Minnesota 2025-2026 Regular Session

Minnesota House Bill HF2963 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to state government; establishing an Office of Inspector General; providing
3	3	1.3 powers and duties; providing enhanced grant oversight; prohibiting retaliation;
4	4	1.4 transferring or repealing existing executive Offices of Inspector General; providing
5	5	1.5 detection and prevention of fraud; providing penalties; making conforming changes;
6	6	1.6 requiring reports; appropriating money; amending Minnesota Statutes 2024, sections
7	7	1.7 3.855, subdivision 3; 3.97, subdivision 1, by adding subdivisions; 3.971,
8	8	1.8 subdivisions 1, 9; 16B.97, subdivisions 2, 4; 16B.98, subdivisions 4, 8, 14; 16B.991,
9	9	1.9 subdivision 1; 142B.53; 245A.24; 268.19, subdivision 1; 268B.30; 609.456,
10	10	1.10 subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 3;
11	11	1.11 15; repealing Minnesota Statutes 2024, sections 13.321, subdivision 12; 127A.21.
12	12	1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
13	13	1.13 ARTICLE 1
14	14	1.14 OFFICE OF THE INSPECTOR GENERAL
15	15	1.15 Section 1. Minnesota Statutes 2024, section 3.97, subdivision 1, is amended to read:
16	16	1.16 Subdivision 1.Policy.Continuous legislative review of the spending of public funds
17	17	1.17and financing at all levels of government is required in the public interest to enable the
18	18	1.18enactment of appropriate legislation. Fraud, misuse, and other unlawful uses of public funds
19	19	1.19are unacceptable and must be prevented. If fraud, misuse, or other unlawful use of public
20	20	1.20funds occurs, it must be promptly identified and prosecuted to the fullest extent of the law.
21	21	1.21 Sec. 2. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
22	22	1.22 Subd. 3c.Complementary.The commission must ensure that the work of the inspector
23	23	1.23general is complementary to, and not duplicative of, that of the legislative auditor.
24	24	1Article 1 Sec. 2.
25	25	REVISOR SGS/EN 25-0525703/26/25
26	26	State of Minnesota
27	27	This Document can be made available
28	28	in alternative formats upon request
29	29	HOUSE OF REPRESENTATIVES
30	30	H. F. No. 2963
31	31	NINETY-FOURTH SESSION
32	32	Authored by Anderson, P. E.,04/01/2025
33	33	The bill was read for the first time and referred to the Committee on Human Services Finance and Policy 2.1 Sec. 3. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
34	34	2.2 Subd. 3d.Executive secretaries.The legislative auditor and the inspector general are
35	35	2.3the executive secretaries of the commission.
36	36	2.4 Sec. 4. Minnesota Statutes 2024, section 3.971, subdivision 1, is amended to read:
37	37	2.5 Subdivision 1.Appointment and term.The legislative auditor is the executive secretary
38	38	2.6of the commission. The legislative auditor shall be appointed by the commission for a
39	39	2.7six-year term and serve in the unclassified service. When in office, the legislative auditor
40	40	2.8may not at any time hold any other public office. The legislative auditor may not be removed
41	41	2.9from office before the expiration of the term of service except for cause after public hearing.
42	42	2.10 Sec. 5. Minnesota Statutes 2024, section 3.971, subdivision 9, is amended to read:
43	43	2.11 Subd. 9.Obligation to notify the legislative auditor.The chief executive, financial,
44	44	2.12or information officers of an organization subject to audit under this section must promptly
45	45	2.13notify the legislative auditor when the officer obtains information indicating that (1) public
46	46	2.14money or other public resources may have been used for an unlawful purpose, or when the
47	47	2.15officer obtains information indicating that (2) government data classified by chapter 13 as
48	48	2.16not public may have been accessed by or provided to a person without lawful authorization.
49	49	2.17The legislative auditor must notify and coordinate with the inspector general when the
50	50	2.18legislative auditor receives a credible notification under clause (1) that is within the inspector
51	51	2.19general's authority. As necessary, the legislative auditor shall coordinate an investigation
52	52	2.20of the allegation with appropriate law enforcement officials.
53	53	2.21 Sec. 6. [3.99] DEFINITIONS.
54	54	2.22 Subdivision 1.Application.For purposes of sections 3.991 to 3.998, the following terms
55	55	2.23have the meanings given.
56	56	2.24 Subd. 2.Agency."Agency" means any entity subject to audit under section 3.971,
57	57	2.25subdivision 6, or section 3.972, subdivision 2.
58	58	2.26 Subd. 3.Fraud."Fraud" means an intentional or deceptive act, or failure to act, to gain
59	59	2.27an unlawful benefit.
60	60	2.28 Subd. 4.Inspector general."Inspector general" means the person appointed under
61	61	2.29section 3.991 or an employee of the office designated by the inspector general.
62	62	2.30 Subd. 5.Investigation."Investigation" means a proceeding or inquiry by the office
63	63	2.31concerning a provider or recipient of state-funded services.
64	64	2Article 1 Sec. 6.
65	65	REVISOR SGS/EN 25-0525703/26/25 3.1 Subd. 6.Misuse."Misuse" means the improper use of authority or position for personal
66	66	3.2gain or to cause harm to others, including the improper use of public resources or programs
67	67	3.3contrary to their intended purpose.
68	68	3.4 Subd. 7.Office."Office" means the Office of the Inspector General.
69	69	3.5 Subd. 8.Personal gain."Personal gain" means a benefit to a person; a person's spouse,
70	70	3.6parent, child, or other legal dependent; or an in-law of the person or the person's child.
71	71	3.7 Subd. 9.Program."Program" or "state program" means any program fully or partially
72	72	3.8administered or fully or partially funded by the state.
73	73	3.9 Subd. 10.Recipient of state funds."Recipient of state funds" means any entity or
74	74	3.10person, including associated persons, that receives, disburses, or has custody of funds or
75	75	3.11other resources transferred or disbursed under a program. Recipient of state funds includes
76	76	3.12but is not limited to a private person or entity currently or formerly under contract with the
77	77	3.13state to provide benefits, goods, or services to eligible recipients.
78	78	3.14 Sec. 7. [3.991] OFFICE OF THE INSPECTOR GENERAL.
79	79	3.15 Subdivision 1.Establishment.The Office of the Inspector General is established in the
80	80	3.16legislative branch under the direction of the inspector general. The inspector general reports
81	81	3.17to the Legislative Audit Commission but may independently initiate investigations and
82	82	3.18allocate the resources of the office to effectively achieve the purpose in subdivision 2.
83	83	3.19 Subd. 2.Purpose.The inspector general must investigate and combat suspected fraud,
84	84	3.20misuse, and other unlawful uses of public funds in state government with a focus on the
85	85	3.21providers and recipients of state-funded services.
86	86	3.22 Subd. 3.Inspector general appointment; term.(a) The Legislative Audit Commission
87	87	3.23must appoint an inspector general to serve for a six-year term. When in office, the inspector
88	88	3.24general may not at any time hold another public office. The commission may not remove
89	89	3.25an inspector general from office before the expiration of the term of service except for cause
90	90	3.26after public hearing.
