1.1 A bill for an act
1.2 relating to state government; establishing an Office of the Inspector General;
1.3 providing powers; specifying duties; requiring a fraud reporting hotline; requiring
1.4 agencies to halt payments when fraud is suspected; eliminating agency-based
1.5 offices of inspector general; requiring a report; appropriating money; amending
1.6 Minnesota Statutes 2024, sections 3.97, subdivision 1, by adding subdivisions;
1.7 3.971, subdivisions 1, 9; 142B.53; 245A.24; 268.19, subdivision 1; 268B.30;
1.8 proposing coding for new law in Minnesota Statutes, chapters 3; 15; repealing
1.9 Minnesota Statutes 2024, sections 13.321, subdivision 12; 127A.21.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 ARTICLE 1
1.12 OFFICE OF THE INSPECTOR GENERAL
1.13 Section 1. Minnesota Statutes 2024, section 3.97, subdivision 1, is amended to read:
1.14 Subdivision 1.Policy.Continuous legislative review of the spending of public funds
1.15and financing at all levels of government is required in the public interest to enable the
1.16enactment of appropriate legislation. Fraud, waste, and abuse in public programs are
1.17unacceptable and must be prevented. If fraud occurs, it must be promptly identified and
1.18prosecuted to the fullest extent of the law.
1.19 Sec. 2. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
1.20 Subd. 3c.Appointment and oversight of the state inspector general.The commission
1.21must appoint and oversee the work of the inspector general as provided in sections 3.99 to
1.223.997.
1Article 1 Sec. 2.
25-02154 as introduced01/14/25 REVISOR SGS/HL
SENATE
STATE OF MINNESOTA
S.F. No. 1219NINETY-FOURTH SESSION
(SENATE AUTHORS: KORAN, Drazkowski, Bahr, Howe and Coleman)
OFFICIAL STATUSD-PGDATE
Introduction and first reading02/10/2025
Referred to State and Local Government 2.1 Sec. 3. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
2.2 Subd. 3d.Complementary.The commission must ensure that the work of the inspector
2.3general is complementary to, and not duplicative of, that of the legislative auditor.
2.4 Sec. 4. Minnesota Statutes 2024, section 3.97, is amended by adding a subdivision to read:
2.5 Subd. 3e.Executive secretaries.The legislative auditor and the inspector general are
2.6the executive secretaries of the commission.
2.7 Sec. 5. Minnesota Statutes 2024, section 3.971, subdivision 1, is amended to read:
2.8 Subdivision 1.Appointment and term.The legislative auditor is the executive secretary
2.9of the commission. The legislative auditor shall be appointed by the commission for a
2.10six-year term and serve in the unclassified service. When in office, the legislative auditor
2.11may not at any time hold any other public office. The legislative auditor may not be removed
2.12from office before the expiration of the term of service except for cause after public hearing.
2.13 Sec. 6. Minnesota Statutes 2024, section 3.971, subdivision 9, is amended to read:
2.14 Subd. 9.Obligation to notify the legislative auditor.The chief executive, financial,
2.15or information officers of an organization subject to audit under this section must promptly
2.16notify the legislative auditor when the officer obtains information indicating that (1) public
2.17money or other public resources may have been used for an unlawful purpose, or when the
2.18officer obtains information indicating that (2) government data classified by chapter 13 as
2.19not public may have been accessed by or provided to a person without lawful authorization.
2.20The legislative auditor must notify and coordinate with the inspector general when the
2.21legislative auditor receives a notification under clause (1). As necessary, the legislative
2.22auditor shall coordinate an investigation of the allegation with appropriate law enforcement
2.23officials.
2.24 Sec. 7. [3.99] DEFINITIONS.
2.25 Subdivision 1.Application.For purposes of sections 3.991 to 3.997, the following terms
2.26have the meanings given.
2.27 Subd. 2.Abuse."Abuse" means actions that may, directly or indirectly, result in
2.28unnecessary cost to a program. Abuse may involve paying for items or services when there
2.29is no legal entitlement to that payment.
2Article 1 Sec. 7.
25-02154 as introduced01/14/25 REVISOR SGS/HL 3.1 Subd. 3.Agency."Agency" means a department of the state designated under section
3.215.01.
3.3 Subd. 4.Fraud."Fraud" means an intentional or deliberate act to deprive another of
3.4property or money or to acquire property or money by deception or other unfair means.
