Minnesota 2025-2026 Regular Session

Minnesota Senate Bill SF1219 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 the Inspector General;
3	3	1.3 providing powers; specifying duties; requiring a fraud reporting hotline; requiring
4	4	1.4 agencies to halt payments when fraud is suspected; eliminating agency-based
5	5	1.5 offices of inspector general; requiring a report; appropriating money; amending
6	6	1.6 Minnesota Statutes 2024, sections 3.97, subdivision 1, by adding subdivisions;
7	7	1.7 3.971, subdivisions 1, 9; 142B.53; 245A.24; 268.19, subdivision 1; 268B.30;
8	8	1.8 proposing coding for new law in Minnesota Statutes, chapters 3; 15; repealing
9	9	1.9 Minnesota Statutes 2024, sections 13.321, subdivision 12; 127A.21.
10	10	1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
11	11	1.11 ARTICLE 1
12	12	1.12 OFFICE OF THE INSPECTOR GENERAL
13	13	1.13 Section 1. Minnesota Statutes 2024, section 3.97, subdivision 1, is amended to read:
14	14	1.14 Subdivision 1.Policy.Continuous legislative review of the spending of public funds
15	15	1.15and financing at all levels of government is required in the public interest to enable the
16	16	1.16enactment of appropriate legislation. Fraud, waste, and abuse in public programs are
17	17	1.17unacceptable and must be prevented. If fraud occurs, it must be promptly identified and
18	18	1.18prosecuted to the fullest extent of the law.
19	19	1.19 Sec. 2. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
20	20	1.20 Subd. 3c.Appointment and oversight of the state inspector general.The commission
21	21	1.21must appoint and oversee the work of the inspector general as provided in sections 3.99 to
22	22	1.223.997.
23	23	1Article 1 Sec. 2.
24	24	25-02154 as introduced01/14/25 REVISOR SGS/HL
25	25	SENATE
26	26	STATE OF MINNESOTA
27	27	S.F. No. 1219NINETY-FOURTH SESSION
28	28	(SENATE AUTHORS: KORAN, Drazkowski, Bahr, Howe and Coleman)
29	29	OFFICIAL STATUSD-PGDATE
30	30	Introduction and first reading02/10/2025
31	31	Referred to State and Local Government 2.1 Sec. 3. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
32	32	2.2 Subd. 3d.Complementary.The commission must ensure that the work of the inspector
33	33	2.3general is complementary to, and not duplicative of, that of the legislative auditor.
34	34	2.4 Sec. 4. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
35	35	2.5 Subd. 3e.Executive secretaries.The legislative auditor and the inspector general are
36	36	2.6the executive secretaries of the commission.
37	37	2.7 Sec. 5. Minnesota Statutes 2024, section 3.971, subdivision 1, is amended to read:
38	38	2.8 Subdivision 1.Appointment and term.The legislative auditor is the executive secretary
39	39	2.9of the commission. The legislative auditor shall be appointed by the commission for a
40	40	2.10six-year term and serve in the unclassified service. When in office, the legislative auditor
41	41	2.11may not at any time hold any other public office. The legislative auditor may not be removed
42	42	2.12from office before the expiration of the term of service except for cause after public hearing.
43	43	2.13 Sec. 6. Minnesota Statutes 2024, section 3.971, subdivision 9, is amended to read:
44	44	2.14 Subd. 9.Obligation to notify the legislative auditor.The chief executive, financial,
45	45	2.15or information officers of an organization subject to audit under this section must promptly
46	46	2.16notify the legislative auditor when the officer obtains information indicating that (1) public
47	47	2.17money or other public resources may have been used for an unlawful purpose, or when the
48	48	2.18officer obtains information indicating that (2) government data classified by chapter 13 as
49	49	2.19not public may have been accessed by or provided to a person without lawful authorization.
50	50	2.20The legislative auditor must notify and coordinate with the inspector general when the
51	51	2.21legislative auditor receives a notification under clause (1). As necessary, the legislative
52	52	2.22auditor shall coordinate an investigation of the allegation with appropriate law enforcement
53	53	2.23officials.
54	54	2.24 Sec. 7. [3.99] DEFINITIONS.
55	55	2.25 Subdivision 1.Application.For purposes of sections 3.991 to 3.997, the following terms
56	56	2.26have the meanings given.
57	57	2.27 Subd. 2.Abuse."Abuse" means actions that may, directly or indirectly, result in
58	58	2.28unnecessary cost to a program. Abuse may involve paying for items or services when there
59	59	2.29is no legal entitlement to that payment.
60	60	2Article 1 Sec. 7.
61	61	25-02154 as introduced01/14/25 REVISOR SGS/HL 3.1 Subd. 3.Agency."Agency" means a department of the state designated under section
62	62	3.215.01.
63	63	3.3 Subd. 4.Fraud."Fraud" means an intentional or deliberate act to deprive another of
64	64	3.4property or money or to acquire property or money by deception or other unfair means.
65	65	3.5Fraud includes intentionally submitting false information to the state, a political subdivision,
66	66	3.6or a private entity under contract with the state or a political subdivision for the purpose of
67	67	3.7obtaining a greater compensation or benefit than that to which the person is legally entitled.
