Office of Inspector General established, powers and duties provided, enhanced grant oversight provided, retaliation prohibited, existing executive Offices of Inspector General transferred or repealed, fraud detection and prevention provided, conforming changes made, reports required, and money appropriated.

Establishes a new, independent Office of the Inspector General in the legislative branch that reports to the Legislative Audit Commission but can independently initiate investigations.

Transfers existing fraud investigation duties from departmental inspector general offices in Education, Human Services, and Children, Youth, and Families to the new centralized office effective July 1, 2025.

Grants the inspector general authority to access all government data regardless of classification, subpoena witnesses, and recommend temporary sanctions including withholding payments from recipients suspected of fraud.

Requires agencies to conduct unannounced monitoring visits for grants over $50,000 and annual visits for grants over $250,000, with stricter oversight for grants exceeding $500,000.

Mandates that agencies prominently display fraud reporting tools on their websites and requires grant agreements with nonprofits to include similar requirements for the life of the grant.

Expands the definition of fraud to include failure to correct errors in record maintenance after a state request, and clarifies that recipients of state funds include private entities under contract with the state.

Sets July 1, 2025 as the effective date for most provisions, with additional effective dates tied to when the inspector general formally assumes responsibility for specific departmental fraud investigations.

Appropriates unspecified amounts for fiscal years 2026 and 2027 to fund the new Office of the Inspector General and the legislative auditor, in addition to existing budgets.

Establishes a new centralized Office of the Inspector General in the legislative branch with authority to investigate fraud across all state programs, replacing separate department-level inspector general offices.

Abolishes existing fraud investigation duties in the Offices of Inspector General within Departments of Education, Human Services, and Children, Youth, and Families, transferring these responsibilities to the new centralized office.

Requires agencies to prominently display fraud reporting tools on their websites and mandates that grant agreements with nonprofits include requirements to highlight these reporting tools.

Requires the inspector general to establish a public website and telephone hotline for reporting suspected fraud, with options for anonymous reporting.

Increases grant monitoring requirements, requiring in-person unannounced visits for grants over $50,000 and annual visits for grants over $250,000.

Expands fraud definition to include failure to correct errors in record maintenance after a state request, and clarifies that fraud includes intentionally submitting false information to obtain greater compensation or benefits.

Gives the inspector general authority to recommend temporary sanctions including withholding payments to recipients with credible indicia of fraud, and requires agencies to cooperate with investigations.

Adds anti-retaliation protections for employees who report suspected fraud and prohibits state employees from interfering with OIG investigations.

Appropriates unspecified amounts from the general fund for fiscal years 2026 and 2027 to fund the new Office of the Inspector General and the legislative auditor.

Sets effective date of July 1, 2025 for most provisions, with staggered implementation dates for different departments based on when the inspector general certifies assumption of responsibility.

Establishes a new Office of the Inspector General in the legislative branch with authority to investigate fraud, waste, and abuse across all state programs and services.

Requires the OIG to establish a public fraud reporting hotline and website for anonymous reporting by state agency staff and the public.

Requires state agencies to prominently display fraud reporting tools on their websites and include these tools in grant agreements with nonprofit organizations.

Requires the OIG to notify and coordinate with the legislative auditor when receiving credible reports of suspected fraud within the auditor's authority.

Grants the OIG authority to require agencies to halt payments when fraud is suspected, and to impose temporary sanctions on recipients of state funds.

Abolishes existing agency-based inspector general offices in Departments of Education, Human Services, and Children, Youth, and Families, transferring their duties to the new centralized OIG.

Repeals existing statutes governing agency-based inspector general offices in Education (13.321, subdivision 12) and Human Services (127A.21).

Expands the definition of 'Agency' to include any entity subject to audit under the new inspector general sections, broadening the scope of oversight.

Appropriates unspecified amounts from the general fund for fiscal years 2026 and 2027 to support the new OIG and legislative auditor.

Sets effective date of July 1, 2025 for most provisions, with staggered implementation for department-specific transfers based on OIG certification.