FEDERAL AID

Minnesota sent frontline worker bonuses to 290 dead people, audit finds

Max Nesterak / Minnesota Reformer — Wed, 12 Jun 2024 12:04:00 GMT

Just 60% of the more than 1 million people who received $487.45 for working frontline jobs during the COVID-19 pandemic in Minnesota clearly deserved the bonuses, according to a state audit released on Tuesday, June 11.

The Office of the Legislative Auditor estimates 9% of recipients were not eligible for the payments, while for the rest, it just wasn’t clear whether they should have received checks meant for nurses, first responders, prison guards, sales clerks, janitors and other workers who couldn’t stay home during the pandemic.

The auditor analyzed just a fraction of recipients from the Minnesota Frontline Worker Pay Program and found numerous payouts to suspicious applicants, including people who used the same identification numbers, people who listed home and work addresses outside of the state, and people who used “high-risk bank routing numbers.”

The auditors also identified payouts to 290 people who died before they received a bonus, including one person who died two years prior to the application date opening.

The report says the Department of Labor and Industry, which oversaw the program, did not adequately investigate clearly fraudulent applications, nor did they ensure the contractors they hired retained enough data to evaluate the payouts. The Department of Revenue also did not verify the income of all applicants to ensure they were eligible.

Roughly 85% of those who applied for a bonus received one, according to the report.

“Remember, this program was set-up as a zero-sum game with a fixed amount of state funding — $500 million — to be divided equally among all eligible applicants,” Legislative Auditor Judy Randall told the Legislative Audit Commission on Tuesday. “The more applicants who were approved, the less each applicant received.”

Indeed, when lawmakers passed the funding with near unanimity, they believed workers would receive $750.

Fraud and waste have come to define pandemic relief programs, from the Paycheck Protection Program to the Federal Child Nutrition Program, as government agencies were directed to quickly pay out billions of dollars.

In the frontline worker pay program, a divided Legislature didn’t agree to the funding until more than two years into the pandemic and wanted to get the money into workers’ bank accounts as quickly as possible.

Randall said her office has reported its finding to the FBI, the Attorney General’s office and the Ramsey County attorney, while the report recommends the state Department of Revenue try to recoup erroneous payments.

The Office of the Legislative Auditor is part of the legislative branch and typically focuses its critiques on state agencies under the executive branch. But their report on the frontline worker pay program offered a diplomatic rebuke to state lawmakers for how the law was written.

For example, the program included requirements that couldn’t easily be verified, like if people worked in-person and in close proximity to others, so the Department of Labor and Industry had to essentially take applicants at their word.

The auditors reached out to the employers of a small sample of recipients to verify if workers did work in person and in close proximity to others for at least 120 hours between March 2020 and June 2021, but in many cases the employers either didn’t respond or said “don’t know.”

“The overarching theme of the findings is that the issue is with the program itself, not how it was implemented,” DLI Commissioner Nicole Blissenbach told the Legislative Audit Commission on Tuesday.

Blissenbach also noted in her department’s response that the auditor revised its report after the agency showed some flagged applicants were indeed eligible for the benefit and said they might have been able to prove eligibility for others if given more time.

Sen. Ann Rest, DFL-New Hope, agreed that lawmakers shouldered some of the blame, and thanked the auditors for not taking an “apologist view” either for the state agencies or the Legislature.

“Where did the carelessness happen? It happened in the Legislature,” Rest said.

But Randall said even a flawed law doesn’t absolve state agencies.

“The law does not say, ‘definitely stop fraud,’ but I would expect we all think we should try to stop fraud,” Randall said.

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Minnesota snow-dependent businesses eligible for federal disaster loans after warm winter

Kavita Kumar / Star Tribune — Tue, 12 Mar 2024 16:35:00 GMT

The warmest winter on record in Minnesota has been economically "catastrophic" for some businesses around the state, Gov. Tim Walz said Monday, March 11 as he encouraged small businesses adversely affected by the dearth of snow to apply for federal disaster loans usually reserved for farmers.

State officials in Minnesota, as well as in Michigan and Wisconsin, reached out to the the U.S. Small Business Administration (SBA) to open up its economic injury disaster loans for droughts to businesses such as resorts that rely on ice fishing and snowmobiling, snow-removal services and other winter-related enterprises.