68	68	3.8Fraud also includes failure to correct errors in the maintenance of records in a timely manner
69	69	3.9after a request by the state.
70	70	3.10 Subd. 5.Inspector general."Inspector general" means the person appointed under
71	71	3.11section 3.991 or their designee.
72	72	3.12 Subd. 6.Investigation."Investigation" means an audit, investigation, proceeding, or
73	73	3.13inquiry by the office concerning a recipient of state funds.
74	74	3.14 Subd. 7.Office."Office" means the Office of the Inspector General.
75	75	3.15 Subd. 8.Program."Program" or "state program" means any program fully or partially
76	76	3.16administered or funded by the state.
77	77	3.17 Subd. 9.Recipient of state funds."Recipient of state funds" means any entity or person,
78	78	3.18including associated persons, that receives, disburses, or has custody of funds or other
79	79	3.19resources transferred or disbursed under a program. Recipient of state funds includes but
80	80	3.20is not limited to a private person or entity currently or formerly under contract with the state
81	81	3.21to provide benefits, goods, or services to eligible recipients.
82	82	3.22 Subd. 10.Waste."Waste" means practices that directly or indirectly result in unnecessary
83	83	3.23program cost, including but not limited to the misuse of resources.
84	84	3.24 Sec. 8. [3.991] OFFICE OF THE INSPECTOR GENERAL.
85	85	3.25 Subdivision 1.Establishment.The Office of the Inspector General is created as an
86	86	3.26agency in the legislative branch under the direction of the inspector general. The inspector
87	87	3.27general reports to the Legislative Audit Commission but may independently initiate
88	88	3.28investigations and allocate the resources of the office to effectively achieve the purpose in
89	89	3.29subdivision 2.
90	90	3.30 Subd. 2.Purpose.The inspector general must investigate and combat fraud, waste, and
91	91	3.31abuse in state government.
92	92	3Article 1 Sec. 8.
93	93	25-02154 as introduced01/14/25 REVISOR SGS/HL 4.1 Subd. 3.Inspector general appointment; term.(a) The Legislative Audit Commission
94	94	4.2must appoint an inspector general to serve in the unclassified service for a six-year term
95	95	4.3and until the commission appoints a successor. The commission may not remove an inspector
96	96	4.4general from office before the expiration of the term of service except for cause after public
97	97	4.5hearing. When in office, the inspector general may not at any time hold another public
98	98	4.6office. If a vacancy occurs for any reason during a term, the deputy inspector general must
99	99	4.7serve as acting inspector general until the commission appoints a new inspector general to
100	100	4.8serve the remainder of the term.
101	101	4.9 Subd. 4.Qualifications.The commission must select an inspector general without regard
102	102	4.10to political affiliation and on the basis of outstanding professional qualifications and
103	103	4.11demonstrated integrity, leadership, and ability in accounting, auditing, financial analysis,
104	104	4.12law, management analysis, public administration, investigation, criminal justice, or a related
105	105	4.13field. The inspector general must hold at the time of appointment, or be required by the
106	106	4.14commission to obtain within a time certain after appointment, certification from the
107	107	4.15Association of Inspectors General.
108	108	4.16 Sec. 9. [3.992] DUTIES.
109	109	4.17 The inspector general must:
110	110	4.18 (1) provide general direction and leadership for the office and its staff;
111	111	4.19 (2) hire and oversee a deputy inspector general, assistant inspectors general, and other
112	112	4.20staff as required to administer sections 3.99 to 3.997. Office of the Inspector General staff
113	113	4.21serve in the unclassified service;
114	114	4.22 (3) embed assistant inspectors general within the Departments of Children, Youth, and
115	115	4.23Families; Corrections; Education; Employment and Economic Development; Health; Human
116	116	4.24Services; and Labor and Industry;
117	117	4.25 (4) develop and maintain a telephone hotline for state agency staff and the public to
118	118	4.26report suspected fraud, waste, or abuse in state programs, and to do so anonymously if they
119	119	4.27so choose;
120	120	4.28 (5) establish procedures for evaluating and consistently responding to each tip received
121	121	4.29under clause (4);
122	122	4.30 (6) notify and coordinate with the legislative auditor regarding when the inspector general
123	123	4.31receives a report of suspected fraud, waste, or abuse;
124	124	4.32 (7) establish procedures for conducting investigations;
125	125	4Article 1 Sec. 9.
126	126	25-02154 as introduced01/14/25 REVISOR SGS/HL 5.1 (8) report suspected fraud or other misuse of public funds to the appropriate law
127	127	5.2enforcement entity and cooperate with law enforcement to assist in the investigation and
128	128	5.3any subsequent civil and criminal prosecution; and
129	129	5.4 (9) exercise all other powers reasonably necessary to implement and administer sections
130	130	5.53.99 to 3.997 and other applicable law.