3.5Fraud includes intentionally submitting false information to the state, a political subdivision,
3.6or a private entity under contract with the state or a political subdivision for the purpose of
3.7obtaining a greater compensation or benefit than that to which the person is legally entitled.
3.8Fraud also includes failure to correct errors in the maintenance of records in a timely manner
3.9after a request by the state.
3.10 Subd. 5.Inspector general."Inspector general" means the person appointed under
3.11section 3.991 or their designee.
3.12 Subd. 6.Investigation."Investigation" means an audit, investigation, proceeding, or
3.13inquiry by the office concerning a recipient of state funds.
3.14 Subd. 7.Office."Office" means the Office of the Inspector General.
3.15 Subd. 8.Program."Program" or "state program" means any program fully or partially
3.16administered or funded by the state.
3.17 Subd. 9.Recipient of state funds."Recipient of state funds" means any entity or person,
3.18including associated persons, that receives, disburses, or has custody of funds or other
3.19resources transferred or disbursed under a program. Recipient of state funds includes but
3.20is not limited to a private person or entity currently or formerly under contract with the state
3.21to provide benefits, goods, or services to eligible recipients.
3.22 Subd. 10.Waste."Waste" means practices that directly or indirectly result in unnecessary
3.23program cost, including but not limited to the misuse of resources.
3.24 Sec. 8. [3.991] OFFICE OF THE INSPECTOR GENERAL.
3.25 Subdivision 1.Establishment.The Office of the Inspector General is created as an
3.26agency in the legislative branch under the direction of the inspector general. The inspector
3.27general reports to the Legislative Audit Commission but may independently initiate
3.28investigations and allocate the resources of the office to effectively achieve the purpose in
3.29subdivision 2.
3.30 Subd. 2.Purpose.The inspector general must investigate and combat fraud, waste, and
3.31abuse in state government.
3Article 1 Sec. 8.
25-02154 as introduced01/14/25 REVISOR SGS/HL 4.1 Subd. 3.Inspector general appointment; term.(a) The Legislative Audit Commission
4.2must appoint an inspector general to serve in the unclassified service for a six-year term
4.3and until the commission appoints a successor. The commission may not remove an inspector
4.4general from office before the expiration of the term of service except for cause after public
4.5hearing. When in office, the inspector general may not at any time hold another public
4.6office. If a vacancy occurs for any reason during a term, the deputy inspector general must
4.7serve as acting inspector general until the commission appoints a new inspector general to
4.8serve the remainder of the term.
4.9 Subd. 4.Qualifications.The commission must select an inspector general without regard
4.10to political affiliation and on the basis of outstanding professional qualifications and
4.11demonstrated integrity, leadership, and ability in accounting, auditing, financial analysis,
4.12law, management analysis, public administration, investigation, criminal justice, or a related
4.13field. The inspector general must hold at the time of appointment, or be required by the
4.14commission to obtain within a time certain after appointment, certification from the
4.15Association of Inspectors General.
4.16 Sec. 9. [3.992] DUTIES.
4.17 The inspector general must:
4.18 (1) provide general direction and leadership for the office and its staff;
4.19 (2) hire and oversee a deputy inspector general, assistant inspectors general, and other
4.20staff as required to administer sections 3.99 to 3.997. Office of the Inspector General staff
4.21serve in the unclassified service;
4.22 (3) embed assistant inspectors general within the Departments of Children, Youth, and
4.23Families; Corrections; Education; Employment and Economic Development; Health; Human
4.24Services; and Labor and Industry;
4.25 (4) develop and maintain a telephone hotline for state agency staff and the public to
4.26report suspected fraud, waste, or abuse in state programs, and to do so anonymously if they
4.27so choose;
4.28 (5) establish procedures for evaluating and consistently responding to each tip received
4.29under clause (4);
4.30 (6) notify and coordinate with the legislative auditor regarding when the inspector general
4.31receives a report of suspected fraud, waste, or abuse;
4.32 (7) establish procedures for conducting investigations;
4Article 1 Sec. 9.
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
5.2enforcement entity and cooperate with law enforcement to assist in the investigation and
5.3any subsequent civil and criminal prosecution; and
5.4 (9) exercise all other powers reasonably necessary to implement and administer sections
5.53.99 to 3.997 and other applicable law.