"We asked the SBA to try and be creative on this," Walz said at a news conference on Monday. "They did it."

Brian McDonald, a Minnesota director for the SBA, said this is the first time he's aware of these loans being used in this way.

"This is unprecedented," he said.

Under the loan program, businesses can borrow up to $2 million to cover their actual losses and won't have to pay interest on the loan for the first year, and a maximum rate of 4% after that. The loans are available for businesses in 81 of the state's 87 counties, where there are ongoing federal drought declarations.

The loans are not intended to replace lost sales or profits, he added, but can be used for debt, payroll and other bills that could have been paid had it not been for the mild winter. The deadlines vary depending on the county, but begin later this month and go through June.

Maple Plain-based Scott's Lawn Care usually has at least 10 snowfalls every winter that become "full plow events" for the company, said owner Scott Hartmann. But this winter, it only had one.

That resulted in a 40% loss in revenue and laying off 16 workers, or nearly half of his 37 full-time employees.

"As I look back to when I started Scott's Lawn Care as a high school student in 1996, no winter has come close to being this scarce," he said.

The Loppet Foundation's energy costs doubled this winter as it worked hard to provide a trail in Theodore Wirth Park that was used for a World Cup cross-country skiing event, said Claire Wilson, the group's executive director.

"We planned for a low snow year," she said. "But we did not plan for a snow drought in addition to a year where we could not make snow, where the temperatures were not low enough for us to do that."

In addition, the Loppet had 53% fewer participants in its ski lessons and school programs this winter.

It all added up to a near $1 million gap for her organization, she said.

"We want to be here when winter returns," she added.

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Federal assistance OK'd for Minnesota recovery from April flooding

West Central Tribune staff report — Thu, 20 Jul 2023 20:26:07 GMT

WASHINGTON, D.C. — Minnesota communities affected by severe storms and flooding April 11-30 will now have access to federal disaster assistance in their recovery.

The Federal Emergency Management Agency announced Thursday, July 20, that federal funding to repair or replace facilities damaged by the spring storms and floods will be available to the state, certain private nonprofit organizations, and eligible local and tribal governments.

The following counties will have access to the federal funds: Aitkin, Big Stone, Carlton, Chippewa, Clay, Grant, Houston, Kittson, Lac qui Parle, Lake of the Woods, Mahnomen, Marshall, Morrison, Norman, Pine, Pope, Renville, Roseau, St. Louis, Stevens, Swift, Traverse and Wilkin. The Prairie Island Indian Community will also be eligible.

According to the news release, Joseph P. Cirone has been named federal coordinating officer for federal recovery operations in the affected areas.

Additional designations may be made at a later date if warranted by the results of damage assessments.

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Congress reaches $1.5 trillion funding deal, including Ukraine aid

Reuters — Wed, 09 Mar 2022 13:31:00 GMT

WASHINGTON — U.S. lawmaker have reached a $1.5 trillion deal to fund the federal government for fiscal year 2022, including $13.6 billion in security and humanitarian aid for Ukraine and $15.6 billion for COVID, U.S. congressional leaders said on Wednesday.

The announced agreement comes as current funding for U.S. agencies is set to expire on Friday.

House Appropriations Committee Chair Rosa DeLauro, in a separate statement, said the plan includes $730 billion in non-defense funding and $782 billion in defense funding.

"This bipartisan agreement will help us address many of the major challenges we face at home and abroad: from COVID-19, to the vicious and immoral attack on Ukraine, to the need to lower costs for hardworking American families," U.S. House Speaker Nancy Pelosi and U.S. Senate Majority Leader Chuck Schumer said in a statement.

The omnibus spending plan will boost funding for domestic priorities, including money for infrastructure passed under an earlier bipartisan measure to revamp U.S. roads, bridges and broadband, they said.

It also includes new protections to protect U.S. infrastructure from cyberattacks "by Russia and other bad actors."

The measure will also reauthorize the Violence Against Women Act, Pelosi and Schumer said.

(Reporting by Susan Heavey; editing by Doina Chiacu and Andrew Heavens.)

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