131	131	5.6Procedures developed by the inspector general under clauses (5) and (7) are not subject to
132	132	5.7chapter 14, including section 14.386, but the inspector general must submit them to the
133	133	5.8Legislative Audit Commission for review at least 30 days prior to adoption or substantial
134	134	5.9revision.
135	135	5.10 Sec. 10. [3.993] POWERS.
136	136	5.11 Notwithstanding any law to the contrary, the inspector general may exercise the following
137	137	5.12powers as necessary to conduct investigations and achieve the purpose of sections 3.99 to
138	138	5.133.997:
139	139	5.14 (1) require the commissioner of an agency to provide full and unrestricted access to all
140	140	5.15government data, regardless of classification, created and maintained by the agency;
141	141	5.16 (2) require a recipient of state funds to provide full and unrestricted access to all records,
142	142	5.17reports, plans, contracts, memoranda, correspondence, and other relevant information created
143	143	5.18or maintained by the recipient;
144	144	5.19 (3) require a recipient of state funds to provide the inspector general, upon presentation
145	145	5.20of official credentials, access at reasonable times and without delay to sites and facilities
146	146	5.21owned or operated by the recipient;
147	147	5.22 (4) subpoena witnesses, administer oaths or affirmations, take testimony, and compel
148	148	5.23the production of the data specified under clauses (1) and (2) as the inspector general deems
149	149	5.24necessary;
150	150	5.25 (5) impose, or require a state agency to impose, appropriate temporary sanctions,
151	151	5.26including the withholding of payments to a recipient of state funds, if the inspector general
152	152	5.27receives or finds credible indicia of fraud, waste, or abuse by the recipient or there was a
153	153	5.28criminal, civil, or administrative adjudication of fraud, waste, or abuse against the recipient
154	154	5.29in Minnesota or in another state or jurisdiction;
155	155	5.30 (6) require state employees to fully cooperate with an investigation of suspected fraud,
156	156	5.31waste, and abuse;
157	157	5Article 1 Sec. 10.
158	158	25-02154 as introduced01/14/25 REVISOR SGS/HL 6.1 (7) offer and award monetary rewards to those who report suspected fraud, waste, or
159	159	6.2abuse under section 3.992, clause (4), if the inspector general's investigation confirms the
160	160	6.3existence of the alleged fraud, waste, or abuse;
161	161	6.4 (8) recommend remedial actions to be taken by an agency to overcome or correct
162	162	6.5operating or maintenance deficiencies and inefficiencies identified by the office;
163	163	6.6 (9) require agencies to provide suitable office space and facilities access for inspector
164	164	6.7general staff embedded within the agency; and
165	165	6.8 (10) monitor the implementation of recommendations issued by the office.
166	166	6.9 Sec. 11. [3.994] DATA PRACTICES.
167	167	6.10 (a) It is not a violation of rights conferred by chapter 13 or any other statute related to
168	168	6.11the confidentiality of government data for a government entity as defined in section 13.02
169	169	6.12to provide data or information to the inspector general under sections 3.99 to 3.997.
170	170	6.13 (b) The inspector general is subject to the Government Data Practices Act, chapter 13,
171	171	6.14and must protect from unlawful disclosure data classified as not public. Data collected,
172	172	6.15created, received, or maintained by the inspector general relating to an audit, investigation,
173	173	6.16proceeding, or inquiry are subject to section 13.39.
174	174	6.17 Sec. 12. [3.995] RETALIATION PROHIBITED.
175	175	6.18 An employee or other individual who discloses information to an agency or the inspector
176	176	6.19general about fraud, waste, or abuse in state programs is protected under section 181.932,
177	177	6.20governing disclosure of information by employees.
178	178	6.21 Sec. 13. [3.996] INTERFERENCE PROHIBITED.
179	179	6.22 No state employee may interfere with or obstruct an investigation conducted pursuant
180	180	6.23to sections 3.99 to 3.997.
181	181	6.24 Sec. 14. [3.997] REPORTING REQUIRED.
182	182	6.25 When the inspector general documents the existence of fraud or waste in an agency or
183	183	6.26program administered by an agency, the inspector general must quantify the amount of
184	184	6.27documented fraud or waste and report this amount to the Legislative Audit Commission
185	185	6.28and the chairs and ranking minority members of the legislative committees with jurisdiction
186	186	6.29over the agency's operating budget and the chairs must consider reducing the agency's
187	187	6.30operating budget by the same amount by law.
188	188	6Article 1 Sec. 14.
189	189	25-02154 as introduced01/14/25 REVISOR SGS/HL 7.1 Sec. 15. [15.442] DETECTION AND PREVENTION OF WASTE, FRAUD, AND
190	190	7.2ABUSE.
191	191	7.3 Subdivision 1.Suspected fraud; payment halted.Notwithstanding any law to the
192	192	7.4contrary, if the commissioner of a state agency has reason to suspect the existence of fraud
193	193	7.5in a program administered by the agency, the agency must:
194	194	7.6 (1) temporarily stop payment to, or on behalf of, the person or entity suspected of fraud;
195	195	7.7 (2) report the suspected fraud to the inspector general under section 3.991, and the
196	196	7.8commissioner of administration under subdivision 2;
197	197	7.9 (3) fully cooperate in any investigation conducted by the inspector general or law
198	198	7.10enforcement; and
199	199	7.11 (4) not resume payment unless the inspector general approves the resumption.
