Governor Walz Unveils Anti-Fraud Package Targeting Waste, Abuse in State Programs
Published: February 27th, 2026
ST. PAUL, Minn. — Governor Tim Walz on Thursday announced a wide-ranging legislative package designed to crack down on fraud across Minnesota’s state programs, strengthening oversight, expanding investigative authority, and increasing criminal penalties for those who misuse public funds.
Joined at the Capitol by Department of Human Services (DHS) Commissioner Shireen Gandhi, DHS Inspector General James Clark, and Bureau of Criminal Apprehension (BCA) Superintendent Drew Evans, Walz said the proposal is aimed at protecting taxpayer dollars and restoring public trust.
“Fraud steals from the people of Minnesota and undermines the programs we all rely on,” Walz said in a statement. “This package strengthens oversight, improves detection, expands enforcement, and increases penalties to protect every dollar Minnesotans depend on. We’ve followed the experts, audits, and proven roadmaps; now it’s time for the Legislature to act.”
Building on Previous Reforms
The governor’s proposal builds on anti-fraud measures implemented over the past several years, including the creation of the BCA’s Financial Crimes and Fraud Section, the appointment of a statewide Director of Program Integrity, executive orders aimed at empowering state agencies to combat fraud, and leadership changes at DHS.
The new package incorporates recommendations from independent experts and Director Tim O’Malley’s program integrity roadmap, focusing on prevention, accountability, and modernized systems to detect fraud earlier.
Better Detection and Oversight
A major portion of the proposal centers on improving oversight and identifying fraud before significant losses occur.
The plan would strengthen program integrity requirements for Managed Care Organizations and expand internal audit and control capacity to ensure funds are properly spent and misused dollars are recovered. It also calls for deploying predictive analytics and machine learning tools to detect suspicious billing patterns earlier.
Additionally, the proposal would prohibit legislatively named grants and instead require competitive processes to increase transparency and fairness in awarding public funds.
Strengthened Investigative and Enforcement Authority
The legislative package also significantly expands investigative tools and enforcement authority.
The proposal would establish a centralized Office of Inspector General to lead statewide fraud prevention efforts, set investigative standards, and refer cases for civil or criminal enforcement.
It would expand staffing and subpoena authority for the BCA’s Financial Crimes and Fraud Unit and enhance the state’s authority to conduct on-site investigations across Minnesota Health Care Programs, including providers who have not yet billed claims.
The measure adds investigative capacity at both the Department of Revenue and the Minnesota Attorney General’s Medicaid Fraud Unit. It also creates permanent bans from state contracts and grants for individuals convicted of fraud — including prohibitions that extend to newly formed businesses and subcontractors.
Increased Criminal Penalties
The package proposes tougher consequences for those convicted of fraud involving public funds.
The governor is calling for the creation of a new Theft of Public Funds statute that would increase criminal penalties by 20 percent compared to existing theft statutes. The legislation would also extend statutes of limitations to seven years for certain fraud-related crimes, allowing prosecutors more time to investigate and bring charges.
Next Steps
The proposal now heads to the Minnesota Legislature for consideration. Lawmakers will debate funding levels and policy details in the coming weeks as part of the state’s broader budget discussions.
If enacted, the Governor’s office says the package would mark one of the most comprehensive anti-fraud overhauls in Minnesota’s history, targeting fraud prevention at every stage — from early detection to prosecution.