91	91	3.27 Subd. 4.Qualifications.The commission must select an inspector general without regard
92	92	3.28to political affiliation and on the basis of outstanding professional qualifications and
93	93	3.29demonstrated integrity, leadership, and ability in accounting, auditing, financial analysis,
94	94	3.30law, management analysis, public administration, investigation, criminal justice, or a related
95	95	3.31field. The inspector general must hold at the time of appointment, or be required by the
96	96	3.32commission to obtain within a time certain after appointment, certification from the
97	97	3.33Association of Inspectors General.
98	98	3Article 1 Sec. 7.
99	99	REVISOR SGS/EN 25-0525703/26/25 4.1 Subd. 5.Conflicts of interest; code of ethics.The inspector general, deputy inspector
100	100	4.2general, assistant inspectors general, and all other employees of the office are public officials
101	101	4.3for purposes of the conflict of interest and statement of economic interest requirements in
102	102	4.4chapter 10A and are subject to the code of ethics in section 43A.38 where applicable.
103	103	4.5 Subd. 6.Staff; compensation.(a) The inspector general must appoint a deputy inspector
104	104	4.6general, with the approval of the commission, for a term coterminous with the inspector
105	105	4.7general's term. The deputy inspector general may be removed by the commission or the
106	106	4.8inspector general before the expiration of the deputy's term only for cause. The inspector
107	107	4.9general and deputy inspector general may each appoint an administrative support specialist
108	108	4.10to serve at pleasure. The deputy inspector general may perform and exercise the powers,
109	109	4.11duties, and responsibilities imposed by law on the inspector general when authorized by
110	110	4.12the inspector general.
111	111	4.13 (b) The inspector general must hire assistant inspectors general and other staff as required,
112	112	4.14in the inspector general's estimation, to administer sections 3.991 to 3.998 and other relevant
113	113	4.15law.
114	114	4.16 (c) The salaries and benefits of the inspector general, deputy inspector general,
115	115	4.17administrative support specialists, assistant inspectors general, and other staff must be
116	116	4.18determined by a compensation plan approved by the Legislative Coordinating Commission.
117	117	4.19 (d) The inspector general, deputy inspector general, and their administrative support
118	118	4.20specialists serve in the unclassified service. All other employees of the office serve in the
119	119	4.21classified service.
120	120	4.22 (e) Notwithstanding section 43A.32, subdivision 3, or any other law to the contrary, an
121	121	4.23employee of the Office of the Inspector General is prohibited from being a candidate for a
122	122	4.24partisan elected public office.
123	123	4.25 Sec. 8. [3.992] DUTIES.
124	124	4.26 The inspector general must:
125	125	4.27 (1) provide general direction and leadership for the office and its staff;
126	126	4.28 (2) physically embed assistant inspectors general, and other staff as determined by the
127	127	4.29inspector general, within the Departments of Children, Youth, and Families; Corrections;
128	128	4.30Education; Employment and Economic Development; Health; Human Services; and Labor
129	129	4.31and Industry;
130	130	4Article 1 Sec. 8.
131	131	REVISOR SGS/EN 25-0525703/26/25 5.1 (3) develop and maintain a website and telephone hotline for state agency staff and the
132	132	5.2public to report suspected fraud, misuse, or other unlawful use of public funds in state
133	133	5.3programs, and to do so anonymously if they so choose;
134	134	5.4 (4) establish policies and procedures for evaluating and consistently responding to each
135	135	5.5tip received under clause (3);
136	136	5.6 (5) notify and coordinate with the legislative auditor when the inspector general receives
137	137	5.7a credible report of suspected fraud, misuse, or other unlawful use of public funds that is
138	138	5.8within the legislative auditor's authority;
139	139	5.9 (6) establish and maintain policies and procedures for conducting investigations;
140	140	5.10 (7) report suspected fraud, misuse, or other unlawful use of public funds to the appropriate
141	141	5.11law enforcement entity and cooperate with law enforcement to assist any investigation and
142	142	5.12subsequent civil or criminal prosecution;
143	143	5.13 (8) perform enhanced legislative oversight of state grantmaking as provided in section
144	144	5.143.994; and
145	145	5.15 (9) exercise the powers under section 3.993 and all other powers reasonably necessary
146	146	5.16to implement and administer sections 3.991 to 3.998 and other applicable law.
147	147	5.17The inspector general must submit policies to the Legislative Audit Commission for review
148	148	5.18at least 30 days prior to adoption or substantial revision. Procedures developed by the
149	149	5.19inspector general under clauses (4) and (6) are nonpublic data.
150	150	5.20 Sec. 9. [3.993] POWERS.
151	151	5.21 Notwithstanding any law to the contrary, the inspector general may exercise the following
152	152	5.22powers as necessary to conduct investigations and achieve the purpose of sections 3.991 to
153	153	5.233.998:
154	154	5.24 (1) subpoena witnesses, administer oaths or affirmations, take testimony, and compel
155	155	5.25the production of the data specified under section 3.997 as the inspector general deems
156	156	5.26necessary for purposes of an investigation;
157	157	5.27 (2) recommend that the commissioner of administration for state grants, or the
158	158	5.28commissioner of management and budget for all other state funds, impose, in consultation
159	159	5.29with law enforcement, appropriate temporary sanctions including the withholding of payment
160	160	5.30to a recipient of state funds, if:
161	161	5.31 (i) the inspector general determines there is credible indicia of fraud, misuse, or other
162	162	5.32unlawful use of public funds by the recipient;
163	163	5Article 1 Sec. 9.
164	164	REVISOR SGS/EN 25-0525703/26/25 6.1 (ii) there was a criminal, civil, or administrative adjudication of fraud, misuse, or other
165	165	6.2unlawful use of public funds against the recipient in Minnesota or in another state or
166	166	6.3jurisdiction;
167	167	6.4 (iii) the recipient was receiving funds under any contract or registered in any program
168	168	6.5administered by another Minnesota state agency, a government agency in another state, or
169	169	6.6a federal agency, and was under investigation or excluded from that contract or program
170	170	6.7for reasons credibly indicating fraud, misuse, or other unlawful use of public funds by the
171	171	6.8recipient; or
172	172	6.9 (iv) the recipient demonstrates a pattern of noncompliance with an investigation.
173	173	6.10When the inspector general makes a recommendation under this clause, the inspector general
174	174	6.11must immediately notify the Legislative Audit Commission;
175	175	6.12 (3) recommend actions to be taken by an agency to prevent fraud, misuse, and other
176	176	6.13unlawful uses of public funds;
177	177	6.14 (4) require agencies to provide suitable office space and facilities access for inspector
178	178	6.15general staff physically embedded within the agency; and
179	179	6.16 (5) monitor the implementation of requirements and recommendations issued by the
180	180	6.17office.
181	181	6.18 Sec. 10. [3.994] ENHANCED OVERSIGHT OF STATE GRANTMAKING.