200	200	7.12 Subd. 2.Other payments prohibited.When a state agency reports suspected fraud
201	201	7.13under subdivision 1, the agency must notify the commissioner of administration and provide
202	202	7.14sufficient identifying information as required by the commissioner. The commissioner must
203	203	7.15notify designated personnel in other state agencies who are responsible for grants
204	204	7.16management, and no state agency may award or release funding to the person or entity
205	205	7.17suspected of fraud until authorized by the inspector general.
206	206	7.18 Subd. 3.Fraud hotline.(a) The commissioner of each state agency must prominently
207	207	7.19post on the agency's website the fraud reporting hotline administered by the Office of the
208	208	7.20Inspector General under chapter 3.
209	209	7.21 (b) As part of any grant agreement between the state and a nonprofit organization, the
210	210	7.22agreement must require the nonprofit organization to prominently post on the organization's
211	211	7.23website the fraud reporting hotline administered by the Office of the Inspector General
212	212	7.24under chapter 3. The state agency administering the grant must regularly confirm and
213	213	7.25document the organization's compliance with the requirement under this paragraph for the
214	214	7.26life of the grant agreement.
215	215	7.27 Subd. 4.Agency defined.For purposes of this section and section 15.443, "agency"
216	216	7.28means the departments of the state designated under section 15.01.
217	217	7.29 Sec. 16. [15.443] REPORT ON COMPLIANCE WITH LEGISLATIVE AUDITOR
218	218	7.30RECOMMENDA TIONS.
219	219	7.31 No later than September 30 each year, the commissioner of each state agency must report
220	220	7.32to the legislative auditor, in the form required by the legislative auditor, the status of any
221	221	7Article 1 Sec. 16.
222	222	25-02154 as introduced01/14/25 REVISOR SGS/HL 8.1recommendation issued by the legislative auditor for that agency during the current calendar
223	223	8.2year or the prior five calendar years.
224	224	8.3 Sec. 17. APPROPRIATION.
225	225	8.4 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
226	226	8.5fund to the inspector general for purposes of this act.
227	227	8.6 Sec. 18. APPROPRIATION.
228	228	8.7 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
229	229	8.8fund to the legislative auditor. The amount each year is in addition to the legislative auditor's
230	230	8.9base general fund budget.
231	231	8.10 ARTICLE 2
232	232	8.11 CONFORMING ITEMS AND REPEALERS
233	233	8.12 Section 1. Minnesota Statutes 2024, section 142B.53, is amended to read:
234	234	8.13 142B.53 MANDATORY REPORTING.
235	235	8.14 Any individual engaging in licensing functions and activities under this chapter, including
236	236	8.15authorities delegated under section 142B.30, must immediately report any suspected fraud
237	237	8.16to county children, youth, and families investigators or and the Department of Children,
238	238	8.17Youth, and Families Office of the Inspector General.
239	239	8.18 Sec. 2. Minnesota Statutes 2024, section 245A.24, is amended to read:
240	240	8.19 245A.24 MANDATORY REPORTING.
241	241	8.20 Any individual engaging in licensing functions and activities under this chapter, including
242	242	8.21authorities delegated under section 245A.16, must immediately report any suspected fraud
243	243	8.22to county human services investigators or the Department of Human Services Office of the
244	244	8.23Inspector General.
245	245	8.24 Sec. 3. Minnesota Statutes 2024, section 268.19, subdivision 1, is amended to read:
246	246	8.25 Subdivision 1.Use of data.(a) Except as provided by this section, data gathered from
247	247	8.26any person under the administration of the Minnesota Unemployment Insurance Law are
248	248	8.27private data on individuals or nonpublic data not on individuals as defined in section 13.02,
249	249	8.28subdivisions 9 and 12, and may not be disclosed except according to a district court order
250	250	8.29or section 13.05. A subpoena is not considered a district court order. These data may be
251	251	8Article 2 Sec. 3.
