(Center of the American Experiment) — A new report from the Office of the Legislative Auditor (OLA) is highlighting yet another instance of mismanagement in Minnesota’s state-run programs, adding to a troubling pattern. While the report found no evidence of fraud by the Minnesota State Academies (MSA) for the Deaf and Blind, it concluded that the organization failed to comply with key financial legal requirements and lacked adequate internal controls.
In other words, MSA did not take enough action to protect taxpayers’ money from potential fraud and misuse.
The Minnesota State Academies comprises two schools: The Minnesota State Academy for the Blind, and the Minnesota State Academy for the Deaf. The schools serve students who are “blind, visually impaired, deaf or hard of hearing, including those with multiple disabilities.”
According to the Auditor’s report, the two schools together enrolled 119 students in the 2022-23 school year. For the corresponding fiscal year—July 2022 to June 2023—the Minnesota legislature gave the MSA $14 million. This amounts to about $118,000 per student, a substantial cost to taxpayers.
Looking at MSA’s activities between July 2021 and December 2023, OLA found that the MSA, among other things:
“overreported expenditures to the Minnesota Department of Education. As a result, the Minnesota Department of Education overpaid the Minnesota State Academies.”
OLA estimated that MDE gave the MSA $31,000 more in reimbursement—“for one-on-one instructional and behavioral management aide to students”—than it should have between 2020 and 2023.
OLA also found that the MSA did not:
“…monitor the financial and legal activities of its affiliated foundations, as required by the contracts;
…process payroll in accordance with state policy;
…document that it managed its imprest cash accounts in accordance with its policy;
…always purchase goods or services in accordance with state policy;
…manage its assets in accordance with state policy and did not keep an accurate record of its physical inventory;
…document the timely deposit of its receipts.”
A troubling trend
Earlier this year, OLA released three reports detailing fraud, abuse, and misuse in three state-run programs. On June 11:
“…(OLA) published a report estimating that only 60 percent of people who received front-line worker bonus payments during COVID-19 were eligible. This was followed by another scathing report on June 13 detailing how the Minnesota Department of Education (MDE) failed to provide adequate oversight to the ‘Feeding Our Future’ program, creating opportunities for fraud. An estimated $500 million has been lost in the Feeding Our Future fraud.”
In July:
“OLA released another report showing that some departments issued incorrect retroactive payments to workers or did not resolve incorrect retroactive payments.”
The new report on the MSA is yet another sign of a troubling trend—Minnesota’s state-run programs are riddled with fraud and mismanagement. This is a direct misuse of taxpayer dollars. Every Minnesotan should be alarmed.
This article was originally published by the Center of the American Experiment.
