The Office of the Legislative Auditor (OLA) released their review of the Feeding Our Future fraud scandal last summer, concluding that the Minnesota Department of Education (MDE) could and should have prevented the fraud. While the OLA documented gaps in MDE’s oversight, their audit narrowly focused on MDE’s supervision of Feeding Our Future within the summer food service programs. This limited scope, while fitting within the OLA’s jurisdiction, fails to capture the complexity of the scandal, which involved numerous actors beyond MDE.
A broader perspective is necessary, considering the federal government’s role and, crucially, the impact of the pandemic. Dozens of organizations participated in the fraud, a pattern of such schemes having proliferated over the past decade. Even if MDE had shut down Feeding Our Future, other organizations likely would have perpetuated the fraud. This is partly due to MDE’s lack of a robust fraud prevention strategy for the federal food programs, a fair criticism that requires context. Prior to the pandemic, these programs were relatively small and hadn’t experienced significant fraud. A comprehensive fraud prevention strategy would have been unusual for programs of that size, with only larger programs like Child Care Assistance and Medical Assistance possessing such structures.
The MDE food programs became vulnerable because of the dramatic, overnight increase in spending and relaxed regulations facilitated by the federal government. The decision to expand these programs and loosen rules was made at the federal level. The USDA might have ensured proper controls in all 50 states before expansion, but this would have caused significant delays. A Harvard-University of Washington study indicated that the expanded programs served 1.5 billion meals monthly in 2020. The prioritization of feeding children during the pandemic necessitated these trade-offs.
The OLA also examined MDE’s failure to terminate Feeding Our Future in early 2021 using the “serious deficiency” process. However, the OLA’s timeline reveals that the FBI’s involvement, beginning in February 2021 and launching a criminal investigation in May, necessitated MDE’s inaction to avoid compromising the investigation. MDE’s termination of Feeding Our Future on January 20, 2022, coincided with the FBI raids, demonstrating the interconnectedness of these events.
The delayed start of the federal investigation warrants attention. MDE communicated concerns to the USDA in summer 2020 and the USDA Office of Inspector General in fall 2020. The likely reason for the delay was the overwhelming workload faced by federal agencies during the early pandemic months.
Despite the timing, the criminal prosecutions and recovery of funds are positive outcomes. The perpetrators are being held accountable. Retrospectively analyzing events and hypothesizing alternative outcomes is always challenging, especially given the $250 million loss.
From the perspective of someone who managed state government during the pandemic, the Feeding Our Future fraud represents a perfect storm: a pandemic, school closures creating food insecurity for children, a small program with limited oversight dramatically expanded, a state agency lacking investigative capacity, a slow federal response, and opportunistic criminals. The possibilities of what could have been done differently are numerous.
While MDE might not have been able to single-handedly stop Feeding Our Future, the OLA correctly highlights the inadequacy of resources and authority in many state agencies to address fraud. Thankfully, the governor and legislature are addressing this issue by adding inspector generals and tightening grant requirements. As one cybersecurity expert noted regarding a large IT outage: “everyone runs lean until it’s too late.” The experience serves as a lesson for the future.
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