Sen. Joni Ernst introduces fraud legislation targeting federal programs

EXCLUSIVE: Iowa Republican Sen. Joni Ernst is introducing legislation Thursday targeting fraud in federal programs — a proposal that would establish early warning triggers to report suspected scams and push agencies to recover taxpayer dollars, Fox News Digital has learned.

“It is absolutely unacceptable that the fraud plaguing Minnesota could end up costing taxpayers more than $9 billion,” Ernst told Fox News Digital. “My law putting an N to learn fraud will ensure this never happens again by putting more safeguards in place to detect scams as early as possible and requiring the recovery of any money taken from taxpayers.”

Ernst’s office said the bill is designed to combat fraud on two fronts: tightening the rules around child care payments and creating new spike alerts in health care programs to quickly report suspicious spikes, while also pushing the federal government to recover improper payments.

If passed, the bill would require state plans tied to federal child care funds to pay providers based on documented attendance — not just enrollment — to prevent taxpayer dollars from being spent on child care that never took place.

MINNESOTA FRAUD CASE IS A “CANARY IN THE COAL MINE” FOR GOVERNMENT SYSTEMS – INCLUDING ELECTIONS AND ATTORNEY WARS

Iowa Republican Sen. Joni Ernst is introducing legislation that would flag potential fraud and push agencies to recover funds from defrauded taxpayers. (Alex Wong/Getty Images)

It also points out that states can reimburse providers after services are provided rather than paying upfront. Providers receiving federal funds would be required to track attendance and retain those records for seven years, making them available for audits by the Department of Health and Human Services, the Attorney General and the Comptroller General.

On the health care front, the legislation would create new reporting requirements related to sharp increases in health care bills and costs. States would be required to notify the Department of Health and Human Services when the amount paid for a service increases by more than 100% in a year, or if the number of providers requesting payment increases by 100% in a year.

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Beyond early detection, the bill aims to force agencies to recover funds defrauded from taxpayers or received in error.

Minnesota Governor Tim Walz speaks during a town hall meeting at the DeYor Performing Arts Center April 7, 2025 in Youngstown, Ohio. A crowd of 2,600 people filled the room to ask questions and listen to Governor Walz’s ideas. (Jeff Swensen/Getty Images)

It would direct the Office of Management and Budget to provide guidance to federal agencies to ensure collection of improper payments and require inspectors general to report annually the amount of improper payments collected by each agency.

Minnesota fraud whistleblower says ‘lack of guardrails was pretty shocking’

The legislation comes in response to the widespread fraud scandal that continues to plague Minnesota. Dozens of arrests have been made, most of them from the state’s large Somali population, as investigators uncover hundreds of millions of dollars in fraud swindled from taxpayers through welfare and social services programs. Federal prosecutors have estimated the fraud could total $9 billion.

“Scammers in Minnesota and everywhere else will soon ‘learn’ the hard way that in the age of DOGE, crime no longer pays,” Ernst added in a comment to Fox Digital, referring to the viral “Quality Learing Center.”

Minnesota’s Quality Learning Center has been found at the center of an alleged child care fraud scandal in the state. (Madelin Fuerste / Fox News Channel)

Fox News Digital has learned that Ernst will also name Minnesota Gov. Tim Walz as the January recipient of his office’s “Squeal Award” for “failing to stop rampant fraud in his own backyard.” Ernst gives various lawmakers and government fraud scandals the Squeal Award each month to shine a light on “out of control waste.”

The governor abandoned his re-election effort earlier in January due to fallout from the fraud scandal. Walz, who has been governor since 2019, took ownership of the fraud as it occurred under his watch, but argued that the multibillion-dollar figures had been “sensationalized” by Republicans.

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Ernst has long positioned itself as one of the Senate’s top watchdogs on waste and fraud, working with Congress and the Trump administration to flag questionable spending.

She launched and leads the Senate DOGE Caucus as President Donald Trump prepared to reclaim the Oval Office, which aims to choke government spending, cut bureaucracy and increase transparency, generating more than $15.1 billion in real savings.