State Auditor Calls For More Rigorous Grant Oversight

(KNSI) — Staff from the Office of the Legislative Auditor released a report this week on breakdowns that could have led to the $250 million Feeding Our Future scandal.

Since the 1970s, there have been requirements in place for state agencies issuing grants to monitor the awards to prevent abuse. They were written by the Department of Administration’s Office of Grant Management. Individual agencies are given some latitude to create rules to achieve OGM’s goals.

According to the auditor’s report, the Minnesota Department of Education Early Learning and Academic Standards divisions failed to meet the requirements in 13 of 16 grants issued in 2020 and 2021, totaling $99 million. Employees did not complete a thorough financial review prior to awarding the grants, failed to do a financial reconciliation of expenditures while the grants were active, and skipped in-person monitoring visits for 14 of 15 grants needing one.

The report also shows breakdowns happened at every stage of the grant cycle, from before they were awarded to closing them out. MDE provides an average of $81 million in state funded grants per year. The issues are especially bad for legislatively named grants compared to ones put out for competitive bids.

The auditor says the MDE must ensure grant managers are complying with required policies by providing more detailed direction through department-specific training.

Fifty people have been indicted in the scandal. Investigators say the defendants bilked the Federal Child Nutrition Program, which is overseen and administered in Minnesota by the MDE, for $250 million. The money was to be used as reimbursements to provide free meals to hungry kids but was laundered and squandered on homes, cars, and vacation properties.

U.S. Attorney Andrew M. Luger for the District of Minnesota called it a “brazen scheme of staggering proportions.”

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