252	252	25-02154 as introduced01/14/25 REVISOR SGS/HL 9.1disseminated to and used by the following agencies without the consent of the subject of
253	253	9.2the data:
254	254	9.3 (1) state and federal agencies specifically authorized access to the data by state or federal
255	255	9.4law;
256	256	9.5 (2) any agency of any other state or any federal agency charged with the administration
257	257	9.6of an unemployment insurance program;
258	258	9.7 (3) any agency responsible for the maintenance of a system of public employment offices
259	259	9.8for the purpose of assisting individuals in obtaining employment;
260	260	9.9 (4) the public authority responsible for child support in Minnesota or any other state in
261	261	9.10accordance with section 518A.83;
262	262	9.11 (5) human rights agencies within Minnesota that have enforcement powers;
263	263	9.12 (6) the Department of Revenue to the extent necessary for its duties under Minnesota
264	264	9.13laws;
265	265	9.14 (7) public and private agencies responsible for administering publicly financed assistance
266	266	9.15programs for the purpose of monitoring the eligibility of the program's recipients;
267	267	9.16 (8) the Department of Labor and Industry and the Commerce Fraud Bureau in the
268	268	9.17Department of Commerce for uses consistent with the administration of their duties under
269	269	9.18Minnesota law;
270	270	9.19 (9) the Department of Human Services and, the Office of the Inspector General, and its
271	271	9.20agents within the Department of Human Services, including county fraud investigators, for
272	272	9.21investigations related to recipient or provider fraud and employees of providers when the
273	273	9.22provider is suspected of committing public assistance fraud;
274	274	9.23 (10) the Department of Human Services for the purpose of evaluating medical assistance
275	275	9.24services and supporting program improvement;
276	276	9.25 (11) local and state welfare agencies for monitoring the eligibility of the data subject
277	277	9.26for assistance programs, or for any employment or training program administered by those
278	278	9.27agencies, whether alone, in combination with another welfare agency, or in conjunction
279	279	9.28with the department or to monitor and evaluate the statewide Minnesota family investment
280	280	9.29program and other cash assistance programs, the Supplemental Nutrition Assistance Program,
281	281	9.30and the Supplemental Nutrition Assistance Program Employment and Training program by
282	282	9.31providing data on recipients and former recipients of Supplemental Nutrition Assistance
283	283	9.32Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child
284	284	9Article 2 Sec. 3.
285	285	25-02154 as introduced01/14/25 REVISOR SGS/HL 10.1care assistance under chapter 142E, or medical programs under chapter 256B or 256L or
286	286	10.2formerly codified under chapter 256D;
287	287	10.3 (12) local and state welfare agencies for the purpose of identifying employment, wages,
288	288	10.4and other information to assist in the collection of an overpayment debt in an assistance
289	289	10.5program;
290	290	10.6 (13) local, state, and federal law enforcement agencies for the purpose of ascertaining
291	291	10.7the last known address and employment location of an individual who is the subject of a
292	292	10.8criminal investigation;
293	293	10.9 (14) the United States Immigration and Customs Enforcement has access to data on
294	294	10.10specific individuals and specific employers provided the specific individual or specific
295	295	10.11employer is the subject of an investigation by that agency;
296	296	10.12 (15) the Department of Health for the purposes of epidemiologic investigations;
297	297	10.13 (16) the Department of Corrections for the purposes of case planning and internal research
298	298	10.14for preprobation, probation, and postprobation employment tracking of offenders sentenced
299	299	10.15to probation and preconfinement and postconfinement employment tracking of committed
300	300	10.16offenders;
301	301	10.17 (17) the state auditor to the extent necessary to conduct audits of job opportunity building
302	302	10.18zones as required under section 469.3201;
303	303	10.19 (18) the Office of Higher Education for purposes of supporting program improvement,
304	304	10.20system evaluation, and research initiatives including the Statewide Longitudinal Education
305	305	10.21Data System; and
306	306	10.22 (19) the Family and Medical Benefits Division of the Department of Employment and
307	307	10.23Economic Development to be used as necessary to administer chapter 268B.
308	308	10.24 (b) Data on individuals and employers that are collected, maintained, or used by the
309	309	10.25department in an investigation under section 268.182 are confidential as to data on individuals
310	310	10.26and protected nonpublic data not on individuals as defined in section 13.02, subdivisions 3
311	311	10.27and 13, and must not be disclosed except under statute or district court order or to a party
312	312	10.28named in a criminal proceeding, administrative or judicial, for preparation of a defense.
313	313	10.29 (c) Data gathered by the department in the administration of the Minnesota unemployment
314	314	10.30insurance program must not be made the subject or the basis for any suit in any civil
315	315	10.31proceedings, administrative or judicial, unless the action is initiated by the department.
316	316	10Article 2 Sec. 3.
317	317	25-02154 as introduced01/14/25 REVISOR SGS/HL 11.1 Sec. 4. Minnesota Statutes 2024, section 268B.30, is amended to read:
318	318	11.2 268B.30 DATA PRIVACY.
319	319	11.3 (a) Except as provided by this section, data collected, created, or maintained under this
320	320	11.4chapter are private data on individuals or nonpublic data not on individuals as defined in
321	321	11.5section 13.02, subdivisions 9 and 12, and must not be disclosed except according to a district
322	322	11.6court order or section 13.05. A subpoena is not considered a district court order.
