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Curtis Gilbert
St. Paul, Minn.

Legislative auditor to investigate community action agencies

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The state Office of the Legislative Auditor plans to launch an investigation into the state's oversight of community action agencies.

The Minnesota Department of Human Services announced last month it would terminate all contracts with Community Action of Minneapolis after it found the organization had overcharged state and federal grant programs for more than $600,000 in administrative costs. An audit found $226,679 in "unallowable" expenses for travel, food, alcohol, spas, golf and pay bonuses for its employees and executives.

• More: State agencies cut ties with Community Action of Minneapolis

Legislative Auditor Jim Nobles wants to find out why no one discovered those problems sooner. He plans to begin his inquiry early next year.

"Specifically looking at just how well DHS and other agencies have been overseeing the grants that have been going to community action organizations," Nobles said. "It is a significant area of concern. It's a lot of money."

Department of Human Services officials say they welcome the audit.

Minnesota's 26 community action agencies currently receive more than $10 million in grants from the department.

Collectively, the organizations reported more than $230 million in total revenue on their most recent tax filings available online. Most of the funds came from state and federal grants.

The federal government created the network of private non-profit organizations in the 1960s as part of the War on Poverty.

They provide a variety of services to low-income Minnesotans, in areas including housing, education and employment.

Arnie Anderson, executive director of the Minnesota Community Action Partnership, said the problems at the Minneapolis organization were not typical.

"Community action agencies are actually very proud of our stewardship of public funds," Anderson said. "And we have a very hard-earned reputation for being trustworthy. By a mile, there aren't any non-profit agencies in the state that receive closer scrutiny."