5.6Procedures developed by the inspector general under clauses (5) and (7) are not subject to
5.7chapter 14, including section 14.386, but the inspector general must submit them to the
5.8Legislative Audit Commission for review at least 30 days prior to adoption or substantial
5.9revision.
5.10 Sec. 10. [3.993] POWERS.
5.11 Notwithstanding any law to the contrary, the inspector general may exercise the following
5.12powers as necessary to conduct investigations and achieve the purpose of sections 3.99 to
5.133.997:
5.14 (1) require the commissioner of an agency to provide full and unrestricted access to all
5.15government data, regardless of classification, created and maintained by the agency;
5.16 (2) require a recipient of state funds to provide full and unrestricted access to all records,
5.17reports, plans, contracts, memoranda, correspondence, and other relevant information created
5.18or maintained by the recipient;
5.19 (3) require a recipient of state funds to provide the inspector general, upon presentation
5.20of official credentials, access at reasonable times and without delay to sites and facilities
5.21owned or operated by the recipient;
5.22 (4) subpoena witnesses, administer oaths or affirmations, take testimony, and compel
5.23the production of the data specified under clauses (1) and (2) as the inspector general deems
5.24necessary;
5.25 (5) impose, or require a state agency to impose, appropriate temporary sanctions,
5.26including the withholding of payments to a recipient of state funds, if the inspector general
5.27receives or finds credible indicia of fraud, waste, or abuse by the recipient or there was a
5.28criminal, civil, or administrative adjudication of fraud, waste, or abuse against the recipient
5.29in Minnesota or in another state or jurisdiction;
5.30 (6) require state employees to fully cooperate with an investigation of suspected fraud,
5.31waste, and abuse;
5Article 1 Sec. 10.
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
6.2abuse under section 3.992, clause (4), if the inspector general's investigation confirms the
6.3existence of the alleged fraud, waste, or abuse;
6.4 (8) recommend remedial actions to be taken by an agency to overcome or correct
6.5operating or maintenance deficiencies and inefficiencies identified by the office;
6.6 (9) require agencies to provide suitable office space and facilities access for inspector
6.7general staff embedded within the agency; and
6.8 (10) monitor the implementation of recommendations issued by the office.
6.9 Sec. 11. [3.994] DATA PRACTICES.
6.10 (a) It is not a violation of rights conferred by chapter 13 or any other statute related to
6.11the confidentiality of government data for a government entity as defined in section 13.02
6.12to provide data or information to the inspector general under sections 3.99 to 3.997.
6.13 (b) The inspector general is subject to the Government Data Practices Act, chapter 13,
6.14and must protect from unlawful disclosure data classified as not public. Data collected,
6.15created, received, or maintained by the inspector general relating to an audit, investigation,
6.16proceeding, or inquiry are subject to section 13.39.
6.17 Sec. 12. [3.995] RETALIATION PROHIBITED.
6.18 An employee or other individual who discloses information to an agency or the inspector
6.19general about fraud, waste, or abuse in state programs is protected under section 181.932,
6.20governing disclosure of information by employees.
6.21 Sec. 13. [3.996] INTERFERENCE PROHIBITED.
6.22 No state employee may interfere with or obstruct an investigation conducted pursuant
6.23to sections 3.99 to 3.997.
6.24 Sec. 14. [3.997] REPORTING REQUIRED.
6.25 When the inspector general documents the existence of fraud or waste in an agency or
6.26program administered by an agency, the inspector general must quantify the amount of
6.27documented fraud or waste and report this amount to the Legislative Audit Commission
6.28and the chairs and ranking minority members of the legislative committees with jurisdiction
6.29over the agency's operating budget and the chairs must consider reducing the agency's
6.30operating budget by the same amount by law.
6Article 1 Sec. 14.
25-02154 as introduced01/14/25 REVISOR SGS/HL 7.1 Sec. 15. [15.442] DETECTION AND PREVENTION OF WASTE, FRAUD, AND
7.2ABUSE.
7.3 Subdivision 1.Suspected fraud; payment halted.Notwithstanding any law to the
7.4contrary, if the commissioner of a state agency has reason to suspect the existence of fraud
7.5in a program administered by the agency, the agency must:
7.6 (1) temporarily stop payment to, or on behalf of, the person or entity suspected of fraud;
7.7 (2) report the suspected fraud to the inspector general under section 3.991, and the
7.8commissioner of administration under subdivision 2;
7.9 (3) fully cooperate in any investigation conducted by the inspector general or law
7.10enforcement; and
7.11 (4) not resume payment unless the inspector general approves the resumption.
