Senate unanimously passes grants-management bill with broader fraud-prevention powers

The Minnesota Senate on May 17 passed House File 3629, a grants-management bill amended to add multiple fraud-prevention measures, by a vote of 67-0.

Senator Hemmingson Yeager, the bill's author, said HF3629 narrows how the Department of Administration approves certain exemptions to policy requirements, adds reporting requirements and extends whistleblower protections in grant-related cases. "I find this a good, fraud prevention and detection measure and would appreciate support," the author said.

Senator Kroon described and offered the A5 amendment, which the body adopted. The amendment revises Minnesota Management and Budget authority to withhold payment from program participants suspected of fraud by lowering the evidentiary standard from a preponderance of the evidence to a "credible allegation of fraud" verified by the agency; it removes a 60-day limit on withholding; expands withholding authority to include individuals as program participants; allows agencies to disclose that they have withheld payments if doing so will not jeopardize an active investigation; and replaces judicial appeal to the Office of Administrative Hearings with administrative reconsideration by the agency. The amendment also makes the withholding authority permanent (the existing statute was set to expire on 07/01/2027 in the transcript).

Senator Rasmussen urged support on the floor, saying the package "will enhance program integrity and provide an important tool to stopping this massive fraud crisis." The bill sponsor thanked agency staff for technical assistance and indicated further work may follow to address implementation concerns.

The secretary recorded final passage as 67 ayes and 0 nays; the bill passed and its title was agreed to.

What changed: the adopted A5 amendment expands administrative tools for agencies to withhold payments on a lower evidentiary showing and shifts review remedies toward administrative reconsideration, while adding OIG reporting expectations for Department of Human Services components identified in the amendment.