A recent state audit revealed significant concerns about how Minnesota agencies under Democratic Governor Tim Walz’s administration have handled various programs, with allegations of waste, fraud, and mismanagement.
The audit findings have sparked criticism from lawmakers, particularly Republicans, who are calling out what they see as a lack of accountability and oversight.
The state’s nonpartisan auditor, Judy Randall, highlighted troubling issues across several key areas.
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One audit found that pandemic-era bonus checks meant for frontline workers were improperly distributed to ineligible recipients.
Another audit criticized a state agency for failing to prevent conflicts of interest in taxpayer-funded mental health and addiction programs.
A third audit pointed to lax oversight in a food aid program for needy children, which federal prosecutors have labeled as the largest COVID-era fraud scheme in the U.S., amounting to hundreds of millions in stolen funds.
Randall noted that her office has seen a shift in how some state agencies respond to audits. In an interview, she stated that there has been a “shoot the messenger” attitude, with some agencies minimizing or dismissing the concerns raised by the audits.
More than a dozen reports from Randall’s office during the Walz administration have documented cases of fraud, waste, and mismanagement within specific state agencies.
Some of the high-profile issues include the pandemic fraud allegations and cost overruns in a light-rail project, which has seen more than $1.5 billion in budget increases.
This project, although started before Walz’s tenure, is currently managed by 17 of his appointees.
Other audits have identified gaps in safeguards that led to financial mismanagement, as well as concerns about conflicts of interest, such as a public safety employee receiving payments from a grant recipient.
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In CNN’s review of audits, they found that Walz was directly to blame for looking the other way when it came to fraud in his state.
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Randall said there have been no personnel changes tied to these audits since Walz took office in 2019.
Critics argue that Walz bears responsibility for the ongoing fraud and waste. Lisa Demuth, the Republican leader of the state House, said, “When he is not holding any commissioners responsible, then yes, Governor Walz is responsible for the fraud that has been ongoing in the state of Minnesota.”
Some agencies have pushed back against the audit findings, showing signs of defensiveness. Randall pointed out that one agency, responsible for disbursing mental health and addiction grants, failed to address most of the concerns raised in a 2021 audit.
Other responses, such as the one from an audit about pandemic frontline worker bonuses, disagreed with the audit’s conclusions entirely.
The case of the fraudulent meal aid program for children—known as Feeding Our Future—has been particularly damaging. The Minnesota Department of Education, which oversees the program, was faulted in an audit for missing early warning signs of fraud.
Federal prosecutors say that $250 million was stolen in the scheme. More than 70 individuals have been charged, with 20 convicted so far.
The program was supposed to provide meals to children during the pandemic, but instead, funds were allegedly diverted for personal use, including luxury cars and lavish vacations.
Governor Walz acknowledged the failings in oversight, calling the audit of the education department a “fair critique.”
He added that while some employees did not do their due diligence, no state employees were implicated in illegal activities.
However, critics remain skeptical of Walz’s leadership on these issues. State Senator Mark Koran, a Republican who serves on the state’s legislative audit commission, said the resistance to transparency and accountability “is led by Governor Walz.”
Democrats’ control of the state government since the 2022 election has added to the frustration of those calling for more oversight.
Some political analysts in Minnesota agree that this political dynamic may have made it harder to hold the administration accountable.
As investigations continue, and with federal probes launched into additional fraud cases in the state, the pressure on Walz’s administration to address these issues shows no sign of easing.
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