Minnesota Paid Dearly for Saving $1 Million [View all]

For an example of penny-wise-pound-foolish policymaking, it’s hard to beat Minnesota’s decision to eliminate its elected state treasurer position. It helped pave the way for one of the biggest frauds in American history. When no statewide official is clearly responsible for safeguarding public money, taxpayers pay the price.

In 1998 voters approved a constitutional amendment scrapping the treasurer’s office after supporters of the move argued that the office’s duties were mostly clerical and that eliminating it could save up to $1 million a year. Effective in 2003, the treasurer’s authority was scattered across state agencies, leaving billions of dollars in the hands of appointed officials and career staff who didn’t answer directly to voters. What had been a public trust became an internal conversation among bureaucrats, largely shielded from public scrutiny.

That independent watchdog mattered. An elected treasurer does more than sign checks or track budgets. The office serves as the people’s financial guardian, reviewing contracts, scrutinizing expenditures and sounding the alarm when the numbers stop adding up. Take away that clear line of accountability, and early warnings are easy to ignore or brush aside deliberately.

The cost of Minnesota’s mistake exploded during the pandemic with the Feeding Our Future scandal. Prosecutors allege that a network of operators stole nearly $250 million meant to feed children, billing for 91 million phantom meals and spending the proceeds on mansions, luxury cars, jewelry and real estate. Despite mounting red flags, the Minnesota Department of Education kept payments flowing, worried about lawsuits and discrimination complaints, while pandemic-era waivers loosened already weak oversight.

When nearly a quarter-billion dollars can vanish from one state program before anyone truly notices, taxpayers are justified in asking who was supposed to be minding the store. The uncomfortable answer is that no one elected by the people held that responsibility or had the mandate and clout to stop the scheme.

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Mr. Oleka is CEO of the State Financial Officers Foundation.