182	182	6.19 The inspector general must provide enhanced legislative oversight of state grantmaking,
183	183	6.20including but not limited to:
184	184	6.21 (1) monitoring the commissioner of administration's development and implementation
185	185	6.22of policies under sections 16B.97 to 16B.991, and providing formal recommendations to
186	186	6.23the commissioner of administration and the Legislative Audit Commission;
187	187	6.24 (2) monitoring the commissioner of administration's suspension or debarment of grantees
188	188	6.25under section 16B.97, subdivision 3, clause (6), and recommending to the commissioner
189	189	6.26the suspension or debarment of specific grantees as necessary, in the inspector general's
190	190	6.27judgment, to prevent or minimize fraud, misuse, and other unlawful uses of public funds.
191	191	6.28When the inspector general makes a recommendation to the commissioner of administration
192	192	6.29under this clause, the inspector general must immediately report to the Legislative Audit
193	193	6.30Commission;
194	194	6.31 (3) monitoring the commissioner of administration's receipt and disposition of comments
195	195	6.32under section 16B.97, subdivision 4, clause (6), concerning alleged state agency violations
196	196	6Article 1 Sec. 10.
197	197	REVISOR SGS/EN 25-0525703/26/25 7.1of state grants management policies and fraud, misuse, or other unlawful use of state funds
198	198	7.2in grant programs; and
199	199	7.3 (4) monitoring state agency compliance with state grantmaking laws and policies,
200	200	7.4including but not limited to the site visit and progress report requirements under section
201	201	7.516B.97, subdivision 4, clause (11).
202	202	7.6 Sec. 11. [3.995] DATA PRACTICES.
203	203	7.7 (a) The inspector general has access to all government data regardless of classification.
204	204	7.8 (b) It is not a violation of rights conferred by chapter 13 or any other statute related to
205	205	7.9the confidentiality of government data for an agency to provide data or information to the
206	206	7.10inspector general.
207	207	7.11 (c) The inspector general is subject to the Government Data Practices Act, chapter 13,
208	208	7.12and must protect from unlawful disclosure data classified as not public. Data collected,
209	209	7.13created, received, or maintained by the inspector general relating to an investigation are
210	210	7.14subject to section 13.392.
211	211	7.15 (d) If data provided by the inspector general to the Legislative Audit Commission is
212	212	7.16disseminated by the commission or its members or agents in violation of section 13.05,
213	213	7.17subdivision 4, the commission is subject to liability under section 13.08, subdivisions 1 and
214	214	7.183. Members of the commission have access to not public data that is collected or used by
215	215	7.19the inspector general only as authorized by resolution of the commission. The commission
216	216	7.20may not authorize its members to have access to private or confidential data on individuals
217	217	7.21collected or used in connection with the collection of any tax.
218	218	7.22 Sec. 12. [3.996] RETALIATION PROHIBITED.
219	219	7.23 An employee or other individual who discloses information to an agency or the inspector
220	220	7.24general about suspected fraud, misuse, or other unlawful use of public funds in state programs
221	221	7.25is protected under section 181.932, governing disclosure of information by employees.
222	222	7.26 Sec. 13. [3.997] DUTY TO AID INSPECTOR GENERAL; PENALTIES.
223	223	7.27 Subdivision 1.Duty to aid.All public officials and their deputies and employees, and
224	224	7.28all corporations, firms, and individuals having business involving the receipt, disbursement,
225	225	7.29or custody of public funds must at all times:
226	226	7.30 (1) afford reasonable facilities for examination by the inspector general;
227	227	7.31 (2) provide returns and reports required by the inspector general;
228	228	7Article 1 Sec. 13.
229	229	REVISOR SGS/EN 25-0525703/26/25 8.1 (3) attend and answer under oath the inspector general's lawful inquiries;
230	230	8.2 (4) produce and exhibit all books, accounts, documents, data of any classification, and
231	231	8.3property that the inspector general requests to inspect; and
232	232	8.4 (5) in all things cooperate with the inspector general.
233	233	8.5 Subd. 2.Penalties.(a) If a person refuses or neglects to obey any lawful direction of
234	234	8.6the inspector general or withholds any information, data, book, record, paper, or other
235	235	8.7document called for by the inspector general for the purpose of examination, after having
236	236	8.8been lawfully required by order or subpoena, upon application by the inspector general, a
237	237	8.9judge of the district court in the county where the order or subpoena was made returnable
238	238	8.10must compel obedience or punish disobedience as for contempt, as in the case of a similar
239	239	8.11order or subpoena issued by the court.
240	240	8.12 (b) A person who swears falsely to the inspector general concerning any matter stated
241	241	8.13under oath is guilty of a gross misdemeanor.
242	242	8.14 Sec. 14. [3.998] REPORTING REQUIRED.
243	243	8.15 (a) When the inspector general documents the existence of suspected fraud, misuse, or
244	244	8.16other unlawful use of public funds in an agency or program administered by an agency, the
245	245	8.17inspector general must quantify the amount of suspected fraud, misuse, and other unlawful
246	246	8.18use of public funds and report this amount to the Legislative Audit Commission and the
247	247	8.19chairs and ranking minority members of the legislative committees with jurisdiction over
248	248	8.20the agency's operating budget.
249	249	8.21 (b) By December 1, 2026, and by each December 1 thereafter, the inspector general
250	250	8.22must submit a report to the Legislative Audit Commission summarizing its activities for
251	251	8.23the past calendar year. The report must include but is not limited to:
252	252	8.24 (1) summary data, as defined in section 13.02, subdivision 19, for all reports or tips
253	253	8.25received, disaggregated by type of allegation, agency or program at issue, and disposition;
254	254	8.26 (2) the number of investigations conducted during the past calendar year; and
255	255	8.27 (3) for all investigations closed during the past calendar year, a list of the state agencies
256	256	8.28and programs investigated and summary information regarding each investigation's findings,
257	257	8.29actions taken by the inspector general as a result of those findings, and known outcomes.
258	258	8Article 1 Sec. 14.
259	259	REVISOR SGS/EN 25-0525703/26/25 9.1 Sec. 15. [15.442] DETECTION AND PREVENTION OF FRAUD AND OTHER
260	260	9.2MISUSES OF PUBLIC FUNDS.
261	261	9.3 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
262	262	9.4the meanings given.
263	263	9.5 (b) "Agency" has the meaning given in section 3.99.
264	264	9.6 (c) "Obligated officer" means an agency's:
265	265	9.7 (1) chief executive officer;
266	266	9.8 (2) deputy and assistant chief executive officers;
267	267	9.9 (3) chief administrative, chief financial, chief information, and chief investigative officers;
268	268	9.10 (4) heads of divisions, bureaus, departments, institutes, or other such organizational
269	269	9.11units; and
270	270	9.12 (5) where applicable, board chair.
271	271	9.13 Subd. 2.Suspected fraud or other misuse.Notwithstanding any law to the contrary,
272	272	9.14if an obligated officer finds or receives credible indicia of fraud, misuse, or other unlawful
273	273	9.15use of public funds in a grant program or other program administered by the agency, the
274	274	9.16agency must:
275	275	9.17 (1) report to the appropriate law enforcement entity;
276	276	9.18 (2) report to the inspector general and the legislative auditor under section 609.456;
277	277	9.19 (3) fully cooperate with law enforcement and the inspector general, including but not
278	278	9.20limited to assisting in any investigation and subsequent civil or criminal prosecution; and
279	279	9.21 (4) if approved or directed by law enforcement, stop payment, increase oversight, or
280	280	9.22take other action necessary to prevent further suspected fraud or misuse of public funds in
281	281	9.23the program.