7.12 Subd. 2.Other payments prohibited.When a state agency reports suspected fraud
7.13under subdivision 1, the agency must notify the commissioner of administration and provide
7.14sufficient identifying information as required by the commissioner. The commissioner must
7.15notify designated personnel in other state agencies who are responsible for grants
7.16management, and no state agency may award or release funding to the person or entity
7.17suspected of fraud until authorized by the inspector general.
7.18 Subd. 3.Fraud hotline.(a) The commissioner of each state agency must prominently
7.19post on the agency's website the fraud reporting hotline administered by the Office of the
7.20Inspector General under chapter 3.
7.21 (b) As part of any grant agreement between the state and a nonprofit organization, the
7.22agreement must require the nonprofit organization to prominently post on the organization's
7.23website the fraud reporting hotline administered by the Office of the Inspector General
7.24under chapter 3. The state agency administering the grant must regularly confirm and
7.25document the organization's compliance with the requirement under this paragraph for the
7.26life of the grant agreement.
7.27 Subd. 4.Agency defined.For purposes of this section and section 15.443, "agency"
7.28means the departments of the state designated under section 15.01.
7.29 Sec. 16. [15.443] REPORT ON COMPLIANCE WITH LEGISLATIVE AUDITOR
7.30RECOMMENDA TIONS.
7.31 No later than September 30 each year, the commissioner of each state agency must report
7.32to the legislative auditor, in the form required by the legislative auditor, the status of any
7Article 1 Sec. 16.
25-02154 as introduced01/14/25 REVISOR SGS/HL 8.1recommendation issued by the legislative auditor for that agency during the current calendar
8.2year or the prior five calendar years.
8.3 Sec. 17. APPROPRIATION.
8.4 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
8.5fund to the inspector general for purposes of this act.
8.6 Sec. 18. APPROPRIATION.
8.7 $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the general
8.8fund to the legislative auditor. The amount each year is in addition to the legislative auditor's
8.9base general fund budget.
8.10 ARTICLE 2
8.11 CONFORMING ITEMS AND REPEALERS
8.12 Section 1. Minnesota Statutes 2024, section 142B.53, is amended to read:
8.13 142B.53 MANDATORY REPORTING.
8.14 Any individual engaging in licensing functions and activities under this chapter, including
8.15authorities delegated under section 142B.30, must immediately report any suspected fraud
8.16to county children, youth, and families investigators or and the Department of Children,
8.17Youth, and Families Office of the Inspector General.
8.18 Sec. 2. Minnesota Statutes 2024, section 245A.24, is amended to read:
8.19 245A.24 MANDATORY REPORTING.
8.20 Any individual engaging in licensing functions and activities under this chapter, including
8.21authorities delegated under section 245A.16, must immediately report any suspected fraud
8.22to county human services investigators or the Department of Human Services Office of the
8.23Inspector General.
8.24 Sec. 3. Minnesota Statutes 2024, section 268.19, subdivision 1, is amended to read:
8.25 Subdivision 1.Use of data.(a) Except as provided by this section, data gathered from
8.26any person under the administration of the Minnesota Unemployment Insurance Law are
8.27private data on individuals or nonpublic data not on individuals as defined in section 13.02,
8.28subdivisions 9 and 12, and may not be disclosed except according to a district court order
8.29or section 13.05. A subpoena is not considered a district court order. These data may be
8Article 2 Sec. 3.
