Office of the Legislative Auditor - Financial Audit Division

Recommendation

The Legislature should consider the amount of risk the state is willing to accept when establishing programs quickly and with eligibility conditions that rely on self-attestation. (p. 12)

Finding 1

The departments of Labor and Industry and Revenue approved frontline worker payments to applicants who were not eligible and to applicants whose eligibility we could not determine. (p. 14)

Recommendations

• The Department of Revenue should recoup payments made to ineligible applicants.
• The departments of Labor and Industry and Revenue should determine whether those applicants whose eligibility could not be determined were actually eligible for a frontline worker payment.

Finding 2

The Department of Labor and Industry approved frontline worker payments to individuals whose applications contained fraud indicators without investigating whether the applicants were legitimate. (p. 20)

Recommendations

• The Department of Revenue should recoup payments made to applicants who received a payment using the identity of another individual.
• The Department of Labor and Industry should thoroughly review all applications with fraud indicators to determine whether frontline worker payments were made to ineligible applicants.

Finding 3

The Department of Revenue did not verify the adjusted gross income for all applicants. (p. 23)

Recommendation

The Department of Revenue should use additional methods to verify adjusted gross income for those applicants that did not have a tax return on file in Minnesota for tax years 2020 or 2021.

Finding 4

The Department of Labor and Industry and Minnesota Information Technology Services did not ensure that the contractor and subcontractors retained frontline worker pay data in accordance with contract provisions.

The Department of Labor and Industry and Minnesota Information Technology Services did not ensure that the retention of frontline worker pay applicant data was required by the Department of Labor and Industry’s records retention schedule or contracts with third parties. (p. 26)

Recommendations

• The Department of Labor and Industry and Minnesota Information Technology Services should ensure data retention requirements are included in all contracts.
• The Department of Labor and Industry and Minnesota Information Technology Services should ensure data is appropriately retained in accordance with contract provisions.
• The Department of Labor and Industry and Minnesota Information Technology Services should ensure the state retains data necessary for making program decisions and requires the same data be destroyed by third parties upon completion of their contract obligation.
• The Department of Labor and Industry should include the retention of data collected by contractors and subcontractors in its records retention schedules for its programs.