323	323	11.7 (b) Data classified under paragraph (a) may be disseminated to and used by the following
324	324	11.8without the consent of the subject of the data:
325	325	11.9 (1) state and federal agencies specifically authorized access to the data by state or federal
326	326	11.10law;
327	327	11.11 (2) the unemployment insurance division, to the extent necessary to administer the
328	328	11.12programs established under this chapter and chapter 268;
329	329	11.13 (3) employers, to the extent necessary to support adjudication of application requests
330	330	11.14and to support the employer's administration of a leave of absence;
331	331	11.15 (4) health care providers, to the extent necessary to support verification of health care
332	332	11.16conditions and qualifying events;
333	333	11.17 (5) the public authority responsible for child support in Minnesota or any other state in
334	334	11.18accordance with section 518A.83;
335	335	11.19 (6) human rights agencies within Minnesota that have enforcement powers;
336	336	11.20 (7) the Department of Revenue, to the extent necessary for its duties under Minnesota
337	337	11.21laws;
338	338	11.22 (8) public and private agencies responsible for administering publicly financed assistance
339	339	11.23programs for the purpose of monitoring the eligibility of the program's recipients;
340	340	11.24 (9) the Department of Labor and Industry and the Commerce Fraud Bureau in the
341	341	11.25Department of Commerce for uses consistent with the administration of their duties under
342	342	11.26Minnesota law;
343	343	11.27 (10) the Department of Human Services and, the Office of the Inspector General, and
344	344	11.28its agents within the Department of Human Services, including county fraud investigators,
345	345	11.29for investigations related to recipient or provider fraud and employees of providers when
346	346	11.30the provider is suspected of committing public assistance fraud;
347	347	11.31 (11) the Department of Public Safety for support in identity verification;
348	348	11Article 2 Sec. 4.
349	349	25-02154 as introduced01/14/25 REVISOR SGS/HL 12.1 (12) local, state, and federal law enforcement agencies for the purpose of ascertaining
350	350	12.2the last known address and employment location of an individual who is the subject of a
351	351	12.3criminal investigation;
352	352	12.4 (13) the Department of Health for the purposes of epidemiologic investigations;
353	353	12.5 (14) the Department of Corrections for the purposes of tracking incarceration of
354	354	12.6applicants; and
355	355	12.7 (15) contracted third parties, to the extent necessary to aid in identity verification,
356	356	12.8adjudication, administration, and evaluation of the program.
357	357	12.9 (c) Data on individuals and employers that are collected, maintained, or used by the
358	358	12.10department in an investigation under section 268B.19, 268B.21, 268B.22, or 268B.23 are
359	359	12.11confidential as to data on individuals and protected nonpublic data not on individuals as
360	360	12.12defined in section 13.02, subdivisions 3 and 13, and must not be disclosed except under
361	361	12.13statute or district court order or to a party named in a criminal proceeding, administrative
362	362	12.14or judicial, for preparation of a defense.
363	363	12.15 (d) Data gathered by the department in the administration of this chapter must not be
364	364	12.16made the subject or the basis for any suit in any civil proceedings, administrative or judicial,
365	365	12.17unless the action is initiated by the department.
366	366	12.18Sec. 5. EXISTING OFFICES ABOLISHED; TRANSFERS PROVIDED.
367	367	12.19 Subdivision 1.Offices abolished.The Offices of Inspector General in the Departments
368	368	12.20of Education; Human Services; and Children, Youth, and Families are abolished effective
369	369	12.21the day after the inspector general under Minnesota Statutes, section 3.991, certifies in
370	370	12.22writing to the commissioner of the respective department and the commissioner of
371	371	12.23management and budget that the inspector general under Minnesota Statutes, section 3.991,
372	372	12.24has assumed oversight responsibility for the department.
373	373	12.25 Subd. 2.Transfer.Pursuant to Minnesota Statutes, section 15.039, all active
374	374	12.26investigations, obligations, personnel, court actions, contracts, records, and unexpended
375	375	12.27funds shall transfer from each department in subdivision 1 to the inspector general under
376	376	12.28Minnesota Statutes, section 3.991, at the time provided by the inspector general.
377	377	12.29Sec. 6. REPEALER.
378	378	12.30 Minnesota Statutes 2024, sections 13.321, subdivision 12; and 127A.21, are repealed.
379	379	12Article 2 Sec. 6.
380	380	25-02154 as introduced01/14/25 REVISOR SGS/HL 13.1 Sec. 7. EFFECTIVE DATE.
381	381	13.2 (a) Section 1 is effective the day after the inspector general notifies the revisor of statutes
382	382	13.3that the Office of the Inspector General has assumed oversight responsibility for the
383	383	13.4Department of Children, Youth, and Families.
384	384	13.5 (b) Sections 2 to 4 are effective the day after the inspector general notifies the revisor
385	385	13.6of statutes that the Office of the Inspector General has assumed oversight responsibility for
386	386	13.7the Department of Human Services.
387	387	13.8 (c) Section 5 is effective July 1, 2025.
388	388	13.9 (d) Section 6 is effective the day after the inspector general under Minnesota Statutes,
389	389	13.10section 3.991, notifies the revisor of statutes that the Office of the Inspector General under
390	390	13.11Minnesota Statutes, section 3.991, has assumed oversight responsibility for the Department
391	391	13.12of Education.
392	392	13Article 2 Sec. 7.
393	393	25-02154 as introduced01/14/25 REVISOR SGS/HL Page.Ln 1.11OFFICE OF THE INSPECTOR GENERAL.........................................ARTICLE 1
394	394	Page.Ln 8.10CONFORMING ITEMS AND REPEALERS.......................................ARTICLE 2
395	395	1
396	396	APPENDIX
397	397	Article locations for 25-02154 13.321 PREKINDERGAR TEN TO GRADE 12 EDUCATIONAL DATA CODED
398	398	ELSEWHERE.