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
9.2the data:
9.3 (1) state and federal agencies specifically authorized access to the data by state or federal
9.4law;
9.5 (2) any agency of any other state or any federal agency charged with the administration
9.6of an unemployment insurance program;
9.7 (3) any agency responsible for the maintenance of a system of public employment offices
9.8for the purpose of assisting individuals in obtaining employment;
9.9 (4) the public authority responsible for child support in Minnesota or any other state in
9.10accordance with section 518A.83;
9.11 (5) human rights agencies within Minnesota that have enforcement powers;
9.12 (6) the Department of Revenue to the extent necessary for its duties under Minnesota
9.13laws;
9.14 (7) public and private agencies responsible for administering publicly financed assistance
9.15programs for the purpose of monitoring the eligibility of the program's recipients;
9.16 (8) the Department of Labor and Industry and the Commerce Fraud Bureau in the
9.17Department of Commerce for uses consistent with the administration of their duties under
9.18Minnesota law;
9.19 (9) the Department of Human Services and, the Office of the Inspector General, and its
9.20agents within the Department of Human Services, including county fraud investigators, for
9.21investigations related to recipient or provider fraud and employees of providers when the
9.22provider is suspected of committing public assistance fraud;
9.23 (10) the Department of Human Services for the purpose of evaluating medical assistance
9.24services and supporting program improvement;
9.25 (11) local and state welfare agencies for monitoring the eligibility of the data subject
9.26for assistance programs, or for any employment or training program administered by those
9.27agencies, whether alone, in combination with another welfare agency, or in conjunction
9.28with the department or to monitor and evaluate the statewide Minnesota family investment
9.29program and other cash assistance programs, the Supplemental Nutrition Assistance Program,
9.30and the Supplemental Nutrition Assistance Program Employment and Training program by
9.31providing data on recipients and former recipients of Supplemental Nutrition Assistance
9.32Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child
9Article 2 Sec. 3.
25-02154 as introduced01/14/25 REVISOR SGS/HL 10.1care assistance under chapter 142E, or medical programs under chapter 256B or 256L or
10.2formerly codified under chapter 256D;
10.3 (12) local and state welfare agencies for the purpose of identifying employment, wages,
10.4and other information to assist in the collection of an overpayment debt in an assistance
10.5program;
10.6 (13) local, state, and federal law enforcement agencies for the purpose of ascertaining
10.7the last known address and employment location of an individual who is the subject of a
10.8criminal investigation;
10.9 (14) the United States Immigration and Customs Enforcement has access to data on
10.10specific individuals and specific employers provided the specific individual or specific
10.11employer is the subject of an investigation by that agency;
10.12 (15) the Department of Health for the purposes of epidemiologic investigations;
10.13 (16) the Department of Corrections for the purposes of case planning and internal research
10.14for preprobation, probation, and postprobation employment tracking of offenders sentenced
10.15to probation and preconfinement and postconfinement employment tracking of committed
10.16offenders;
10.17 (17) the state auditor to the extent necessary to conduct audits of job opportunity building
10.18zones as required under section 469.3201;
10.19 (18) the Office of Higher Education for purposes of supporting program improvement,
10.20system evaluation, and research initiatives including the Statewide Longitudinal Education
10.21Data System; and
10.22 (19) the Family and Medical Benefits Division of the Department of Employment and
10.23Economic Development to be used as necessary to administer chapter 268B.
10.24 (b) Data on individuals and employers that are collected, maintained, or used by the
10.25department in an investigation under section 268.182 are confidential as to data on individuals
10.26and protected nonpublic data not on individuals as defined in section 13.02, subdivisions 3
10.27and 13, and must not be disclosed except under statute or district court order or to a party
10.28named in a criminal proceeding, administrative or judicial, for preparation of a defense.
10.29 (c) Data gathered by the department in the administration of the Minnesota unemployment
10.30insurance program must not be made the subject or the basis for any suit in any civil
10.31proceedings, administrative or judicial, unless the action is initiated by the department.
10Article 2 Sec. 3.
25-02154 as introduced01/14/25 REVISOR SGS/HL 11.1 Sec. 4. Minnesota Statutes 2024, section 268B.30, is amended to read:
11.2 268B.30 DATA PRIVACY.
11.3 (a) Except as provided by this section, data collected, created, or maintained under this
11.4chapter are private data on individuals or nonpublic data not on individuals as defined in
11.5section 13.02, subdivisions 9 and 12, and must not be disclosed except according to a district
11.6court order or section 13.05. A subpoena is not considered a district court order.
