State auditors could confirm eligibility for only 60% of Minnesotans who participated in a $500 million frontline worker bonus program, a new report says.
The 52-page report, issued by the Office of the Legislative Auditor, detailed the results of a “performance audit of the Minnesota Frontline Worker Pay Program for the period May 2022 through December 2022.”
Legislative Auditor Judy Randall summarized her office’s findings before a group of lawmakers Tuesday morning.
“In the end, we were able to confirm eligibility for about 60% of the applicants who received a frontline worker payment. However, for the remaining 40% of paid applicants, we either could not confirm their eligibility or we determined that they were in fact not eligible to receive the payment,” she said.
That doesn’t mean 40% of paid applicants were all ineligible, but it doesn’t mean they were eligible either, Randall said.
She said her office’s report presents three possible projections for how many eligible and ineligible payments were made.
“We presented these three projections so that each of you can decide which assumptions you believe are the most reasonable. Across those three projections, you will see that the one thing that is consistent is that 60% figure,” she said.
The program in question was enacted in 2022 “to provide payments to frontline workers whose work put them at risk of contracting COVID-19 during the peacetime emergency declared by the Governor in Executive Order 20-01. The Minnesota Frontline Worker Pay Program was designed to provide up to $1,500 in compensation, depending on the number of eligible applicants, to individuals who worked in one or more ‘frontline sectors’ during the COVID-19 pandemic and met the eligibility requirements specified in law.”
‘Fraud indicators’
In total, Randall said about 1 million checks were issued for around $487 each.
“This program was set up as a zero-sum game with a fixed amount of state funding, $500 million, to be divided equally among all eligible applicants. The more applicants who were approved, the less each applicant received,” Randall explained.
Her office’s report found that “the Department of Labor and Industry (DLI), the agency tasked with overseeing and implementing the Minnesota Frontline Worker Pay Program, did not comply with requirements for the program. The more significant instances of noncompliance related to payments to ineligible individuals.”
Specifically, the report found that “the departments of Labor and Industry and Revenue approved frontline worker payments to applicants who were not eligible and to applicants whose eligibility we could not determine,” and that “the Department of Labor and Industry approved frontline worker payments to individuals whose applications contained fraud indicators without investigating whether the applicants were legitimate.”
As part of the audit, the auditors “randomly sampled 150 applications from the population of applicants who received a frontline worker payment without failing the identity verification process or eligibility requirements” and also “randomly sampled another 150 applications from the population of applicants who received a frontline worker payment after successfully appealing their initial denial.”
Of the former group, “two applicants were not employed for at least 120 hours in Minnesota in a frontline sector,” while “fourteen applicants were not required to work in person for at least 120 hours and/or did not work in close proximity (within six feet) to individuals outside of their household for at least 120 hours.”
Auditors also “could not determine the eligibility for 50 applicants” for a variety of reasons, resulting in 41.3 percent of these randomly sampled applicants having some form of issue with their application, “totaling $30,221.90 in frontline worker payments.”
As for the sample of 150 who successfully appealed their application, “Sixteen applicants were not required to work in person for at least 120 hours, did not work in person for at least 120 hours, and/or did not work in close proximity (within six feet) to individuals outside of their household for at least 120 hours.” Auditors also “could not determine the eligibility for 48 applicants,” representing a total of 40.7 percent of the sample, to which $29,734.45 was paid out.
Auditors also examined another sample of “227 frontline worker payments made to applicants that contained one or more indicators that the individual may be ineligible.” Within this sample, “five of 60 (8.3 percent) applicants tested did not work in an occupation providing COVID-19 patient care responsibilities,” while “fifteen of 21 (71.4 percent) applicants tested used the identity of a deceased individual to receive a frontline worker payment.” Meanwhile, “for 20 of 26 (76.9 percent) applications tested, 10 individuals used the same identification number twice in order to receive two frontline worker payments.”
Lawmakers react
Along with the auditors, Minnesota Republicans lambasted the enabling of fraud which occurred under the program.
State Sen. Karin Housley, R-Stillwater, declared that the “people of Minnesota should be furious with the Democrats and their disrespect for our hard-earned dollars,” as “fraudsters once again took advantage of a state-run COVID program to enrich themselves.”
“Republicans had plenty of ideas for more oversight to ensure this money went to legitimate frontline workers. But Governor Walz and Democrats wanted nothing to do with it, and now we end up with $205 million in fraud,” she said.
Minnesota House Minority Leader Lisa Demuth, R-Cold Spring, stated that the report “proves once again that the Walz Administration and legislative Democrats just don’t care about stopping fraud.”
“When this law passed, House Republicans raised concerns about how the program would function and offered amendments, which Democrats voted down, to make it easier to prevent and prosecute fraud,” she said. “Those concerns have been shown to be correct, and Democrats should quit voting to protect fraudsters.”
Evan Poellinger
Evan Poellinger, the Alpha News Summer 2024 Journalism Fellow, is a native Minnesotan with a lifelong passion for history and politics. He previously worked as a journalism intern with the American Spectator and an investigative journalism fellow with the Media Research Center. He is a graduate of College of the Holy Cross with degrees in political science and history.
