Report finds ‘pervasive noncompliance’ in state grant management 

The Minnesota Department of Education did not conduct monitoring visits for the majority of grants reviewed by the legislative auditor.

The Minnesota State Capitol in St. Paul, Minn. (Shutterstock)

Minnesota issues an average of $514 million in state-funded grants to nonprofits each year but demonstrates “pervasive noncompliance” with oversight measures, according to a new report published Thursday.

The report from the Office of the Legislative Auditor (OLA) specifically looked at whether the Minnesota Department of Education and the Department of Public Safety’s Office of Justice Programs are complying with grants management policies.

“OLA has found pervasive noncompliance by state agencies with grants management policies in recent years, and statutes provide little authority to enforce agencies’ compliance with these policies,” Legislative Auditor Judy Randall said in a letter accompanying the report.

Randall’s office reviewed a sample of grant files from each of the selected departments and interviewed staff. They found that the Office of Grants Management’s (OGM) policies “lack sufficient detail for state agencies” on how to implement them. However, state agencies have the flexibility to develop agency-specific procedures to provide their staff with more direction.

The Minnesota Department of Education provides an average of $81 million in state-funded grants to nonprofits each year, according to the report.

Key findings for MDE include:

  • While MDE has established some agency-specific grants management procedures, it has provided insufficient written guidance to grant managers to ensure they consistently comply with all OGM policies.
  • MDE only partially complied with OGM policies and consistently provided less oversight of legislatively named grants than competitively awarded grants.
  • While MDE conducted pre-award financial reviews for most grants we reviewed, few of these reviews complied with all requirements in OGM policies.
  • MDE did not comply with all OGM policies for monitoring active grants.
  • MDE made at least $4 million in payments to grantees with past-due progress reports, in violation of OGM policy.
  • MDE did not conduct monitoring visits for the majority of grants in our review.
    • MDE did not provide evidence it conducted monitoring visits for 14 of the 15 grants that required monitoring visits.
  • MDE completed closeout evaluations for a majority of the grants in our review only after multiple OLA requests.

“The department takes its responsibility to manage grants seriously and agrees that its procedures, training, and documentation can be improved. MDE has already begun to take steps that are aligned with the two recommendations made by the OLA,” Department of Education Commissioner Willie Jett said in a letter responding to the report.

MDE was responsible for administering the $250 million in federal funds that was allegedly stolen by Feeding Our Future, a nonprofit founded to help feed hungry children. The legislative auditor’s report focused on state-funded grants and did not review federal grants or requirements.

Unlike MDE, the report found that the Department of Public Safety “largely complied with OGM policies but could make improvements.”

Key findings include:

  • DPS paid nearly $580,000 to grantees with past-due progress reports, in violation of OGM policy.
  • DPS conducted only about one-half of the required financial reconciliations.

Republican Sen. Mark Koran, who chairs the Legislative Audit Commission, said he was not surprised by the report’s findings.

“Republicans have been trying to get more oversight for years to hold both government and nonprofits accountable to taxpayers,” he said. “The public was rightfully shocked at the sheer scope and cost of Feeding our Future fraud under Gov. Walz and Attorney General Ellison’s lax oversight, but there is so much more we need to be doing to rein in this massive waste, fraud, and abuse.”

Read the full report here.


Anthony Gockowski

Anthony Gockowski is Editor-in-Chief of Alpha News. He previously worked as an editor for The Minnesota Sun and Campus Reform, and wrote for the Daily Caller.