399	399	Subd. 12.Office of the Inspector General; access to data.Data involving the Department of
400	400	Education's Office of the Inspector General are governed by section 127A.21.
401	401	127A.21 OFFICE OF THE INSPECTOR GENERAL.
402	402	Subdivision 1.Establishment of Office of the Inspector General; powers; duties.The
403	403	commissioner must establish within the department an Office of the Inspector General. The inspector
404	404	general shall report directly to the commissioner. The Office of the Inspector General is charged
405	405	with protecting the integrity of the department and the state by detecting and preventing fraud,
406	406	waste, and abuse in department programs. The Office of the Inspector General must conduct
407	407	independent and objective investigations to promote the integrity of the department's programs and
408	408	operations. When fraud or other misuse of public funds is detected, the Office of the Inspector
409	409	General must report it to the appropriate law enforcement entity and collaborate and cooperate with
410	410	law enforcement to assist in the investigation and any subsequent civil and criminal prosecution.
411	411	Subd. 1a.Definitions.(a) For purposes of this section, the following terms have the meanings
412	412	given.
413	413	(b) "Abuse" means actions that may, directly or indirectly, result in unnecessary costs to
414	414	department programs. Abuse may involve paying for items or services when there is no legal
415	415	entitlement to that payment.
416	416	(c) "Department program" means a program funded by the Department of Education that involves
417	417	the transfer or disbursement of public funds or other resources to a program participant. "Department
418	418	program" includes state and federal aids or grants received by a school district or charter school or
419	419	other program participant.
420	420	(d) "Fraud" means an intentional or deliberate act to deprive another of property or money or
421	421	to acquire property or money by deception or other unfair means. Fraud includes intentionally
422	422	submitting false information to the department for the purpose of obtaining a greater compensation
423	423	or benefit than that to which the person is legally entitled. Fraud also includes failure to correct
424	424	errors in the maintenance of records in a timely manner after a request by the department.
425	425	(e) "Investigation" means an audit, investigation, proceeding, or inquiry by the Office of the
426	426	Inspector General related to a program participant in a department program.
427	427	(f) "Program participant" means any entity or person, including associated persons, that receives,
428	428	disburses, or has custody of funds or other resources transferred or disbursed under a department
429	429	program.
430	430	(g) "Waste" means practices that, directly or indirectly, result in unnecessary costs to department
431	431	programs, such as misusing resources.
432	432	(h) For purposes of this section, neither "fraud," "waste," nor "abuse" includes decisions on
433	433	instruction, curriculum, personnel, or other discretionary policy decisions made by a school district,
434	434	charter school, cooperative unit as defined by section 123A.24, subdivision 2, or any library, library
435	435	system, or library district defined in section 134.001.
436	436	Subd. 2. Hiring; reporting; procedures.(a) The commissioner, or the commissioner's designee,
437	437	must hire an inspector general to lead the Office of the Inspector General. The inspector general
438	438	must hire a deputy inspector general and, at the discretion of the inspector general, sufficient assistant
439	439	inspectors general to carry out the duties of the office. The inspector general, deputy inspector
440	440	general, and any assistant inspectors general serve in the classified service.
441	441	(b) In a form and manner determined by the inspector general, the Office of the Inspector General
442	442	must develop a public platform for the public to report instances of potential fraud, waste, or abuse
443	443	of public funds administered by the department. Nothing in this paragraph shall be construed to
444	444	give a member of the public standing to sue based on allegations of fraud, waste, or abuse.
445	445	(c) The inspector general shall establish procedures for conducting investigations. Procedures
446	446	adopted under this subdivision are not subject to chapter 14, including section 14.386.
447	447	Subd. 3.Subpoenas.(a) For the purpose of an investigation, the inspector general or a designee
448	448	may administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence, and
449	449	issue subpoenas duces tecum to require the production of books, papers, correspondence, memoranda,
450	450	agreements, financial records, or other documents or records relevant to the investigation.
451	451	1R
452	452	APPENDIX
453	453	Repealed Minnesota Statutes: 25-02154 (b) A subpoena issued pursuant to this subdivision must state that the subpoena recipient may
454	454	not disclose the fact that the subpoena was issued or the fact that the requested records have been
455	455	given to the inspector general, or their staff, except:
456	456	(1) in so far as the disclosure is necessary to find and disclose the records;
457	457	(2) pursuant to court order; or
458	458	(3) to legal counsel for the purposes of responding to the subpoena.
459	459	(c) The fees for service of a subpoena must be paid in the same manner as prescribed by law
460	460	for a service of process issued by a district court.
461	461	(d) The subpoena issued under this subdivision shall be enforceable through the district court
462	462	in the district where the subpoena is issued.
463	463	Subd. 4.Access to records.(a) For purposes of an investigation, and regardless of the data's
464	464	classification under chapter 13, the Office of the Inspector General shall have access to all relevant
465	465	books, accounts, documents, data, and property related to department programs that are maintained
466	466	by a program participant, charter school, or government entity as defined by section 13.02.