282	282	9.24 Subd. 3.Identification of fraud reporting tools.(a) The commissioner or other chief
283	283	9.25executive officer of each agency must prominently highlight on the agency's website the
284	284	9.26fraud reporting tools administered by the Office of the Inspector General and the Office of
285	285	9.27the Legislative Auditor under chapter 3.
286	286	9.28 (b) As part of any grant agreement between the state and a nonprofit organization, the
287	287	9.29agreement must require the nonprofit organization to prominently highlight on the
288	288	9.30organization's website the fraud reporting tools administered by the Office of the Inspector
289	289	9.31General and the Office of the Legislative Auditor under chapter 3. The state agency
290	290	9Article 1 Sec. 15.
291	291	REVISOR SGS/EN 25-0525703/26/25 10.1administering the grant must regularly confirm and document the organization's compliance
292	292	10.2with the requirement under this paragraph for the life of the grant agreement.
293	293	10.3 Sec. 16. Minnesota Statutes 2024, section 609.456, subdivision 2, is amended to read:
294	294	10.4 Subd. 2.Legislative auditor and inspector general.Whenever an employee or officer
295	295	10.5of the state, University of Minnesota, or other organization listed in section 3.971, subdivision
296	296	10.66, discovers evidence of fraud, theft, embezzlement, or other unlawful use of public funds
297	297	10.7or property, the employee or officer shall, except when to do so would knowingly impede
298	298	10.8or otherwise interfere with an ongoing criminal investigation, promptly report in writing to
299	299	10.9the legislative auditor and inspector general a detailed description of the alleged incident
300	300	10.10or incidents.
301	301	10.11Sec. 17. APPROPRIATION.
302	302	10.12 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
303	303	10.13fund to the inspector general for purposes of this act.
304	304	10.14Sec. 18. APPROPRIATION.
305	305	10.15 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
306	306	10.16fund to the legislative auditor. The amount each year is in addition to the legislative auditor's
307	307	10.17base general fund budget.
308	308	10.18Sec. 19. EFFECTIVE DATE.
309	309	10.19 This article is effective July 1, 2025.
310	310	10.20 ARTICLE 2
311	311	10.21 CONFORMING ITEMS AND REPEALERS
312	312	10.22Section 1. Minnesota Statutes 2024, section 3.855, subdivision 3, is amended to read:
313	313	10.23 Subd. 3.Other salary and compensation plan plans.The commission shall review
314	314	10.24and approve or reject the plan for compensation, terms, and conditions of employment of
315	315	10.25classified employees in the office of the legislative auditor under section 3.971, subdivision
316	316	10.262, and a plan for compensation, terms, and conditions of employment for employees of the
317	317	10.27Office of the Inspector General under section 3.991, subdivision 5.
318	318	10Article 2 Section 1.
319	319	REVISOR SGS/EN 25-0525703/26/25 11.1 Sec. 2. Minnesota Statutes 2024, section 16B.97, subdivision 2, is amended to read:
320	320	11.2 Subd. 2.Grants governance.The commissioner shall provide leadership and direction
321	321	11.3for policy related to grants management in Minnesota in order to foster more consistent,
322	322	11.4streamlined interaction between executive agencies, funders, and grantees that will enhance
323	323	11.5access to grant opportunities and information, prevent fraud, misuse, and other unlawful
324	324	11.6uses of public funds, and lead to greater program accountability and transparency. The
325	325	11.7commissioner has the duties and powers stated in this section. Executive agencies shall
326	326	11.8fully cooperate with the commissioner in the creation, management, and oversight of state
327	327	11.9grants and must do what the commissioner requires under this section. The commissioner
328	328	11.10may adopt rules to carry out grants governance, oversight, and management.
329	329	11.11Sec. 3. Minnesota Statutes 2024, section 16B.97, subdivision 4, is amended to read:
330	330	11.12 Subd. 4.Duties.(a) The commissioner shall:
331	331	11.13 (1) create general grants management policies and procedures that are applicable to all
332	332	11.14executive agencies. The commissioner may approve exceptions to these policies and
333	333	11.15procedures for particular grant programs, however the commissioner must not approve an
334	334	11.16exception to the requirements under clause (11) for any grant over $500,000. Exceptions
335	335	11.17shall expire or be renewed after five years. The commissioner must report each approved
336	336	11.18exception to the inspector general and the chairs and ranking minority members of the
337	337	11.19legislative committees with jurisdiction over the agency. If a grant is suspended under
338	338	11.20section 16B.991, subdivision 1, the commissioner must revoke for at least 12 months any
339	339	11.21approved exception to the requirements under clause (11) for that particular grant program,
340	340	11.22but the commissioner's revocation only applies to any grant over $50,000. Executive agencies
341	341	11.23shall retain management of individual grants programs;
342	342	11.24 (2) provide a central point of contact concerning statewide grants management policies
343	343	11.25and procedures;
344	344	11.26 (3) serve as a resource to executive agencies in such areas as training, evaluation,
345	345	11.27collaboration, and best practices in grants management;
346	346	11.28 (4) ensure grants management needs are considered in the development, upgrade, and
347	347	11.29use of statewide administrative systems and leverage existing technology wherever possible;
348	348	11.30 (5) oversee and approve future professional and technical service contracts and other
349	349	11.31information technology spending related to executive agency grants management systems
350	350	11.32and activities;
351	351	11Article 2 Sec. 3.
352	352	REVISOR SGS/EN 25-0525703/26/25 12.1 (6) provide a central point of contact for comments about executive agencies violating
353	353	12.2statewide grants governance policies and about fraud, misuse, and waste other unlawful
354	354	12.3uses of public funds in grants processes;
355	355	12.4 (7) forward received comments to the appropriate agency for further action, and may
356	356	12.5follow up as necessary;
357	357	12.6 (8) provide a single listing of all available executive agency competitive grant
358	358	12.7opportunities and resulting grant recipients;
359	359	12.8 (9) selectively review development and implementation of executive agency grants,
360	360	12.9policies, and practices; and
361	361	12.10 (10) selectively review executive agency compliance with best practices.; and
362	362	12.11 (11) require executive agencies to:
363	363	12.12 (i) conduct at least one in-person, unannounced monitoring visit before final payment
364	364	12.13is made for any grant over $50,000 and at least annual in-person, unannounced monitoring
365	365	12.14visits for any grant over $250,000; and
366	366	12.15 (ii) withhold funds from any grantee that does not submit a progress report required
367	367	12.16under the grant agreement until the grantee submits a satisfactory report, unless the grantee's
368	368	12.17inability to submit a progress report is caused by the executive agency, including but not
369	369	12.18limited to a malfunction or failure of the executive agency's grant portal.
