Governor's supplemental proposes auditors and fraud investigators; lawmakers press on local impacts and named-grant changes

Committee members received an overview of the governor's supplemental budget proposals on April 9, 2026, covering measures to strengthen internal controls, combat fraud, and change grant administration practices.

Presenters said the package would add 15 FTEs for statewide internal-control specialists and auditors at Minnesota Management and Budget to help agencies implement OLA recommendations and test corrective actions. The Department of Revenue would receive appropriations intended to bolster fraud-prevention capacity: $1,839,000 in FY27, $2,786,000 in FY28, and $2,725,000 in FY29 to add staff and internal-control improvements. Presenters said the revenues criminal-investigation division has seen a marked increase in referrals and tip-line engagement.

The Attorney General's office would receive $1,231,000 in FY27 to expand the Medicare Fraud Control Unit from 32 to 50 staff (adding investigators, attorneys and support) to respond to a near tripling of referrals; presenters noted about 75% of MFCU funding is federal.

The budget package would also curtail legislatively named grants and require competitive processes for state-funded grants, with exemptions for certain funds, tribes and political subdivisions — a change proponents said reduces conflicts of interest.

Members supported stronger anti-fraud tools but raised questions about local impacts and implementation. Representative Sexton flagged a provision that appeared to bypass local permitting processes tied to a 2023 BCA project; Greg Ewig of the Department of Administration explained it was a narrow fix related to a security-fence variance and not intended to circumvent local authority. Members thanked presenters and closed the informational hearing; no committee votes were taken on the supplemental package during this session.