Plain English Breakdown
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HF4914 • 2026
Fraud risk scoring and fraud risk score benchmarks required for grants to political subdivisions, pilot program established, and report required.
Fraud risk scoring and fraud risk score benchmarks required for grants to political subdivisions, pilot program established, and report required.
Passed Legislature
This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.
Bill History
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2026-04-09
House
Introduction and first reading, referred to State Government Finance and Policy
Official Summary Text
Fraud risk scoring and fraud risk score benchmarks required for grants to political subdivisions, pilot program established, and report required.
Current Bill Text
Read the full stored bill text
A bill for an act relating to state government; requiring fraud risk scoring and fraud risk score benchmarks for grants to political subdivisions; establishing a pilot program; requiring a report; proposing coding for new law in Minnesota Statutes, chapter 6. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. new text begin [6.94] FRAUD RISK SCORING SYSTEM. new text end new text begin Subdivision 1. new text end new text begin Definition. new text end new text begin For purposes of sections 6.94 to 6.96, "fraud risk score" means a standardized numerical or categorical assessment that measures the relative risk of fraud, waste, abuse, or mismanagement within a political subdivision based on internal controls, financial practices, governance structures, audit findings, and other risk indicators determined by the state auditor. new text end new text begin Subd. 2. new text end new text begin Fraud risk score required. new text end new text begin The state auditor must assign a fraud risk score to every political subdivision at least once every two years, or more frequently if determined necessary by the state auditor. new text end new text begin Subd. 3. new text end new text begin Methodology. new text end new text begin The state auditor must: new text end new text begin (1) develop and publish a uniform fraud risk scoring methodology applicable to political subdivisions; new text end new text begin (2) periodically review and update the methodology to reflect emerging risks, best practices in fraud prevention, and audit findings; and new text end new text begin (3) provide guidance and technical assistance to political subdivisions. new text end new text begin Subd. 4. new text end new text begin Data collection. new text end new text begin The state auditor may require political subdivisions to submit financial, operational, governance, and internal control information necessary to calculate fraud risk scores. Data submitted to the state auditor under this subdivision are subject to applicable data practices laws. new text end new text begin Subd. 5. new text end new text begin Public dashboard. new text end new text begin (a) The state auditor must establish and maintain a publicly accessible online dashboard that displays fraud risk scores for each political subdivision. new text end new text begin (b) At a minimum, the dashboard must include: new text end new text begin (1) the most recent fraud risk score for each political subdivision; new text end new text begin (2) a label or graphic representing the score; new text end new text begin (3) the date the score was issued; new text end new text begin (4) an explanation of the scoring scale and the benchmark established under section 6.95; and new text end new text begin (5) historical scores, if available. new text end Sec. 2. new text begin [6.95] FRAUD RISK BENCHMARK FOR GRANT ELIGIBILITY. new text end new text begin Subdivision 1. new text end new text begin Benchmark established. new text end new text begin The state auditor, in consultation with the commissioner of management and budget and the Legislative Audit Commission, must establish a minimum acceptable fraud risk benchmark score. The benchmark must represent an acceptable level of fraud risk and internal control maturity, as determined by the state auditor. new text end new text begin Subd. 2. new text end new text begin Grant eligibility condition. new text end new text begin Except as provided in subdivision 3, a political subdivision must attain or exceed the fraud risk benchmark established under subdivision 1 to be eligible for a grant from any state department or agency. new text end new text begin Subd. 3. new text end new text begin Corrective action plans. new text end new text begin A political subdivision that fails to achieve the benchmark score may submit a corrective action plan to the state auditor. The plan must identify deficiencies, proposed remediation steps, and a timeline for improvement. The state auditor may grant temporary grant eligibility to the political subdivision if the state auditor determines that the corrective action plan is sufficient. new text end Sec. 3. new text begin [6.96] RULEMAKING. new text end new text begin The state auditor may adopt rules necessary to implement sections 6.94 and 6.95, including fraud risk scoring criteria, reporting formats, and corrective action plan requirements. new text end Sec. 4. new text begin PILOT PROGRAM. new text end new text begin Subdivision 1. new text end new text begin Pilot required. new text end new text begin The state auditor must establish a pilot program to test and refine the fraud risk scoring system required under Minnesota Statutes, sections 6.94 to 6.96. new text end new text begin Subd. 2. new text end new text begin Duration. new text end new text begin The pilot program must operate for a period of not less than 18 months and not more than 24 months following the effective date of this act. new text end new text begin Subd. 3. new text end new text begin Scope and limitations. new text end new text begin (a) During the pilot program, fraud risk scores may not be used to determine eligibility for grant funding under Minnesota Statutes, section 6.95, and the state auditor must clearly indicate that any fraud risk scores posted on the public dashboard are pilot results and not final determinations. new text end new text begin (b) Participation in the pilot program must not result in adverse funding consequences for participating political subdivisions. new text end new text begin Subd. 4. new text end new text begin Evaluation and adjustment. new text end new text begin (a) The state auditor must evaluate the pilot program and may revise the fraud risk scoring methodology, data requirements, and benchmarks based on pilot results. new text end new text begin (b) The state auditor must consult with political subdivisions and relevant stakeholders when making revisions under this subdivision. The state auditor must consult the Legislative Audit Commission before adjusting the grant eligibility benchmark. new text end new text begin Subd. 5. new text end new text begin Report. new text end new text begin No later than 60 days after completion of the pilot program, the state auditor must submit a report to the chairs and ranking minority members of the legislative committees with jurisdiction over local government. The report must include a summary of pilot findings and any resulting modifications to the fraud risk scoring methodology or benchmark score. new text end Sec. 5. new text begin EFFECTIVE DATE. new text end new text begin (a) Unless otherwise specified, this act is effective July 1, 2026. new text end new text begin (b) Section 1, subdivision 2 is effective July 1 following the state auditor's submission of a pilot program report under section 4, subdivision 5. new text end new text begin (c) Section 2, subdivision 2 is effective July 1 following the effective date of paragraph (b). new text end new text begin (d) The state auditor must promptly notify the revisor of statutes of the dates that section 1, subdivision 2, and section 2, subdivision 2, take effect. new text end