Panel backs statewide Inspector General office; committee recommends bill pass and refer to HHS

The Minnesota Senate Education Finance Committee on Feb. 26 considered Senate File 856, which would create a statewide Office of Inspector General (OIG) to investigate fraud, waste and abuse in state government programs. After amendment and debate, the committee recommended the bill to pass and referred it to the Health and Human Services Committee.

Senator Gustafson, the bill’s sponsor, said the OIG would be independent of executive agencies and report to the chief administrative law judge; a legislative advisory commission would recommend candidates to the inspector general and provide oversight. The bill’s amendments included carve‑outs to preserve certain functions within departments — for example, exemptions for MDE positions in the student maltreatment program — and a phased transfer of agency OIG duties when the statewide OIG becomes operational.

Deputy Commissioner Britta Rayton of Minnesota Management and Budget told the committee that while MMB supports fighting fraud, the state’s current threats often involve external actors and investigators need close partnership with agency subject‑matter experts. Rayton recommended clearly naming functions to be transferred and highlighted the governor’s separate fraud package as an alternative way to bolster agency tools.

Ado Shuni, director of government relations at the Minnesota Department of Education, described accomplishments of MDE’s existing OIG, noting the office’s case tracking, procedures aligned with Association of Inspectors General standards, and relationships with law enforcement. MDE cautioned that moving ongoing investigations and cases to a new statewide office would require careful transition, data handling and legal protections to preserve prosecutorial integrity and protect confidentiality.

Senators debated appointment and oversight structures, separation of powers and operational details. Senator Cronin, co‑author, said Minnesota’s existing embedded OIG model is structurally insufficient because the commissioner hires and oversees agency OIGs; the bill seeks an independent OIG that can investigate without agency interference.

After discussion and an amendment process that the sponsors said responded to multiple agency concerns, the committee voted to recommend passage and to refer the bill to the Health and Human Services Committee. The authors said additional technical changes could be considered in subsequent committee stops.

Votes and formal actions affecting the bill are summarized below.