Mark Lee Greenblatt is a former Interior Department inspector general and former chair of the Council of the Inspectors General on Integrity and Efficiency.
The massive fraud scandal unfolding in Minnesota should be a warning for Maryland lawmakers and Gov. Wes Moore (D).
Investigators estimate that as much as $9 billion in fraud tied to Minnesota’s social services programs slipped through the state’s oversight systems. The episode exposed a troubling reality: The traditional safeguards many states rely on to protect taxpayer dollars are not always equipped to detect fraud on such a scale.
Maryland operates under a remarkably similar oversight structure. If the state does not strengthen its watchdog system, it risks learning the same lesson the hard way.
In Minnesota, oversight responsibilities are scattered over a patchwork of entities, including inspectors general embedded within specific departments. The state has hitherto lacked a single watchdog with authority across the entire government, but lawmakers are now considering legislation to establish a statewide inspector general.
Maryland’s system looks much the same. The state relies on a mix of oversight entities and inspectors general within certain agencies. Counties also have their own IGs, but they are not the answer to preventing and detecting fraud in the state government. And in a recent dustup, the Maryland attorney general’s office issued a devastating letter that could eviscerate the effectiveness of county IGs by limiting their access to records, delaying or blocking their investigations, or narrowing the scope of their oversight work.
Minnesota’s failures expose the limits of relying on scattered oversight offices. A collection of small watchdog units across agencies and jurisdictions is no substitute for a strong centralized office capable of identifying fraud that crosses bureaucratic lines.
Small oversight offices also mean limited resources. Agency inspectors general can be understaffed and stretched over large jurisdictions. A statewide official can consolidate administrative functions and direct more resources toward auditors and investigators whose job is to detect fraud and protect taxpayer dollars.
Independence is equally important. Inspectors general embedded within agencies typically report to agency leadership. A statewide IG, by contrast, often reports independently to the governor, the legislature or an oversight board. That structure helps ensure that investigators can pursue evidence wherever it leads without pressure from the agencies they oversee.
Without a centralized watchdog, some agencies may receive little or no independent oversight. An inspector general with authority over the entire state government would have access to the full scope of spending, making it easier to detect patterns of fraud, emerging risks and systemic weaknesses across departments.
Moore has resisted establishing a statewide inspector general, arguing that Maryland already has sufficient oversight. He has pointed to a two-year contract with a private consulting firm tasked with identifying waste in state government. According to the governor’s office, the firm has already identified $29 million in waste.
A consulting contract, however, is not a substitute for independent oversight. Preventing fraud requires experienced auditors and investigators dedicated to full-time oversight, not a rotating cast of consultants tied to short-term contracts.
Moreover, consulting contracts that compensate firms based on the amount of waste they identify can create perverse incentives. Oversight professionals should operate like baseball umpires, calling balls and strikes based on the evidence — not financial bonuses tied to the outcome.
Moore has also cited the Governor’s Office of Performance Improvement as evidence that Maryland already has sufficient oversight mechanisms. GOPI’s focus on improving efficiency and modernizing government is commendable. But performance management is not the same thing as independent oversight. GOPI is essentially a council of agency leaders working together to improve performance. That model carries an obvious risk: agency heads policing themselves. Serious problems can go unreported if no one has a strong incentive to surface politically uncomfortable issues.
Independent watchdogs serve a different function. Inspectors general conduct audits and investigations, publish reports detailing findings and recommendations, and refer cases for criminal prosecution when fraud is uncovered, none of which GOPI can do.
Maryland does have an Office of Legislative Audits. That office has uncovered nearly $1 billion in questionable transactions throughout agencies and more than $760 million in unemployment overpayments that are deemed uncollectable. But legislative auditors cannot conduct investigations or pursue fraud cases. Investigators need tools such as subpoena authority, access to law enforcement databases and the ability to work with prosecutors to bring criminal charges.
Preventing fraud is not complicated. But it requires independent oversight with the authority, resources and expertise to follow the evidence wherever it leads. Establishing a statewide IG would be a powerful step toward protecting taxpayer dollars and strengthening accountability across Maryland government.
The Maryland General Assembly is now considering legislation to do that. Lawmakers and the governor should seize the opportunity. Governments often strengthen oversight only after a scandal exposes major failures. Maryland has the chance to act before that happens.
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