Legislators from both parties sitting on a newly-formed fraud oversight committee in the state House are calling on their colleagues to stop sending taxpayer dollars directly to nonprofits.
The practice of sending money to nonprofits through “legislatively named grants” has faced increased scrutiny in recent years as the state grapples with multiple fraud scandals.
“Legislatively-named grants may be well-intentioned, but they often bypass the due diligence that should be required in any public funding decision,” said Rep. Kristin Robbins, R-Maple Grove, chair of the Fraud Prevention and Oversight Committee.
On Wednesday, the members of that committee—five Republicans and three Democrats—wrote a joint letter “with an important request to our colleagues on finance committees as you begin to build budgets in your respective policy areas.”
“Specifically, when you appropriate funds to private entities, we urge you to strongly consider having agencies use a competitive process to select those entities, rather than directly naming them in law,” the letter continues.
In addition to Robbins, the letter was signed by the following members of the state House: Dave Pinto, DFL-St. Paul, Patti Anderson, R-Dellwood, Emma Greenman, DFL-Minneapolis, Walter Hudson, R-Albertville, Steve Elkins, DFL-Bloomington, Marion Rarick, R-Maple Lake, and Isaac Schultz, R-Elmdale Township.
“With competitive grants, the Legislature identifies a policy priority and an amount of money to address it—a core legislative function,” the letter says.
“Applications by entities to address that priority, however, are best reviewed through a competitive process, with consistent and thorough vetting by knowledgeable professionals with direct experience in the relevant field, and in accordance with state grants management standards that require an RFP, a pre-award risk assessment, including a review of financials and capacity. All of this ensures that the funds are awarded to the entity or entities best able to carry out the legislative intent.”
Although the letter has no legal effect, it does have some teeth to it because it was drafted by a bipartisan group of legislators in a chamber that is currently tied 67-67.
The legislators who signed the letter say they are leaning on testimony in the fraud committee over the last few weeks, along with what they described as “repeated recommendations dating as far back as 2007” from the Office of the Legislative Auditor (OLA).
In a 2007 report, the OLA said “the Legislature should not mandate grant recipients in law but allow agencies to select recipients through a competitive process.”
The letter also points to a 2023 OLA report which found that “state agencies provide ‘less oversight of legislatively named grants than competitively awarded grants,’ since the funding is required to be awarded regardless.”
The letter acknowledges that direct appropriations may be appropriate in rare cases where only one qualified provider exists, but urges lawmakers to treat those as the exception—not the rule.
The call from the committee comes as legislators in the House and Senate begin working through budget bills for various areas of government. The legislature has until May 19 to submit a balanced budget to the desk of Gov. Tim Walz.
“This change doesn’t diminish the Legislature’s role,” Robbins said. “It strengthens it—by ensuring that funds are awarded based on merit, capacity, and alignment with legislative intent. Earmarks circumvent best practices, since agencies know they are obligated to award the grant by law.”
Hank Long
Hank Long is a journalism and communications professional whose writing career includes coverage of the Minnesota legislature, city and county governments and the commercial real estate industry. Hank received his undergraduate degree at the University of Minnesota, where he studied journalism, and his law degree at the University of St. Thomas. The Minnesota native lives in the Twin Cities with his wife and four children. His dream is to be around when the Vikings win the Super Bowl.
