By Rep. Jeff Dotseth
Just when it seemed Minnesota’s fraud problem couldn’t get any worse, a new nonpartisan audit found that state workers falsified documents during a review of taxpayer funding intended to help people with mental health and substance use disorders.
It’s all in a hard-hitting report from the Minnesota Office of the Legislative Auditor that reveals widespread problems in the Minnesota Department of Human Services’ oversight of behavioral health grants.
This underscores how deeply Minnesota’s fraud issue runs. It goes beyond one governor’s failed leadership and points to an activist-catering political machine that has grown out of control. It also raises questions about the extent to which state employees are participating in this “staggering, industrial-scale fraud,” as it’s been described by Assistant U.S. Attorney Joe Thompson.
Thompson has estimated fraud in Minnesota could reach $9 billion. We may never know the true amount of taxpayer theft, but using that $9 billion estimate, roughly $3,840 has been stolen per Minnesota household. That’s real money local families could have used for groceries, rent, heating bills, childcare, or anything else they need.
Such blatant abuse cannot be tolerated, and it’s going to be a major focus when the 2026 legislative session begins on Feb. 17. First of all, we need real answers to many questions about the backdating and potential falsification of documents uncovered in the OLA audit. It is clear fraud in state government is neither isolated nor accidental, and the days of St. Paul bureaucrats ignoring the problem must end.
House Republicans will be advancing a common-sense package of fraud-prevention and accountability reforms this session. We will continue exposing failures inside state government and calling out Twin Cities liberals who spent years blocking anti-fraud measures and attacking those of us demanding accountability. Although this is not technically a budget year, it is important we act now to rein in fraud and improve the state’s long-term fiscal outlook in the face of a $3 billion shortfall projected for 2028-29.
That deficit comes after the former trifecta passed a 40-percent state spending hike, spent our $18 billion surplus, and enacted $10 billion in new taxes during the last biennium. Along the way, statewide property taxes have risen by $1 billion due to unfunded mandates placed on counties. And the forecast also projects slowing job growth in our state, driven in part by additional mandates – such as paid worker leave – imposed on Minnesota businesses. It all leaves Minnesotans with less money in their pockets while government continues to grow.
There’s no sugar coating the fact that Minnesota’s record fraud and waste will be defining parts of Gov. Tim Walz’s legacy as he leaves office a year from now. But a new face operating from the same old playbook will only deliver the same results: more waste, more fraud, and higher costs for taxpayers. Without real solutions, Minnesota will remain stuck on this unsustainable path, and taxpayers will continue to suffer.
The good people of our state deserve a government that protects them, not one that enables fraudsters and then expects families to pick up the tab. It’s time to restore honesty, integrity, and accountability in our state agencies by taking a real problem-solver’s approach. That’s what I’ll be working to deliver this session because every dollar lost to fraud is a dollar not helping hungry kids, families in crisis, the homeless, or children with autism who depend on these services.
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