11.7 (b) Data classified under paragraph (a) may be disseminated to and used by the following
11.8without the consent of the subject of the data:
11.9 (1) state and federal agencies specifically authorized access to the data by state or federal
11.10law;
11.11 (2) the unemployment insurance division, to the extent necessary to administer the
11.12programs established under this chapter and chapter 268;
11.13 (3) employers, to the extent necessary to support adjudication of application requests
11.14and to support the employer's administration of a leave of absence;
11.15 (4) health care providers, to the extent necessary to support verification of health care
11.16conditions and qualifying events;
11.17 (5) the public authority responsible for child support in Minnesota or any other state in
11.18accordance with section 518A.83;
11.19 (6) human rights agencies within Minnesota that have enforcement powers;
11.20 (7) the Department of Revenue, to the extent necessary for its duties under Minnesota
11.21laws;
11.22 (8) public and private agencies responsible for administering publicly financed assistance
11.23programs for the purpose of monitoring the eligibility of the program's recipients;
11.24 (9) the Department of Labor and Industry and the Commerce Fraud Bureau in the
11.25Department of Commerce for uses consistent with the administration of their duties under
11.26Minnesota law;
11.27 (10) the Department of Human Services and, the Office of the Inspector General, and
11.28its agents within the Department of Human Services, including county fraud investigators,
11.29for investigations related to recipient or provider fraud and employees of providers when
11.30the provider is suspected of committing public assistance fraud;
11.31 (11) the Department of Public Safety for support in identity verification;
11Article 2 Sec. 4.
25-02154 as introduced01/14/25 REVISOR SGS/HL 12.1 (12) local, state, and federal law enforcement agencies for the purpose of ascertaining
12.2the last known address and employment location of an individual who is the subject of a
12.3criminal investigation;
12.4 (13) the Department of Health for the purposes of epidemiologic investigations;
12.5 (14) the Department of Corrections for the purposes of tracking incarceration of
12.6applicants; and
12.7 (15) contracted third parties, to the extent necessary to aid in identity verification,
12.8adjudication, administration, and evaluation of the program.
12.9 (c) Data on individuals and employers that are collected, maintained, or used by the
12.10department in an investigation under section 268B.19, 268B.21, 268B.22, or 268B.23 are
12.11confidential as to data on individuals and protected nonpublic data not on individuals as
12.12defined in section 13.02, subdivisions 3 and 13, and must not be disclosed except under
12.13statute or district court order or to a party named in a criminal proceeding, administrative
12.14or judicial, for preparation of a defense.
12.15 (d) Data gathered by the department in the administration of this chapter must not be
12.16made the subject or the basis for any suit in any civil proceedings, administrative or judicial,
12.17unless the action is initiated by the department.
12.18Sec. 5. EXISTING OFFICES ABOLISHED; TRANSFERS PROVIDED.
12.19 Subdivision 1.Offices abolished.The Offices of Inspector General in the Departments
12.20of Education; Human Services; and Children, Youth, and Families are abolished effective
12.21the day after the inspector general under Minnesota Statutes, section 3.991, certifies in
12.22writing to the commissioner of the respective department and the commissioner of
12.23management and budget that the inspector general under Minnesota Statutes, section 3.991,
12.24has assumed oversight responsibility for the department.
12.25 Subd. 2.Transfer.Pursuant to Minnesota Statutes, section 15.039, all active
12.26investigations, obligations, personnel, court actions, contracts, records, and unexpended
12.27funds shall transfer from each department in subdivision 1 to the inspector general under
12.28Minnesota Statutes, section 3.991, at the time provided by the inspector general.
12.29Sec. 6. REPEALER.
12.30 Minnesota Statutes 2024, sections 13.321, subdivision 12; and 127A.21, are repealed.
12Article 2 Sec. 6.
25-02154 as introduced01/14/25 REVISOR SGS/HL 13.1 Sec. 7. EFFECTIVE DATE.
13.2 (a) Section 1 is effective the day after the inspector general notifies the revisor of statutes
13.3that the Office of the Inspector General has assumed oversight responsibility for the
13.4Department of Children, Youth, and Families.
13.5 (b) Sections 2 to 4 are effective the day after the inspector general notifies the revisor
13.6of statutes that the Office of the Inspector General has assumed oversight responsibility for
13.7the Department of Human Services.
13.8 (c) Section 5 is effective July 1, 2025.
13.9 (d) Section 6 is effective the day after the inspector general under Minnesota Statutes,
13.10section 3.991, notifies the revisor of statutes that the Office of the Inspector General under
13.11Minnesota Statutes, section 3.991, has assumed oversight responsibility for the Department
13.12of Education.
13Article 2 Sec. 7.
25-02154 as introduced01/14/25 REVISOR SGS/HL Page.Ln 1.11OFFICE OF THE INSPECTOR GENERAL.........................................ARTICLE 1
Page.Ln 8.10CONFORMING ITEMS AND REPEALERS.......................................ARTICLE 2
1
APPENDIX
Article locations for 25-02154 13.321 PREKINDERGAR TEN TO GRADE 12 EDUCATIONAL DATA CODED
ELSEWHERE.
