MINNEAPOLIS — Legislation meant to help address the type of fraud at the heart of a sprawling crisis in Minnesota is headed to Gov. Tim Walz’s desk after sailing through a final legislative vote Monday.

The bill establishes an independent office of inspector general to investigate and root out fraud in state programs. State senators approved it last year, but it didn’t make it out of the Minnesota House in the waning hours of the session.

When lawmakers returned to St. Paul in February, combatting fraud was among their priorities after FBI raids targeted providers in several Medicaid-funded programs.

Federal authorities have charged people with defrauding programs meant to help seniors and disabled Minnesotans find housing and provide services to young people with autism. State officials have designated 14 programs as vulnerable to fraud, and federal prosecutors have said fraud in Medicaid services could reach into the billions.

In a legislative session marked by clashes over gun violence legislation and responding to the federal government’s unprecedented immigration crackdown, combatting fraud has proved a rare area of bipartisan agreement. Though that work has come in fits and starts, legislative leaders in both parties have named it a priority. More anti-fraud provisions may follow, but the creation of an inspector general was central to these efforts.

Lawmakers are considering additional resources this session — from updated software to additional investigators — and strengthening penalties to deal with fraud.

The bill struggled in the early weeks of session as its House DFL sponsor, Rep. Matt Norris, DFL-Blaine, sought to amend it and House Republicans accused him and Walz of trying to sink it. The final bill establishes the office, which will both investigate and recommend policies to prevent fraud. The legislation allows legislators to recommend candidates to the governor.

Walz is expected to sign the bill.

It creates an option to establish a law enforcement branch in the office that was central to the bipartisan compromise struck as the bill made its way through committee. Some Democrats have expressed concern that establishing that branch in the office would duplicate efforts already undertaken by the state Bureau of Criminal Apprehension.

But it delays its establishment until 2028 and leaves it to the next Legislature to fund after this fall’s elections.

The legislation would cost between $11 million and $12 million per year, including both the costs to operate the office and additional anti-fraud responsibilities required of other state agencies, Norris said after House passage last week.

After a nearly two-hour debate in the House last week, members voted 127-5 to establish the office. The bill returned on Monday to the Senate, which concurred with House members’ amendments unanimously.

“This is not a message bill,” said Sen. Heather Gustafson, DFL-Vadnais Heights. “We did not pass it to have something to say about a problem. We passed it to have something to solve a problem.”

Gustafson was the chief DFL sponsor of the legislation in the Senate. Her GOP cosponsor, Sen. Michael Kreun, R-Blaine, said ahead of the vote that Minnesotans are angry about the fraud in state programs. He acknowledged the creation of an inspector general “may not be a silver bullet to stop all fraud” but said it would act as a watchdog for taxpayers.

“State government here in Minnesota needs to regain the trust of Minnesotans,” Kreun said, “and this bill will go a long way to hopefully do that.”

Despite the acrimonious road to passage, Norris said last week ahead of the House vote that the bill is stronger than the version that passed the Senate last year.

“It ensures the OIG will be ready to do the critical work that Minnesotans expect it to do on Day One,” Norris said ahead of the House vote, “and it will help send a clear message that the days of defrauding Minnesota’s public programs [are] over.”

Rep. Patti Anderson, R-Dellwood, said she expected to find out in the coming years how Minnesota’s government allowed fraud to flourish.

“We’re doing some good things now, and the agencies are admitting the problems because it’s so obvious, and we have a governor who is not running again because it’s so obvious.”

During the House floor debate, Republicans lauded the legislation as necessary to root out fraud while some Democrats saw it as wasteful and duplicative of the BCA’s efforts.

Democrats tried and failed to remove the law enforcement branch of the new office with Rep. Kelly Moller, DFL-Shoreview, noting the bill doesn’t appropriate any funds for it. Moller said the BCA has reviewed hundreds of referrals related to alleged fraud in state programs already this year and is investigating more than 100.

But Anderson argued the new law enforcement authority will be necessary to ensure the office is independent from the governor and Legislature, saying Minnesotans have lost faith in state programs.

“The buck needs to stop with someone,” Anderson, “and they need to be wholly independent.”

Moller’s amendment failed on a party-line vote.

In a brief Senate debate before Monday’s vote, Sen. John Marty, DFL-Roseville, shared the concerns of House Democrats regarding the duplicative efforts. He voted against the bill last year. But he said he appreciated the delay in setting up that agency and voted for the bill despite his reservations.

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