Did most free-food money go to fraud in Minnesota? It sure looks like it.
In Gov. Walz’ budget proposal filed this week, the Walz administration has added some details to his proposals to prevent the next industrial-scale, Feeding Our Future-style fraud.
The headline measure in the package is adding an Inspector General position inside of the state Department of Education (MDE).
MDE is the agency that oversees the federal free-food programs in Minnesota. The budget proposal to add an Inspector General’s office is priced out at $2 million per year (p. 33), all of which will come from Minnesota taxpayer dollars.
Amazingly, at this late stage of the proceedings, the Department makes this statement:
Under current state and federal laws and regulations, the only mechanism MDE has to investigate potential fraud in federal nutrition programs is by notifying the United States Department of Agriculture.
The $2 million per year would fund 10 new staff positions in the agency. In its justification for the new program, MDE mentions the free-food nonprofits Feeding Our Future and Partners in Nutrition, by name.
Elsewhere, the Department proposes to spend an additional $800,000 on their internal audit function (p. 178). This would allow the agency to enhance its efforts in “combating fraud, waste, and abuse” and would fund an additional five new positions.
Other related initiatives are spread through other departments of state government.
The free-food scandal involves two federal programs: the Child and Adult Care Food Program (CACFP) and the Summer Food Service Program (SFSP). In the three fiscal years 2020 through 2022 (covering the pandemic period) MDE took in $1.25 billion dollars of Federal money for these two efforts.
In the wake of the FBI raids a year ago, MDE shut down both Feeding Our Future and Partners in Nutrition. Earlier, MDE had shut down a third nonprofit, Gar Gaar Family Services, for mismanagement.
Feeding Our Future no longer exists. The latter two nonprofits (Partners and Gar Gaar) are suing MDE for reinstatement and payment of pending invoices. Keep in mind that all three nonprofits were suspended well before the end of fiscal year 2022.
Together, the three suspended nonprofits took in more than $472 million in the past three years.
In fiscal year 2020, the three nonprofits represented 7 percent of the two programs. By 2021, their share had increased to one-third. In their final (partial) year of operation, the three took in more than 60 percent of the total federal money coming to Minnesota.
MDE says that they rang the alarm on fraud in 2020. But the agency kept paying out more and more money, until the FBI acted in January 2022.
Before we hire the next dozen bureaucrats, a full accounting of the agency’s (in)actions needs to be done.