Major failures by Minnesota’s Education Department allowed the rampant misuse of a federal program meant to feed children during the pandemic, according to a state audit report released Thursday.
The Minnesota Department of Education did not properly oversee Feeding Our Future, the nonprofit at the center of an alleged $250 million Covid relief scheme that federal prosecutors say is the largest of its kind, Minnesota’s Office of the Legislative Auditor said in a 103-page report.
The U.S. Attorney’s Office for the District of Minnesota has charged 70 people in the massive fraud scheme involving Feeding Our Future. Eighteen have pleaded guilty and five were convicted last week, officials said.
The Education Department oversees federal programs that reimburse participants that provide free, nutritious meals to children and low-income families.
Feeding Our Future was a program participant. But prosecutors said the nonprofit’s employees recruited people and entities to take advantage of the program for their personal gain.
Feeding Our Future went from receiving and disbursing about $3.4 million in federal funds in 2019 to nearly $200 million in 2021, prosecutors said.
The Education Department did not hold the nonprofit accountable to program requirements, failed to act on warning signs and was “ill-prepared to respond to the issues it encountered with Feeding Our Future,” the audit said.
“We found that MDE’s inadequate oversight of Feeding Our Future created opportunities for fraud,” the auditor’s office said in a statement.
Under federal regulations, the Education Department was responsible for reviewing and approving participant applications and conducting monitoring visits and compliance reviews. The audit said the Education Department’s only review of Feeding Our Future “resulted in serious findings” that required a follow-up, which was never done.
The review, which included visits to four Feeding Our Future sites, occurred in 2018, about four months after the nonprofit made its first meal claims. That review found that at least one site failed to collect child enrollment information, incorrectly inflated average daily attendance, claimed unallowable food service expenses and improperly observed or counted meals and snacks, according to the audit.
The Education Department did not conduct any in-person follow-up review because of the pandemic, the audit said.
The report laid out other major deficiencies. It said the Education Department received at least 30 complaints about Feeding Our Future from 2018 to 2021, but it did not investigate some complaints, “despite their frequency or seriousness,” or it conducted “inadequate” probes.
The Education Department also had to provide guidance and training to Feeding Our Future’s employees, and it had the power to terminate the group’s participation in the program if warranted, according to the audit. The audit said the office “did not always take steps to verify statements made by Feeding Our Future prior to approving its program applications.”
In a written response to the report, Education Commissioner Willie Jett disputed the lax oversight claims made in the report and blamed the individual defendants accused in the scheme.
“What happened with Feeding Our Future was a travesty — a coordinated, brazen abuse of nutrition programs that exist to ensure access to healthy meals for low-income children,” Jett said. “The responsibility for this flagrant fraud lies with the indicted and convicted fraudsters.”
After the Education Department made “extensive findings” about the nonprofit’s shortcomings, Jett said his office reached out to the U.S. Agriculture Department’s Midwest Regional Office for help multiple times, as well as to the USDA’s Office of the Inspector General and the FBI. The commissioner said the Education Department stopped approving Feeding Our Future’s new applications in December 2020.
Jett, who became commissioner in January 2023, said the Education Department’s oversight of the federal program is “frequently reviewed” and improved upon. “MDE has proactively made changes for multiple years to enhance program oversight and integrity,” he said.
The Education Department faced additional pressure Thursday when it received a letter from a group of Congress members demanding more information, including emails and texts between the Education Department and the FBI.
The audit report comes nearly a week after a jury found five of seven defendants guilty of most of the crimes they faced related to the Covid relief scheme. The federal fraud trial was the first of several related to the alleged scheme.
The defendants in the first trial collectively received more than $40 million in federal funds from April 2020 to January 2022, according to a criminal complaint. While the defendants claimed to have fed millions of children with those funds, prosecutors said they used most of the money to buy multiple homes and properties and luxury vehicles.
Five of them — Abdiaziz Shafii Farah, Mohamed Jama Ismail, Abdimajid Mohamed Nur, Mukhtar Mohamed Shariff and Hayat Nur — were convicted of various financial crimes last Friday.
The trial’s end was overshadowed by an alleged incident of jury tampering.
On the eve of jury deliberations, a juror who was later dismissed said she had been offered nearly $120,000 in cash in exchange for voting to acquit.
It’s unclear who offered the juror the bribe. The U.S. attorney’s office declined to comment on the jury tampering investigation, and the FBI said the investigation was ongoing.
The FBI searched one defendant’s home in Minnesota last week. On Wednesday, the agency said it conducted more “court authorized law enforcement activity” at more than one home related to the investigation but declined to provide more information.
Attorneys for the five people convicted did not respond to requests for comment.
The juror said a woman delivered a gift bag full of cash and left it with a relative, according to an FBI search warrant affidavit. She said she was not home when the cash was delivered.
The jurors’ names have not been made public, but the visitor knew the woman’s first name and told her relative that there would “be more of that present tomorrow” if the juror agreed to vote not guilty, the affidavit said.
The FBI said all of the defendants, their attorneys and the prosecutors had access to that juror’s identifying information.
In a detention order, U.S. District Judge Nancy Brasel said it is “likely” that at least one defendant was involved in the bribe attempt.
Melissa Chan is a reporter for NBC News Digital with a focus on veterans’ issues, mental health in the military and gun violence.
