WASHINGTON — The federal government has again criticized Minnesota, this time over the state’s refusal to provide information about $210 million in taxpayer funds that may have been misused in programs serving laid-off workers and other job seekers.
The US Department of Labor’s watchdog last month recommended that Minnesota’s employment agency be designated “noncompliant” after it repeatedly failed to respond to requests about 48 federal grants. The funding supports programs that retrain unemployed adults, help former prison inmates re-enter the workforce and provide other employment services.
Labor Inspector General Anthony D’Esposito accused Minnesota 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 concerns involving the potential misuse of $210 million come after a year in which Minnesota has faced intense scrutiny from the Trump administration over allegations that fraudsters diverted as much as $9 billion from taxpayer-funded programs.
Minnesota, however, told The Post that the federal government’s requests were “unprecedented” and overly 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 (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 taking “equally seriously our responsibility to protect private information entrusted to us by Minnesotans.”
The Labor Department’s Office of Inspector General began an audit last April of 48 active federal grants awarded by the Employment and Training Administration to Minnesota’s state agency. The review was intended to determine whether DEED had “accurately reported participants’ enrollment, services, and outcomes in accordance with federal requirements,” according to a September memo.
The audit covered grants issued between October 1, 2023, and April 1, 2026, with a combined value of approximately $253 million.
MUST READ: The Real Reason Behind Barry’s Trainer Exodus in Australia
But four months after making “numerous requests” for information on 26 grants totaling $210,898,737, Minnesota’s DEED had not provided any of the requested data.
“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 said.
“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 employment programs, services for dislocated workers, youth activities, senior community service employment programs and a First Step Act Initiative aimed at helping former inmates return to the workforce.
Without the requested information, the inspector general’s office could not determine whether “participants existed and were eligible for the programs,” whether “participants received the training and services reported,” whether reported wages were accurate or whether “subrecipients properly documented program activity,” among other issues.
The memo concluded: “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.”
D’Esposito said Minnesota’s refusal to provide the information could harm both taxpayers and eligible workers. “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.
Minnesota’s most prominent welfare-fraud case, the Feeding Our Future scandal, involved Somali fraudsters who allegedly took $250 million in taxpayer funds intended to provide meals for children in need.
President Trump and his allies have accused Rep. Ilhan Omar (D-Minn.) of knowing about — and at times enabling — the fraudulent scheme. Omar has denied the allegations.
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.”
MORE ON THIS: Shannon Poteet Murder Update- Was Lonnie Poteet Arrested? Where Is She Now?