467	467	(b) Notwithstanding paragraph (a), the Office of the Inspector General must issue a subpoena
468	468	under subdivision 3 in order to access routing and account numbers to which Department of
469	469	Education funds have been disbursed.
470	470	(c) Records requested by the Office of the Inspector General under this subdivision shall be
471	471	provided in a format, place, and time frame reasonably requested by the Office of the Inspector
472	472	General.
473	473	(d) The department may enter into specific agreements with other state agencies related to
474	474	records requests by the Office of the Inspector General.
475	475	Subd. 5.Sanctions; appeal.(a) This subdivision does not authorize any sanction that reduces,
476	476	pauses, or otherwise interrupts state or federal aid to a school district, charter school, cooperative
477	477	unit as defined by section 123A.24, subdivision 2, or any library, library system, or library district
478	478	defined in section 134.001.
479	479	(b) The inspector general may recommend that the commissioner impose appropriate temporary
480	480	sanctions, including withholding of payments under the department program, on a program participant
481	481	pending an investigation by the Office of the Inspector General if:
482	482	(1) during the course of an investigation, the Office of the Inspector General finds credible
483	483	indicia of fraud, waste, or abuse by the program participant;
484	484	(2) there has been a criminal, civil, or administrative adjudication of fraud, waste, or abuse
485	485	against the program participant in Minnesota or in another state or jurisdiction;
486	486	(3) the program participant was receiving funds under any contract or registered in any program
487	487	administered by another Minnesota state agency, a government agency in another state, or a federal
488	488	agency, and was excluded from that contract or program for reasons credibly indicating fraud,
489	489	waste, or abuse by the program participant; or
490	490	(4) the program participant has a pattern of noncompliance with an investigation.
491	491	(c) If an investigation finds, by a preponderance of the evidence, fraud, waste, or abuse by a
492	492	program participant, the inspector general may, after reviewing all facts and evidence and when
493	493	acting judiciously on a case-by-case basis, recommend that the commissioner impose appropriate
494	494	sanctions on the program participant.
495	495	(d) Unless prohibited by law, the commissioner has the authority to implement recommendations
496	496	by the inspector general, including imposing appropriate sanctions, temporarily or otherwise, on a
497	497	program participant. Sanctions may include ending program participation, stopping disbursement
498	498	of funds or resources, monetary recovery, and termination of department contracts with the participant
499	499	for any current or future department program or contract. A sanction may be imposed for up to the
500	500	longest period permitted by state or federal law. Sanctions authorized under this subdivision are in
501	501	addition to other remedies and penalties available under law.
502	502	(e) If the commissioner imposes sanctions on a program participant under this subdivision, the
503	503	commissioner must notify the participant in writing within seven business days of imposing the
504	504	sanction, unless requested in writing by a law enforcement agency to temporarily delay issuing the
505	505	2R
506	506	APPENDIX
507	507	Repealed Minnesota Statutes: 25-02154 notice to prevent disruption of an ongoing law enforcement agency investigation. A notice of
508	508	sanction must state:
509	509	(1) the sanction being imposed;
510	510	(2) the general allegations that form the basis for the sanction;
511	511	(3) the duration of the sanction;
512	512	(4) the department programs to which the sanction applies; and
513	513	(5) how the program participant may appeal the sanction pursuant to paragraph (e).
514	514	(f) A program participant sanctioned under this subdivision may, within 30 days after the date
515	515	the notice of sanction was mailed to the participant, appeal the determination by requesting in
516	516	writing that the commissioner initiate a contested case proceeding under chapter 14. The scope of
517	517	any contested case hearing is limited to the sanction imposed under this subdivision. An appeal
518	518	request must specify with particularity each disputed item, the reason for the dispute, and must
519	519	include the name and contact information of the person or entity that may be contacted regarding
520	520	the appeal.
521	521	(g) The commissioner shall lift sanctions imposed under this subdivision if the Office of the
522	522	Inspector General determines there is insufficient evidence of fraud, waste, or abuse by the program
523	523	participant. The commissioner must notify the participant in writing within seven business days of
524	524	lifting the sanction.
525	525	Subd. 6.Data practices.(a) It is not a violation of rights conferred by chapter 13 or any other
526	526	statute related to the confidentiality of government data for a government entity as defined in section
527	527	13.02 to provide data or information under this section.
528	528	(b) The inspector general is subject to the Government Data Practices Act, chapter 13, and shall
529	529	protect from unlawful disclosure data classified as not public. Data collected, created, received, or
530	530	maintained by the inspector general relating to an audit, investigation, proceeding, or inquiry are
531	531	subject to section 13.39.
532	532	Subd. 7.Retaliation, interference prohibited.(a) An employee or other individual who
533	533	discloses information to the Office of the Inspector General about fraud, waste, or abuse in
534	534	department programs is protected under section 181.932, governing disclosure of information by
535	535	employees.
536	536	(b) No state employee may interfere with or obstruct an investigation authorized by this section.
537	537	3R
538	538	APPENDIX
539	539	Repealed Minnesota Statutes: 25-02154