Subd. 12.Office of the Inspector General; access to data.Data involving the Department of
Education's Office of the Inspector General are governed by section 127A.21.
127A.21 OFFICE OF THE INSPECTOR GENERAL.
Subdivision 1.Establishment of Office of the Inspector General; powers; duties.The
commissioner must establish within the department an Office of the Inspector General. The inspector
general shall report directly to the commissioner. The Office of the Inspector General is charged
with protecting the integrity of the department and the state by detecting and preventing fraud,
waste, and abuse in department programs. The Office of the Inspector General must conduct
independent and objective investigations to promote the integrity of the department's programs and
operations. When fraud or other misuse of public funds is detected, the Office of the Inspector
General must report it to the appropriate law enforcement entity and collaborate and cooperate with
law enforcement to assist in the investigation and any subsequent civil and criminal prosecution.
Subd. 1a.Definitions.(a) For purposes of this section, the following terms have the meanings
given.
(b) "Abuse" means actions that may, directly or indirectly, result in unnecessary costs to
department programs. Abuse may involve paying for items or services when there is no legal
entitlement to that payment.
(c) "Department program" means a program funded by the Department of Education that involves
the transfer or disbursement of public funds or other resources to a program participant. "Department
program" includes state and federal aids or grants received by a school district or charter school or
other program participant.
(d) "Fraud" means an intentional or deliberate act to deprive another of property or money or
to acquire property or money by deception or other unfair means. Fraud includes intentionally
submitting false information to the department for the purpose of obtaining a greater compensation
or benefit than that to which the person is legally entitled. Fraud also includes failure to correct
errors in the maintenance of records in a timely manner after a request by the department.
(e) "Investigation" means an audit, investigation, proceeding, or inquiry by the Office of the
Inspector General related to a program participant in a department program.
(f) "Program participant" means any entity or person, including associated persons, that receives,
disburses, or has custody of funds or other resources transferred or disbursed under a department
program.
(g) "Waste" means practices that, directly or indirectly, result in unnecessary costs to department
programs, such as misusing resources.
(h) For purposes of this section, neither "fraud," "waste," nor "abuse" includes decisions on
instruction, curriculum, personnel, or other discretionary policy decisions made by a school district,
charter school, cooperative unit as defined by section 123A.24, subdivision 2, or any library, library
system, or library district defined in section 134.001.
Subd. 2. Hiring; reporting; procedures.(a) The commissioner, or the commissioner's designee,
must hire an inspector general to lead the Office of the Inspector General. The inspector general
must hire a deputy inspector general and, at the discretion of the inspector general, sufficient assistant
inspectors general to carry out the duties of the office. The inspector general, deputy inspector
general, and any assistant inspectors general serve in the classified service.
(b) In a form and manner determined by the inspector general, the Office of the Inspector General
must develop a public platform for the public to report instances of potential fraud, waste, or abuse
of public funds administered by the department. Nothing in this paragraph shall be construed to
give a member of the public standing to sue based on allegations of fraud, waste, or abuse.
(c) The inspector general shall establish procedures for conducting investigations. Procedures
adopted under this subdivision are not subject to chapter 14, including section 14.386.
Subd. 3.Subpoenas.(a) For the purpose of an investigation, the inspector general or a designee
may administer oaths and affirmations, subpoena witnesses, compel attendance, take evidence, and
issue subpoenas duces tecum to require the production of books, papers, correspondence, memoranda,
agreements, financial records, or other documents or records relevant to the investigation.
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Repealed Minnesota Statutes: 25-02154 (b) A subpoena issued pursuant to this subdivision must state that the subpoena recipient may
not disclose the fact that the subpoena was issued or the fact that the requested records have been
given to the inspector general, or their staff, except:
(1) in so far as the disclosure is necessary to find and disclose the records;
(2) pursuant to court order; or
(3) to legal counsel for the purposes of responding to the subpoena.
(c) The fees for service of a subpoena must be paid in the same manner as prescribed by law
for a service of process issued by a district court.
(d) The subpoena issued under this subdivision shall be enforceable through the district court
in the district where the subpoena is issued.
Subd. 4.Access to records.(a) For purposes of an investigation, and regardless of the data's
classification under chapter 13, the Office of the Inspector General shall have access to all relevant
books, accounts, documents, data, and property related to department programs that are maintained
by a program participant, charter school, or government entity as defined by section 13.02.