370	370	12.19 (b) The commissioner may determine that it is cost-effective for agencies to develop
371	371	12.20and use shared grants management technology systems. This system would be governed
372	372	12.21under section 16E.01, subdivision 3, paragraph (b).
373	373	12.22Sec. 4. Minnesota Statutes 2024, section 16B.98, subdivision 4, is amended to read:
374	374	12.23 Subd. 4.Reporting of violations.A state employee who discovers evidence of violation
375	375	12.24of laws or rules governing grants is encouraged to must report the violation or suspected
376	376	12.25violation to the employee's supervisor, the commissioner or the commissioner's designee,
377	377	12.26the inspector general, or the legislative auditor. If the state employee notifies the employee's
378	378	12.27supervisor, the commissioner, or the commissioner's designee, then the supervisor,
379	379	12.28commissioner, or commissioner's designee must immediately notify the inspector general
380	380	12.29and the legislative auditor. The legislative auditor inspector general shall report to the
381	381	12.30Legislative Audit Commission if there are multiple complaints about the same agency. The
382	382	12.31auditor's report to the Legislative Audit Commission under this section must disclose only
383	383	12.32the number and type of violations alleged. An employee making a good faith report under
384	384	12Article 2 Sec. 4.
385	385	REVISOR SGS/EN 25-0525703/26/25 13.1this section has the protections provided for under section 181.932, prohibiting the employer
386	386	13.2from discriminating against the employee.
387	387	13.3 Sec. 5. Minnesota Statutes 2024, section 16B.98, subdivision 8, is amended to read:
388	388	13.4 Subd. 8.Audit.(a) A grant agreement made by an executive agency must include an
389	389	13.5audit clause that provides that the books, records, documents, and accounting procedures
390	390	13.6and practices of the grantee or other party that are relevant to the grant or transaction are
391	391	13.7subject to examination by the commissioner, the granting agency, the inspector general,
392	392	13.8and either the legislative auditor or the state auditor, as appropriate, for a minimum of six
393	393	13.9years from the grant agreement end date, receipt and approval of all final reports, or the
394	394	13.10required period of time to satisfy all state and program retention requirements, whichever
395	395	13.11is later. If a grant agreement does not include an express audit clause, the audit authority
396	396	13.12under this subdivision is implied.
397	397	13.13 (b) If the granting agency is a local unit of government, and the governing body of the
398	398	13.14local unit of government requests that the state auditor examine the books, records,
399	399	13.15documents, and accounting procedures and practices of the grantee or other party according
400	400	13.16to this subdivision, the granting agency shall be liable for the cost of the examination. If
401	401	13.17the granting agency is a local unit of government, and the grantee or other party requests
402	402	13.18that the state auditor examine all books, records, documents, and accounting procedures
403	403	13.19and practices related to the grant, the grantee or other party that requested the examination
404	404	13.20shall be liable for the cost of the examination.
405	405	13.21Sec. 6. Minnesota Statutes 2024, section 16B.98, subdivision 14, is amended to read:
406	406	13.22 Subd. 14.Administrative costs.Unless amounts are otherwise appropriated for
407	407	13.23administrative costs, a state agency may retain up to five four percent of the amount
408	408	13.24appropriated to the agency for grants enacted by the legislature and formula grants and up
409	409	13.25to ten nine percent for competitively awarded grants. This subdivision applies to
410	410	13.26appropriations made for new grant programs enacted on or after July 1, 2023. The state
411	411	13.27agency must transfer one percent of the amount appropriated to the agency for grants to the
412	412	13.28inspector general established under section 3.991. This subdivision does not apply to grants
413	413	13.29funded with an appropriation of proceeds from the sale of state general obligation bonds.
414	414	13.30Sec. 7. Minnesota Statutes 2024, section 16B.991, subdivision 1, is amended to read:
415	415	13.31 Subdivision 1.Criminal charge or conviction.Each grant agreement subject to sections
416	416	13.3216B.97 and 16B.98 must provide that the agreement will immediately be terminated
417	417	13Article 2 Sec. 7.
418	418	REVISOR SGS/EN 25-0525703/26/25 14.1suspended if the recipient is convicted of charged with a criminal offense relating to a state
419	419	14.2grant agreement and terminated if the recipient is convicted.
420	420	14.3 Sec. 8. Minnesota Statutes 2024, section 142B.53, is amended to read:
421	421	14.4 142B.53 MANDATORY REPORTING.
422	422	14.5 Any individual engaging in licensing functions and activities under this chapter, including
423	423	14.6authorities delegated under section 142B.30, must immediately report any suspected fraud
424	424	14.7to county children, youth, and families investigators or and the Department of Children,
425	425	14.8Youth, and Families Office of the Inspector General.
426	426	14.9 Sec. 9. Minnesota Statutes 2024, section 245A.24, is amended to read:
427	427	14.10 245A.24 MANDATORY REPORTING.
428	428	14.11 Any individual engaging in licensing functions and activities under this chapter, including
429	429	14.12authorities delegated under section 245A.16, must immediately report any suspected fraud
430	430	14.13to county human services investigators or the Department of Human Services Office of
431	431	14.14Inspector General, and the Office of the Inspector General for the purposes of an investigation
432	432	14.15conducted under section 3.991.
433	433	14.16Sec. 10. Minnesota Statutes 2024, section 268.19, subdivision 1, is amended to read:
434	434	14.17 Subdivision 1.Use of data.(a) Except as provided by this section, data gathered from
435	435	14.18any person under the administration of the Minnesota Unemployment Insurance Law are
436	436	14.19private data on individuals or nonpublic data not on individuals as defined in section 13.02,
437	437	14.20subdivisions 9 and 12, and may not be disclosed except according to a district court order
438	438	14.21or section 13.05. A subpoena is not considered a district court order. These data may be
439	439	14.22disseminated to and used by the following agencies without the consent of the subject of
440	440	14.23the data:
441	441	14.24 (1) state and federal agencies specifically authorized access to the data by state or federal
442	442	14.25law;
443	443	14.26 (2) any agency of any other state or any federal agency charged with the administration
444	444	14.27of an unemployment insurance program;
445	445	14.28 (3) any agency responsible for the maintenance of a system of public employment offices
446	446	14.29for the purpose of assisting individuals in obtaining employment;
447	447	14.30 (4) the public authority responsible for child support in Minnesota or any other state in
448	448	14.31accordance with section 518A.83;
449	449	14Article 2 Sec. 10.
