As Minnesota’s significant fraud issues attract national attention, a recent audit is raising concerns about possible fraud linked to contracts awarded by the city of Minneapolis in response to George Floyd’s death.
In 2020, over 100 contracts were issued to community organizations as policing alternatives, but a report from the Minnesota Star-Tribune indicates that inadequate oversight of these contracts poses risks of fraud and favoritism. The new Neighborhood Safety Contract Management Audit Report, which assesses the city’s spending from 2020 to 2025, reveals that the city isn’t effectively managing or overseeing contracts for violence prevention programs, which have already cost more than $36 million since 2023.
The report highlights that the city’s lack of solid contract management has increased the chances of fraud and improper payments. Auditors noted that contractors frequently submitted invoices with minimal documentation, and at times, the city continued payments even when records were missing or concerns were unresolved. It was also found that there is no standard process in place for site visits that would verify whether the contracted services were actually delivered.
Additionally, the audit pointed out that the city needs to enhance its review processes for invoices, maintain better contract records, document communications with contractors, and clarify procedures for escalating concerns.
Bill Glahn, a policy fellow at the Center of the American Experiment, remarked that based on his previous investigations of city grant programs, similar results would likely emerge from any thorough audit of such initiatives. His 2023 reports questioned the effectiveness of the violence-interrupter program. According to Glahn, while Minneapolis allocated about $7.5 million from 2022 to 2023 and earmarked another $13 million for 2024 to 2028, there hasn’t been substantial evidence showing that the program has reduced violent crime.
Glahn also investigated the financial viability of the organizations involved, discovering that some had revenue or staffing levels that were much lower than the grants they received. Notably, We Push for Peace, one of the program participants, had staff members who were involved in violent incidents in 2021.
He expressed that it appears the city is more focused on distributing funds to address pressing issues rather than ensuring grant recipients are credible and capable of fulfilling their obligations, or even assessing whether their work is beneficial to the city’s residents and taxpayers.
In recent years, Minnesota has come under fire for not conducting enough onsite visits to prevent fraud in programs like Feeding Our Future as well as other Medicaid-related schemes. State Senator Mark Koran emphasized that a simple visit to the facilities could have revealed the reality behind claims about the number of people served.
He referred to a legislative auditor report that found discrepancies concerning 30 property owners where these operations supposedly took place, with some indicating that the businesses did not exist at all.
Glahn added that while site visits can be helpful, he believes that even a basic review of tax records and financial statements would have disqualified many of these vendors right from the start. He stated that fraud issues have not diminished in Minnesota.
The audit did not pinpoint any specific fraud cases but highlighted that the city’s weak oversight has increased the risk of fraudulent activities. Many social media users shared their skepticism about the state’s credibility.
One retired Navy intelligence officer criticized the situation, asserting that the approach taken is reminiscent of a flawed business model that previously misappropriated funds in other welfare-related programs.
A spokesperson from the Minneapolis city office expressed appreciation for the auditor’s recommendations and noted the effort to improve departmental processes. They emphasized that the Neighborhood Safety department is making strides in enhancing community safety and is dedicated to refining their operational methods for better outcomes.
