Audit finds Minnesota agency’s lax oversight fostered theft of $250M

MINNEAPOLIS — A Minnesota agency’s inadequate oversight of a federal program that was meant to provide food to kids, and its failure to act on red flags, created the opportunities that led to the theft of $250 million in one of the country’s largest pandemic aid fraud cases, the Legislature’s watchdog arm said Thursday in a scathing report.

The Minnesota Department of Education “failed to act on warning signs known to the department prior to the onset of the COVID-19 pandemic and prior to the start of the alleged fraud, did not effectively exercise its authority to hold Feeding Our Future accountable to program requirements, and was ill-prepared to respond to the issues it encountered with Feeding Our Future,” the nonpartisan Office of the Legislative Auditor concluded.

Seventy people have been charged in federal court for their alleged roles in a scheme prosecutors say centered on a nonprofit called Feeding Our Future. Five of the first seven defendants to stand trial were convicted Friday. The trial gained widespread attention after someone tried to bribe a juror with a bag of $120,000 in cash the night before the case went to the jury. Authorities are still trying to determine the source of that money.

Eighteen other defendants have already pleaded guilty. Trials are still pending for the others.

Education Commissioner Willie L. Jett II disputed the auditor’s characterization of his agency’s oversight as inadequate. He said in a written response in the 120-page report that its oversight “met applicable standards” and that department officials “made effective referrals to law enforcement.” He said department staffers first spotted problems in summer 2020 and raised their concerns with federal authorities.

“What happened with Feeding Our Future was a travesty — a coordinated, brazen abuse of nutrition programs that exist to ensure access to healthy meals for low-income children,” the commissioner wrote. “The responsibility for this flagrant fraud lies with the indicted and convicted fraudsters.”

But Republican legislative leaders said at a news conference that the report shows that the failure to stop the fraud lies with the administration of Democratic Gov. Tim Walz, which has said that the state’s hands were tied by a 2021 court order to resume payments despite its concerns — a charge the judge disputed — and that the FBI asked the state to continue making payments while the investigation continued.

“This is stunning,” said GOP Senate Minority Leader Mark Johnson, of East Grand Forks. “The Department of Education and Gov. Walz have repeatedly tried to tell the public that they did all they could … but this report clearly demonstrates that was a false narrative.”


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