450	450	REVISOR SGS/EN 25-0525703/26/25 15.1 (5) human rights agencies within Minnesota that have enforcement powers;
451	451	15.2 (6) the Department of Revenue to the extent necessary for its duties under Minnesota
452	452	15.3laws;
453	453	15.4 (7) public and private agencies responsible for administering publicly financed assistance
454	454	15.5programs for the purpose of monitoring the eligibility of the program's recipients;
455	455	15.6 (8) the Department of Labor and Industry and the Commerce Fraud Bureau in the
456	456	15.7Department of Commerce for uses consistent with the administration of their duties under
457	457	15.8Minnesota law;
458	458	15.9 (9) the Department of Human Services and the Office of the Inspector General and its
459	459	15.10agents within the Department of Human Services, including county fraud investigators, for
460	460	15.11investigations related to recipient or provider fraud and employees of providers when the
461	461	15.12provider is suspected of committing public assistance fraud;
462	462	15.13 (10) the Department of Human Services for the purpose of evaluating medical assistance
463	463	15.14services and supporting program improvement;
464	464	15.15 (11) local and state welfare agencies for monitoring the eligibility of the data subject
465	465	15.16for assistance programs, or for any employment or training program administered by those
466	466	15.17agencies, whether alone, in combination with another welfare agency, or in conjunction
467	467	15.18with the department or to monitor and evaluate the statewide Minnesota family investment
468	468	15.19program and other cash assistance programs, the Supplemental Nutrition Assistance Program,
469	469	15.20and the Supplemental Nutrition Assistance Program Employment and Training program by
470	470	15.21providing data on recipients and former recipients of Supplemental Nutrition Assistance
471	471	15.22Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child
472	472	15.23care assistance under chapter 142E, or medical programs under chapter 256B or 256L or
473	473	15.24formerly codified under chapter 256D;
474	474	15.25 (12) local and state welfare agencies for the purpose of identifying employment, wages,
475	475	15.26and other information to assist in the collection of an overpayment debt in an assistance
476	476	15.27program;
477	477	15.28 (13) local, state, and federal law enforcement agencies for the purpose of ascertaining
478	478	15.29the last known address and employment location of an individual who is the subject of a
479	479	15.30criminal investigation;
480	480	15.31 (14) the United States Immigration and Customs Enforcement has access to data on
481	481	15.32specific individuals and specific employers provided the specific individual or specific
482	482	15.33employer is the subject of an investigation by that agency;
483	483	15Article 2 Sec. 10.
484	484	REVISOR SGS/EN 25-0525703/26/25 16.1 (15) the Department of Health for the purposes of epidemiologic investigations;
485	485	16.2 (16) the Department of Corrections for the purposes of case planning and internal research
486	486	16.3for preprobation, probation, and postprobation employment tracking of offenders sentenced
487	487	16.4to probation and preconfinement and postconfinement employment tracking of committed
488	488	16.5offenders;
489	489	16.6 (17) the state auditor to the extent necessary to conduct audits of job opportunity building
490	490	16.7zones as required under section 469.3201;
491	491	16.8 (18) the Office of Higher Education for purposes of supporting program improvement,
492	492	16.9system evaluation, and research initiatives including the Statewide Longitudinal Education
493	493	16.10Data System; and
494	494	16.11 (19) the Family and Medical Benefits Division of the Department of Employment and
495	495	16.12Economic Development to be used as necessary to administer chapter 268B.; and
496	496	16.13 (20) the Office of the Inspector General for the purposes of an investigation conducted
497	497	16.14under section 3.991.
498	498	16.15 (b) Data on individuals and employers that are collected, maintained, or used by the
499	499	16.16department in an investigation under section 268.182 are confidential as to data on individuals
500	500	16.17and protected nonpublic data not on individuals as defined in section 13.02, subdivisions 3
501	501	16.18and 13, and must not be disclosed except under statute or district court order or to a party
502	502	16.19named in a criminal proceeding, administrative or judicial, for preparation of a defense.
503	503	16.20 (c) Data gathered by the department in the administration of the Minnesota unemployment
504	504	16.21insurance program must not be made the subject or the basis for any suit in any civil
505	505	16.22proceedings, administrative or judicial, unless the action is initiated by the department.
506	506	16.23Sec. 11. Minnesota Statutes 2024, section 268B.30, is amended to read:
507	507	16.24 268B.30 DATA PRIVACY.
508	508	16.25 (a) Except as provided by this section, data collected, created, or maintained under this
509	509	16.26chapter are private data on individuals or nonpublic data not on individuals as defined in
510	510	16.27section 13.02, subdivisions 9 and 12, and must not be disclosed except according to a district
511	511	16.28court order or section 13.05. A subpoena is not considered a district court order.
512	512	16.29 (b) Data classified under paragraph (a) may be disseminated to and used by the following
513	513	16.30without the consent of the subject of the data:
514	514	16.31 (1) state and federal agencies specifically authorized access to the data by state or federal
515	515	16.32law;
516	516	16Article 2 Sec. 11.
517	517	REVISOR SGS/EN 25-0525703/26/25 17.1 (2) the unemployment insurance division, to the extent necessary to administer the
518	518	17.2programs established under this chapter and chapter 268;
519	519	17.3 (3) employers, to the extent necessary to support adjudication of application requests
520	520	17.4and to support the employer's administration of a leave of absence;
521	521	17.5 (4) health care providers, to the extent necessary to support verification of health care
522	522	17.6conditions and qualifying events;
523	523	17.7 (5) the public authority responsible for child support in Minnesota or any other state in
524	524	17.8accordance with section 518A.83;
525	525	17.9 (6) human rights agencies within Minnesota that have enforcement powers;
526	526	17.10 (7) the Department of Revenue, to the extent necessary for its duties under Minnesota
527	527	17.11laws;
528	528	17.12 (8) public and private agencies responsible for administering publicly financed assistance
529	529	17.13programs for the purpose of monitoring the eligibility of the program's recipients;
530	530	17.14 (9) the Department of Labor and Industry and the Commerce Fraud Bureau in the
531	531	17.15Department of Commerce for uses consistent with the administration of their duties under
532	532	17.16Minnesota law;
533	533	17.17 (10) the Department of Human Services and the Office of the Inspector General and its
534	534	17.18agents within the Department of Human Services, including county fraud investigators, for
535	535	17.19investigations related to recipient or provider fraud and employees of providers when the
536	536	17.20provider is suspected of committing public assistance fraud;
537	537	17.21 (11) the Department of Public Safety for support in identity verification;
538	538	17.22 (12) local, state, and federal law enforcement agencies for the purpose of ascertaining
539	539	17.23the last known address and employment location of an individual who is the subject of a
540	540	17.24criminal investigation;
541	541	17.25 (13) the Department of Health for the purposes of epidemiologic investigations;
542	542	17.26 (14) the Department of Corrections for the purposes of tracking incarceration of
543	543	17.27applicants; and
544	544	17.28 (15) contracted third parties, to the extent necessary to aid in identity verification,
545	545	17.29adjudication, administration, and evaluation of the program.; and
546	546	17.30 (16) the Office of the Inspector General for the purposes of an investigation conducted
547	547	17.31under section 3.991.
548	548	17Article 2 Sec. 11.
549	549	REVISOR SGS/EN 25-0525703/26/25 18.1 (c) Data on individuals and employers that are collected, maintained, or used by the
550	550	18.2department in an investigation under section 268B.19, 268B.21, 268B.22, or 268B.23 are
551	551	18.3confidential as to data on individuals and protected nonpublic data not on individuals as
552	552	18.4defined in section 13.02, subdivisions 3 and 13, and must not be disclosed except under
553	553	18.5statute or district court order or to a party named in a criminal proceeding, administrative
554	554	18.6or judicial, for preparation of a defense.
