The Minnesota Department of Education failed to protect federal funds allocated to feed disadvantaged children from fraud and abuse, according to a new report by a state Senate committee.
The Senate Education Finance and Policy Committee on Monday released a three-page summary accusing the department of failing to follow state and federal laws when managing the budget for federal child nutrition programs. It claims to have “extended the range of losses” on these dollars to fraud.
The FBI is investigating widespread alleged fraud in funds for child nutrition programs in Minnesota during the first two years of the COVID pandemic. Affidavits in FBI search warrants sealed in January showed that several non-profit food sites, restaurants, and networks of people were accused of personal use, including luxury purchases of real estate, cars, and international travel. No one named in the investigation has been directly charged with crimes related to food aid fraud.
The Minnesota Department of Education has extensive oversight of federal funding, directing it to sponsoring organizations such as Feeding Our Future and Partners in Quality Care, based on the number of meals they report, as a distribution point. It worked. The sponsoring organization then distributed the money further to small nonprofits, religious groups, and other organizations that were supposed to purchase meals for the children.
The alleged fraud was simple at its core. Some organizations along the chain allegedly served more meals than they actually did in order to receive more federal money.
In a prepared statement, state Senator Roger Chamberlain, R-Reno Lakes, called for a “full audit” of the education department’s handling of money. He has held public hearings three times this year, and department officials have testified about the suspicions of fraud and investigations.
“This fraud could involve tens of millions of dollars of taxpayers and the department is unable to address the issue or recognize their mistakes,” Chamberlain said.
In response to Monday’s report, Minnesota Department of Education spokesperson Kevin Burns said he had early raised concerns with federal officials about the amount of meals he claimed to fund using federal dollars. , defended the Ministry of Education.
“Because of MDE [the Minnesota Department of Education] The federal government launched an investigation and we fully supported it,” Burns said Monday. “The MDE moved quickly, raised the issue with federal officials on multiple occasions, and was able to find someone who took our troublesome spending as seriously as we do.”
The FBI search warrant portrays Feeding Our Future as the lead actor in the alleged fraud. But staff at the organization, which dissolved last February, denied wrongdoing and served food sites run primarily by immigrants and people of color, which the education department discriminates against. criticized.
Burns said the agency expressed concerns about the diet report directly to Feeding Our Future, eventually contacting the Office of the Federal Inspector General, the U.S. Department of Agriculture, and ultimately the FBI. He also added that the department had frozen federal payments to Feeding Our Future, but was subsequently ordered by state judges to reinstate payments.
Burns’ claims are reminiscent of Education Secretary Heather Mueller’s testimony at a Senate hearing last spring.
But the report accuses the education sector of failing to act on early warnings about allegations of fraud. citing an article in the Sahan Journal featuring Kara Lomen, who became a rival of
In October 2020, Lomen, executive director of Partners in Quality Care, alerted the education sector to suspected fraud in child nutrition programs. A spokesperson for the department previously told the Sahan Journal that it had expressed concern about diet claims in Feeding Our Future earlier that month.
Federal dollars to both Feeding Our Future and Partners in Quality Care exploded during the pandemic. Feeding Our Future increased from $3.4 million in federal food aid in 2019 to $43 million in 2020 and $198 million in 2021. Over the same period, Quality Care’s federal reimbursement partners jumped from $5 million in 2019 to $21 million in 2020 and ultimately $191 million. 2021 years.
The report also fails the education sector by not using performance bonds to track whether food aid funds are used for their intended purpose. It acts as a kind of insurance guaranteeing all parties who enter into the contract to complete it. Failure to do so violates federal and internal departmental rules governing food programs, and the report concludes it increased tax losses by 10 to 25 percent.
The Senate report also criticizes the department for scaling back physical visits to food-serving sites after an alleged spike in fraud in 2020. He repeatedly questioned Mueller and other department staff about the visit.
Mueller and her colleagues testified that federal COVID waivers allowed the department to halt in-person site visits to stop the spread of the virus. It said it repeatedly characterized it as “one component” of , and said other surveillance practices, such as checking financial records, prompted it to spot suspected fraud.
The Senate report casts skepticism on the Education Bureau’s claims about site visits.
“The department could have staffed outside (inside the vehicle) the suspected program to monitor pedestrians, but chose not to do so,” the report said.
The report also criticizes department officials for claiming their review process worked because it found the alleged fraud. It’s a “thing”. Chamberlain said he plans to monitor the federal government’s investigation and “if necessary, conduct further public hearings to get to the bottom of this matter.”
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