor examine all books, records, documents, and accounting procedures
4.21and practices related to the grant, the grantee or other party that requested the examination
4.22shall be liable for the cost of the examination.
4.23 (c) A grant agreement between an executive agency and a grantee named by the legislature
4.24must include a forensic audit clause requiring the grantee to fully cooperate with an
4.25investigation or forensic audit ordered by a member of the Commission on Government
4.26Efficiency and Ethics.
4.27 Sec. 3. APPROPRIATION; COMMISSION ON GOVERNMENT EFFICIENCY
4.28AND ETHICS.
4.29 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
4.30fund to the executive director of the Legislative Coordinating Commission for purposes of
4.31the Commission on Government Efficiency and Ethics.
4Sec. 3.
REVISOR SGS/LJ 25-0453603/12/25