Minnesota lawmakers are calling for an end to the practice of legislators providing funds directly to nonprofits amid concerns of favoritism and lack of oversight. The House Fraud Prevention and State Agency Oversight Policy Committee met for the first time to address the issue, noting that state agencies are failing to adequately oversee grants to nonprofits.
In 2023, the Legislature approved over $1.1 billion in grants to nonprofits through legislatively named grants, which bypass the competitive process typically used by state agencies. This has raised concerns about transparency and accountability, especially in light of recent fraud schemes involving sham nonprofits.
Legislative Auditor Judy Randall has recommended ending the use of legislatively named grants since 2007, citing issues with oversight and accountability. While some argue that direct grants can be more efficient and beneficial for smaller nonprofits, others push for a more competitive process to ensure fair distribution of funds.
Rep. Kristin Robbins, chair of the House fraud committee, acknowledges that ending the practice will require a cultural shift, with lawmakers needing to police themselves. Ultimately, the decision will lie with legislative leaders and committee chairs to discourage the use of legislatively named grants in the future.
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