Auditors tell House panel statewide grants oversight lacks standards, enforcement

The Office of the Legislative Auditor told the Minnesota House Fraud Prevention and State Agency Oversight Committee on Feb. 10 that statewide grants management policies often lack detail, agencies commonly fail to follow those policies, and the state’s accounting data do not give the Legislature an adequate picture of grant activity.

For the record, Legislative Auditor Judy Randall and Deputy Legislative Auditor Jody Munson Rodriguez presented findings from the Office of Legislative Auditor’s 2023 evaluation “Oversight of State‑Funded Grants to Nonprofit Organizations,” and its follow‑up materials. Randall and Munson Rodriguez said the report found widespread noncompliance with grants management policy, gaps in training and tools for grant managers, and limited statutory authority to enforce policy.

The issue matters because state agencies award roughly $514 million a year to nonprofit organizations, on average, according to the auditors’ review of fiscal 2018–2022. Auditors said agencies awarded grants to about 2,400 unique nonprofit organizations in that five‑year period; the median award was about $68,000 and 75% of awards were under about $440,000. Chair Kristin Robbins said the committee was formed to dig into this kind of issue after press reports and concerns about large fraud schemes.

Auditors’ findings and examples

Deputy Legislative Auditor Jody Munson Rodriguez told the committee that the Department of Administration’s Office of Grants Management (OGM) policies cover the…