555	555	18.7 (d) Data gathered by the department in the administration of this chapter must not be
556	556	18.8made the subject or the basis for any suit in any civil proceedings, administrative or judicial,
557	557	18.9unless the action is initiated by the department.
558	558	18.10Sec. 12. EXISTING DUTIES ABOLISHED; TRANSFERS PROVIDED.
559	559	18.11 Subdivision 1.Duties abolished.Except as provided in subdivision 3, duties pertaining
560	560	18.12to the investigation of fraud, misuse, and other unlawful use of public funds in the Offices
561	561	18.13of Inspector General in the Departments of Education; Human Services; and Children,
562	562	18.14Youth, and Families are abolished effective the day after the inspector general under
563	563	18.15Minnesota Statutes, section 3.991, certifies in writing to the commissioner of the respective
564	564	18.16department and the commissioner of management and budget that the inspector general has
565	565	18.17assumed responsibility for these duties.
566	566	18.18 Subd. 2.Inspector general transfers.Pursuant to Minnesota Statutes, section 15.039,
567	567	18.19all active investigations, obligations, court actions, contracts, records, personnel, and
568	568	18.20unexpended funds shall transfer from each department in subdivision 1 to the inspector
569	569	18.21general under Minnesota Statutes, section 3.991, except as provided by the inspector general.
570	570	18.22 Subd. 3.Exceptions.(a) Positions in the following divisions and teams in the Department
571	571	18.23of Human Services do not transfer to the Office of the Inspector General:
572	572	18.24 (1) the background studies division;
573	573	18.25 (2) the licensing division;
574	574	18.26 (3) the enterprise operations and policy division;
575	575	18.27 (4) the background studies legal team;
576	576	18.28 (5) the licensing legal team;
577	577	18.29 (6) the Medicaid program integrity team within program integrity oversight division;
578	578	18.30and
579	579	18.31 (7) the Medicaid provider audits and investigations team within program integrity
580	580	18.32oversight division.
581	581	18Article 2 Sec. 12.
582	582	REVISOR SGS/EN 25-0525703/26/25 19.1 (b) No employees or positions in the Department of Corrections are transferred under
583	583	19.2this section.
584	584	19.3 (c) No employees or positions in the student maltreatment program of the Department
585	585	19.4of Education or other Department of Education employees or positions dedicated to student
586	586	19.5maltreatment investigations under Minnesota Statutes, chapter 260E, are transferred under
587	587	19.6this section.
588	588	19.7 Sec. 13. REPEALER.
589	589	19.8 Minnesota Statutes 2024, sections 13.321, subdivision 12; and 127A.21, are repealed.
590	590	19.9 Sec. 14. EFFECTIVE DATE.
591	591	19.10 (a) Sections 1 to 7 and 12 are effective July 1, 2025.
592	592	19.11 (b) Section 8 is effective the day after the inspector general notifies the revisor of statutes
593	593	19.12that the Office of the Inspector General has assumed responsibility for identifying and
594	594	19.13investigating fraud, misuse, or other unlawful use of public funds in the Department of
595	595	19.14Children, Youth, and Families.
596	596	19.15 (c) Sections 9 to 11 are effective the day after the inspector general notifies the revisor
597	597	19.16of statutes that the Office of the Inspector General has assumed responsibility for identifying
598	598	19.17and investigating fraud, misuse, or other unlawful use of public funds in the Department of
599	599	19.18Human Services.
600	600	19.19 (d) Section 13 is effective the day after the inspector general under Minnesota Statutes,
601	601	19.20section 3.991, notifies the revisor of statutes that the Office of the Inspector General under
602	602	19.21Minnesota Statutes, section 3.991, has assumed responsibility for identifying and
603	603	19.22investigating fraud, misuse, or other unlawful use of public funds in the Department of
604	604	19.23Education.
605	605	19Article 2 Sec. 14.
606	606	REVISOR SGS/EN 25-0525703/26/25 Page.Ln 1.13OFFICE OF THE INSPECTOR GENERAL.........................................ARTICLE 1
607	607	Page.Ln 10.20CONFORMING ITEMS AND REPEALERS.......................................ARTICLE 2
608	608	1
609	609	APPENDIX
610	610	Article locations for 25-05257 13.321 PREKINDERGAR TEN TO GRADE 12 EDUCATIONAL DATA CODED
611	611	ELSEWHERE.
612	612	Subd. 12.Office of the Inspector General; access to data.Data involving the Department of
613	613	Education's Office of the Inspector General are governed by section 127A.21.
614	614	127A.21 OFFICE OF THE INSPECTOR GENERAL.
615	615	Subdivision 1.Establishment of Office of the Inspector General; powers; duties.The
616	616	commissioner must establish within the department an Office of the Inspector General. The inspector
617	617	general shall report directly to the commissioner. The Office of the Inspector General is charged
618	618	with protecting the integrity of the department and the state by detecting and preventing fraud,
619	619	waste, and abuse in department programs. The Office of the Inspector General must conduct
620	620	independent and objective investigations to promote the integrity of the department's programs and
621	621	operations. When fraud or other misuse of public funds is detected, the Office of the Inspector
622	622	General must report it to the appropriate law enforcement entity and collaborate and cooperate with
623	623	law enforcement to assist in the investigation and any subsequent civil and criminal prosecution.
624	624	Subd. 1a.Definitions.(a) For purposes of this section, the following terms have the meanings
625	625	given.
626	626	(b) "Abuse" means actions that may, directly or indirectly, result in unnecessary costs to
627	627	department programs. Abuse may involve paying for items or services when there is no legal
628	628	entitlement to that payment.
629	629	(c) "Department program" means a program funded by the Department of Education that involves
630	630	the transfer or disbursement of public funds or other resources to a program participant. "Department
631	631	program" includes state and federal aids or grants received by a school district or charter school or
632	632	other program participant.
633	633	(d) "Fraud" means an intentional or deliberate act to deprive another of property or money or
634	634	to acquire property or money by deception or other unfair means. Fraud includes intentionally
635	635	submitting false information to the department for the purpose of obtaining a greater compensation
636	636	or benefit than that to which the person is legally entitled. Fraud also includes failure to correct
637	637	errors in the maintenance of records in a timely manner after a request by the department.
638	638	(e) "Investigation" means an audit, investigation, proceeding, or inquiry by the Office of the
639	639	Inspector General related to a program participant in a department program.
640	640	(f) "Program participant" means any entity or person, including associated persons, that receives,
641	641	disburses, or has custody of funds or other resources transferred or disbursed under a department
642	642	program.
643	643	(g) "Waste" means practices that, directly or indirectly, result in unnecessary costs to department
644	644	programs, such as misusing resources.
645	645	(h) For purposes of this section, neither "fraud," "waste," nor "abuse" includes decisions on
646	646	instruction, curriculum, personnel, or other discretionary policy decisions made by a school district,
647	647	charter school, cooperative unit as defined by section 123A.24, subdivision 2, or any library, library
648	648	system, or library district defined in section 134.001.
