Committee reviews bill to let agencies pause payments on credible fraud allegations; bill laid over

Senate File 2856, an administration and MMB proposal to permit state agencies to pause payments when there is a credible allegation of fraud, was presented Thursday to the Senate State and Local Government Committee and laid over for possible inclusion in an omnibus bill.

Senator Carlson introduced the measure and Bridal Rayton, deputy commissioner at Minnesota Management and Budget, testified the bill is part of administration proposals to strengthen fraud-detection and enforcement tools. Rayton said the authority would let agencies quickly withhold payments when credible allegations arise, pause payments while an investigation proceeds, and share investigation data with law enforcement and other state, local or federal agencies where appropriate to prevent fraud.

Rayton said payments would resume only when an agency is satisfied no fraud occurred or at the close of related legal proceedings. Testimony emphasized that fraud against public programs harms intended beneficiaries and that agencies need consistent authority to act across the enterprise.

Committee members supported stronger tools but raised questions about execution, workforce training, independence of investigations and whether the package was sufficiently comprehensive. Senator Coram and others urged improved execution and oversight; Senator Kran asked about reporting and how the public would know whether the tools were working. Rayton said active investigations would not be public but acknowledged the difficulty of transparency during ongoing probes.

The committee laid Senate File 2856 over for possible omnibus inclusion; no committee-passage vote was recorded at the hearing.