State and Local Government

Fraud prevention:  

Office of the Inspector General: In 2025, the Senate passed a bill to create an independent Office of the Inspector General. In 2026, the House moved the bill through the committee process and to the floor. The Inspector General will have the authority to investigate allegations of fraud and will ensure that public dollars are being used as they are intended to be. (SF 856)  

Grants Management Oversight: The Department of Administration’s policy bill provided important clarity to agencies regarding their oversight of state grants. Current law states that the commissioner has this authority for “particular grant programs,” but did not specify which; now those guidelines are clear. The bill also requires the commissioner to report each approved exception to grants management requirements to the legislature, providing for additional legislative oversight. It prohibits the commissioner of administration from sharing data provided in comments to the commissioner of the executive agency that is the subject of the comments. Lastly, it adds a definition for “grant recipient” in the section related to criminal convictions related to a state grant agreement.  

MMB Payment Withholding Authorization: The Minnesota Management and Budget payment withholding language and program integrity reporting requirements were added to the grants management bill in the final days of the 2026 session. This language allows the head of any state agency to withhold payments to a program participant in any program administered by that agency if the program participant is the subject of a credible allegation of fraud under investigation. Agency heads can also withhold payments if another agency head has determined there is a credible allegation of fraud against a program participant. Notice must be given to the program participant within five days of the agency taking action. To the extent practicable, the agency must notify those whose funds are interrupted but not implicated in the suspected fraud of their rights to continue receiving funds or services.  

Under this section, a request for reconsideration is allowed and the agency has 60 days after receipt of the request to determine whether the withholding should remain in place. Unless the agency is authorized to take additional action, withholding must end if there is insufficient evidence of fraud. This section does not apply to programs under the Department of Human Services. Because DHS must follow federal Medicaid laws, this section is unrelated to disability, social services, and child care payments. 

Program Integrity Reporting Requirements: New annual reporting requirements were also added to this bill. Beginning November 30, 2026, the Department of Children, Youth, and Families and the Department of Human Services must report to the legislature information related to program integrity. This includes department capacity to meet licensing demands and conduct investigations, general information about caseload, site visit data and the number of investigations into fraud. (HF 3629) 

Local Public Television and AMPERS Funding: The supplemental state government funding bill included $1.825 million for grants to local public televisions stations. These funds are crucial after the Trump administration cut all funding to the Corporation for Public Broadcasting, leading the CPB to close its doors. Without these funds, local stations would face shutting their own doors. The bill also included $100,000 for grants to the Association of Minnesota Public Educational Radio Stations (AMPERS). (HF 4591)  

Melissa and Mark Hortman State Park Working Group: A working group was established to make recommendations for the creation of a Melissa and Mark Hortman State Park within the Capitol Area. A report to the legislature of the group’s recommendations is due February 1, 2027. (HF 4591)  

Board of Barber Examiners and Board of Cosmetologist Examiners: The state government funding bill also included two articles that update the Board of Barber Examiners and Board of Cosmetologist Examiners statutes. While the changes are mostly technical, they will lower barriers for aspiring barbers and cosmetologists and allow the boards to operate more efficiently. (HF 4591)  

Security Funding: Additional funding included in the Safety and Security package was appropriated to the legislature for increased security measures in Senate- and House-occupied spaces. This funding is used for weapons screening and other enhancements to office buildings and the chambers and gallery spaces. Additionally, $100,000 was appropriated to each of the constitutional officers (Attorney General, Secretary of State and State Auditor) for security measures. (SF 3432)  

Cesar Chavez Day: HF 4541 removed Cesar Chavez Day from the list of state observances. Work will continue to ensure that, as a state, we celebrate our Latino communities and that Minnesotans have an opportunity to learn about and appreciate the Latino community and their contributions to our state. (HF 4541)