(b) Notwithstanding paragraph (a), the Office of the Inspector General must issue a subpoena
under subdivision 3 in order to access routing and account numbers to which Department of
Education funds have been disbursed.
(c) Records requested by the Office of the Inspector General under this subdivision shall be
provided in a format, place, and time frame reasonably requested by the Office of the Inspector
General.
(d) The department may enter into specific agreements with other state agencies related to
records requests by the Office of the Inspector General.
Subd. 5.Sanctions; appeal.(a) This subdivision does not authorize any sanction that reduces,
pauses, or otherwise interrupts state or federal aid to a school district, charter school, cooperative
unit as defined by section 123A.24, subdivision 2, or any library, library system, or library district
defined in section 134.001.
(b) The inspector general may recommend that the commissioner impose appropriate temporary
sanctions, including withholding of payments under the department program, on a program participant
pending an investigation by the Office of the Inspector General if:
(1) during the course of an investigation, the Office of the Inspector General finds credible
indicia of fraud, waste, or abuse by the program participant;
(2) there has been a criminal, civil, or administrative adjudication of fraud, waste, or abuse
against the program participant in Minnesota or in another state or jurisdiction;
(3) the program participant was receiving funds under any contract or registered in any program
administered by another Minnesota state agency, a government agency in another state, or a federal
agency, and was excluded from that contract or program for reasons credibly indicating fraud,
waste, or abuse by the program participant; or
(4) the program participant has a pattern of noncompliance with an investigation.
(c) If an investigation finds, by a preponderance of the evidence, fraud, waste, or abuse by a
program participant, the inspector general may, after reviewing all facts and evidence and when
acting judiciously on a case-by-case basis, recommend that the commissioner impose appropriate
sanctions on the program participant.
(d) Unless prohibited by law, the commissioner has the authority to implement recommendations
by the inspector general, including imposing appropriate sanctions, temporarily or otherwise, on a
program participant. Sanctions may include ending program participation, stopping disbursement
of funds or resources, monetary recovery, and termination of department contracts with the participant
for any current or future department program or contract. A sanction may be imposed for up to the
longest period permitted by state or federal law. Sanctions authorized under this subdivision are in
addition to other remedies and penalties available under law.
(e) If the commissioner imposes sanctions on a program participant under this subdivision, the
commissioner must notify the participant in writing within seven business days of imposing the
sanction, unless requested in writing by a law enforcement agency to temporarily delay issuing the
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Repealed Minnesota Statutes: 25-02154 notice to prevent disruption of an ongoing law enforcement agency investigation. A notice of
sanction must state:
(1) the sanction being imposed;
(2) the general allegations that form the basis for the sanction;
(3) the duration of the sanction;
(4) the department programs to which the sanction applies; and
(5) how the program participant may appeal the sanction pursuant to paragraph (e).
(f) A program participant sanctioned under this subdivision may, within 30 days after the date
the notice of sanction was mailed to the participant, appeal the determination by requesting in
writing that the commissioner initiate a contested case proceeding under chapter 14. The scope of
any contested case hearing is limited to the sanction imposed under this subdivision. An appeal
request must specify with particularity each disputed item, the reason for the dispute, and must
include the name and contact information of the person or entity that may be contacted regarding
the appeal.
(g) The commissioner shall lift sanctions imposed under this subdivision if the Office of the
Inspector General determines there is insufficient evidence of fraud, waste, or abuse by the program
participant. The commissioner must notify the participant in writing within seven business days of
lifting the sanction.
Subd. 6.Data practices.(a) It is not a violation of rights conferred by chapter 13 or any other
statute related to the confidentiality of government data for a government entity as defined in section
13.02 to provide data or information under this section.
(b) The inspector general is subject to the Government Data Practices Act, chapter 13, and shall
protect from unlawful disclosure data classified as not public. Data collected, created, received, or
maintained by the inspector general relating to an audit, investigation, proceeding, or inquiry are
subject to section 13.39.
Subd. 7.Retaliation, interference prohibited.(a) An employee or other individual who
discloses information to the Office of the Inspector General about fraud, waste, or abuse in
department programs is protected under section 181.932, governing disclosure of information by
employees.
(b) No state employee may interfere with or obstruct an investigation authorized by this section.
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Repealed Minnesota Statutes: 25-02154