WASHINGTON — The federal government is again criticizing Minnesota, this time over the state’s failure to provide information about $210 million in taxpayer funds that may have been improperly spent on workforce programs.
The Labor Department’s watchdog last month recommended that Minnesota’s employment agency be classified as “noncompliant” after repeatedly failing to answer requests about 48 federal grants. The programs are intended to retrain unemployed adults, help laid-off workers return to the workforce and assist former inmates with finding jobs, among other purposes.
Labor Inspector General Anthony D’Esposito accused Minnesota officials of “deliberate obstruction.”
“Our auditors and investigators are zeroing in on this failure, and we will enforce full accountability. Strong federal oversight is non-negotiable. We will not allow this defiance to enable fraud or to cheat American workers,” D’Esposito said in a statement.
The scrutiny over the potentially misspent $210 million comes after a year in which Minnesota has faced intense criticism from the Trump administration over alleged fraud in taxpayer-funded programs. Federal officials have estimated that as much as $9 billion may have been stolen.
Minnesota, however, told The Post that the federal government’s requests were “unprecedented” and excessively intrusive.
“OIG requested sensitive private information involving more than 30,000 Minnesota residents and workforce program participants,” the Minnesota Department of Employment and Economic Development, or DEED, said in a statement.
The agency said it “takes seriously its responsibility to administer federal workforce programs and cooperate with appropriate oversight,” while also emphasizing its duty to protect the private information entrusted to it by Minnesotans.
The Labor Department’s Office of Inspector General began auditing 48 active federal grants last April. The grants were issued through the Employment and Training Administration to the Minnesota agency, with the review intended to determine whether DEED had accurately reported participant enrollment, services and outcomes as required by federal rules, according to a September memo.
The audit examined grants covering the period from Oct. 1, 2023, through April 1, 2026. Together, they totaled roughly $253 million.
CHECK THIS OUT: English Councils Face Labour-Green Split Over Zionism Motion
Yet four months after making “numerous requests” for information on 26 grants worth $210,898,737, DEED had not provided the requested data, the memo said.
“While DEED’s failure to provide the participant-focused data does not, by itself, establish that over $210 million was misspent, it raises significant concerns regarding its compliance with grant requirements and its stewardship of federal funds,” the memo stated.
“Given the magnitude of the funding involved and the continued lack of cooperation, the OIG has determined that this matter warrants ETA’s immediate attention.”
The federal grants support adult education and employment services, dislocated-worker programs, youth initiatives, senior community service employment and the First Step Act Initiative, which helps former inmates re-enter the workforce.
Without the requested records, the inspector general’s office could not determine whether participants existed and qualified for the programs, whether they received the training and services reported, whether reported wages were accurate or whether subrecipients properly documented their activities.
“Because we were unable to complete testing, the full extent of unsupported activity remains unknown. As such, there is a significant risk that inaccurate reporting, unsupported activity, or improper use of ETA funds could go undetected,” the memo concluded.
“By withholding critical participant data, Minnesota is actively undermining vital workforce programs and risking depriving eligible people of the services they need. The DOL OIG will not tolerate this noncompliance. We are committed to protecting every taxpayer dollar and will take whatever steps are necessary to stop potential misuse of these funds. Minnesota’s defiance ends now,” he said.
Representatives for the Labor Department’s Employment and Training Administration did not immediately respond to a request for comment.
The most prominent alleged welfare fraud case in Minnesota is the Feeding Our Future scandal. Prosecutors say Somali scammers stole $250 million in taxpayer money intended to provide meals to children in need.
President Trump and his allies have accused Rep. Ilhan Omar, a Minnesota Democrat, of knowing about — and at times enabling — the alleged fraud. Omar has denied the accusations.
Minnesota’s Democratic Gov. Tim Walz abruptly abandoned his re-election bid earlier this year amid the heightened scrutiny of federal dollars being sent to his state, citing his need to focus on “defending the people of Minnesota against the criminals who prey on our generosity” and not his own “political interests.”