649	649	Subd. 2. Hiring; reporting; procedures.(a) The commissioner, or the commissioner's designee,
650	650	must hire an inspector general to lead the Office of the Inspector General. The inspector general
651	651	must hire a deputy inspector general and, at the discretion of the inspector general, sufficient assistant
652	652	inspectors general to carry out the duties of the office. The inspector general, deputy inspector
653	653	general, and any assistant inspectors general serve in the classified service.
654	654	(b) In a form and manner determined by the inspector general, the Office of the Inspector General
655	655	must develop a public platform for the public to report instances of potential fraud, waste, or abuse
656	656	of public funds administered by the department. Nothing in this paragraph shall be construed to
657	657	give a member of the public standing to sue based on allegations of fraud, waste, or abuse.
658	658	(c) The inspector general shall establish procedures for conducting investigations. Procedures
659	659	adopted under this subdivision are not subject to chapter 14, including section 14.386.
660	660	Subd. 3.Subpoenas.(a) For the purpose of an investigation, the inspector general or a designee
661	661	may administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence, and
662	662	issue subpoenas duces tecum to require the production of books, papers, correspondence, memoranda,
663	663	agreements, financial records, or other documents or records relevant to the investigation.
664	664	1R
665	665	APPENDIX
666	666	Repealed Minnesota Statutes: 25-05257 (b) A subpoena issued pursuant to this subdivision must state that the subpoena recipient may
667	667	not disclose the fact that the subpoena was issued or the fact that the requested records have been
668	668	given to the inspector general, or their staff, except:
669	669	(1) in so far as the disclosure is necessary to find and disclose the records;
670	670	(2) pursuant to court order; or
671	671	(3) to legal counsel for the purposes of responding to the subpoena.
672	672	(c) The fees for service of a subpoena must be paid in the same manner as prescribed by law
673	673	for a service of process issued by a district court.
674	674	(d) The subpoena issued under this subdivision shall be enforceable through the district court
675	675	in the district where the subpoena is issued.
676	676	Subd. 4.Access to records.(a) For purposes of an investigation, and regardless of the data's
677	677	classification under chapter 13, the Office of the Inspector General shall have access to all relevant
678	678	books, accounts, documents, data, and property related to department programs that are maintained
679	679	by a program participant, charter school, or government entity as defined by section 13.02.
680	680	(b) Notwithstanding paragraph (a), the Office of the Inspector General must issue a subpoena
681	681	under subdivision 3 in order to access routing and account numbers to which Department of
682	682	Education funds have been disbursed.
683	683	(c) Records requested by the Office of the Inspector General under this subdivision shall be
684	684	provided in a format, place, and time frame reasonably requested by the Office of the Inspector
685	685	General.
686	686	(d) The department may enter into specific agreements with other state agencies related to
687	687	records requests by the Office of the Inspector General.
688	688	Subd. 5.Sanctions; appeal.(a) This subdivision does not authorize any sanction that reduces,
689	689	pauses, or otherwise interrupts state or federal aid to a school district, charter school, cooperative
690	690	unit as defined by section 123A.24, subdivision 2, or any library, library system, or library district
691	691	defined in section 134.001.
692	692	(b) The inspector general may recommend that the commissioner impose appropriate temporary
693	693	sanctions, including withholding of payments under the department program, on a program participant
694	694	pending an investigation by the Office of the Inspector General if:
695	695	(1) during the course of an investigation, the Office of the Inspector General finds credible
696	696	indicia of fraud, waste, or abuse by the program participant;
697	697	(2) there has been a criminal, civil, or administrative adjudication of fraud, waste, or abuse
698	698	against the program participant in Minnesota or in another state or jurisdiction;
699	699	(3) the program participant was receiving funds under any contract or registered in any program
700	700	administered by another Minnesota state agency, a government agency in another state, or a federal
701	701	agency, and was excluded from that contract or program for reasons credibly indicating fraud,
702	702	waste, or abuse by the program participant; or
703	703	(4) the program participant has a pattern of noncompliance with an investigation.
704	704	(c) If an investigation finds, by a preponderance of the evidence, fraud, waste, or abuse by a
705	705	program participant, the inspector general may, after reviewing all facts and evidence and when
706	706	acting judiciously on a case-by-case basis, recommend that the commissioner impose appropriate
707	707	sanctions on the program participant.
708	708	(d) Unless prohibited by law, the commissioner has the authority to implement recommendations
709	709	by the inspector general, including imposing appropriate sanctions, temporarily or otherwise, on a
710	710	program participant. Sanctions may include ending program participation, stopping disbursement
711	711	of funds or resources, monetary recovery, and termination of department contracts with the participant
712	712	for any current or future department program or contract. A sanction may be imposed for up to the
713	713	longest period permitted by state or federal law. Sanctions authorized under this subdivision are in
714	714	addition to other remedies and penalties available under law.
715	715	(e) If the commissioner imposes sanctions on a program participant under this subdivision, the
716	716	commissioner must notify the participant in writing within seven business days of imposing the
717	717	sanction, unless requested in writing by a law enforcement agency to temporarily delay issuing the
718	718	2R
719	719	APPENDIX
720	720	Repealed Minnesota Statutes: 25-05257 notice to prevent disruption of an ongoing law enforcement agency investigation. A notice of
721	721	sanction must state:
722	722	(1) the sanction being imposed;
723	723	(2) the general allegations that form the basis for the sanction;
724	724	(3) the duration of the sanction;
725	725	(4) the department programs to which the sanction applies; and
726	726	(5) how the program participant may appeal the sanction pursuant to paragraph (e).
727	727	(f) A program participant sanctioned under this subdivision may, within 30 days after the date
728	728	the notice of sanction was mailed to the participant, appeal the determination by requesting in
729	729	writing that the commissioner initiate a contested case proceeding under chapter 14. The scope of
730	730	any contested case hearing is limited to the sanction imposed under this subdivision. An appeal
731	731	request must specify with particularity each disputed item, the reason for the dispute, and must
732	732	include the name and contact information of the person or entity that may be contacted regarding
733	733	the appeal.
734	734	(g) The commissioner shall lift sanctions imposed under this subdivision if the Office of the
735	735	Inspector General determines there is insufficient evidence of fraud, waste, or abuse by the program
736	736	participant. The commissioner must notify the participant in writing within seven business days of
737	737	lifting the sanction.
738	738	Subd. 6.Data practices.(a) It is not a violation of rights conferred by chapter 13 or any other
739	739	statute related to the confidentiality of government data for a government entity as defined in section
740	740	13.02 to provide data or information under this section.
741	741	(b) The inspector general is subject to the Government Data Practices Act, chapter 13, and shall
742	742	protect from unlawful disclosure data classified as not public. Data collected, created, received, or
743	743	maintained by the inspector general relating to an audit, investigation, proceeding, or inquiry are
744	744	subject to section 13.39.
745	745	Subd. 7.Retaliation, interference prohibited.(a) An employee or other individual who
746	746	discloses information to the Office of the Inspector General about fraud, waste, or abuse in
747	747	department programs is protected under section 181.932, governing disclosure of information by
748	748	employees.
749	749	(b) No state employee may interfere with or obstruct an investigation authorized by this section.
750	750	3R
751	751	APPENDIX
752	752	Repealed Minnesota Statutes: 25-05257