The Minnesota Office of the Legislative Auditor says the Department of Labor and Industry did not comply with some state requirements for the Frontline Worker Pay Program leading to many ineligible individuals getting paid pandemic-era funds.

Following a 45-day application period from early June through late July 2022, over one million people received maximum payments of $487 through the program. In a report released Tuesday, the state’s legislative auditor said that the Department of Labor and Industry approved frontline worker payments to 40 percent of applicants who were either ineligible or their eligibility could not be determined.

“I think it’s kind of stunning. It’s not what I was expecting. We expect that programs work. The error rate here is extremely high,” said state Rep. Rick Hansen, DFL-South St. Paul, chair of the bipartisan Legislative Audit Commission.

According to the report, the Department of Revenue did not verify the adjusted gross income for all applicants and the Department of Labor and Industry depended on an applicant’s self-reported employment details when determining eligibility.

During the 16-month investigation, the state’s auditor’s office found 140 applications that were identified as fraudulent. The applicants used temporary email addresses and identities of deceased individuals.

The office also concluded that contractors hired by the Department of Labor and Industry and Minnesota Information Technology Services did not ensure that frontline worker pay data was retained in accordance with contract provisions.

“To not retain data on any program that we implement is to me completely unacceptable,” said state Sen. Mark Koran, R-North Branch, vice chair of the Legislative Audit Commission.

After months of negotiations, the state set aside $500 million for frontline employees who had to put in extra hours caring for COVID-19 patients and other essential work. They also had to meet income requirements.

Labor commissioner Nicole Blissenbach said verification requirements contributed to payment delays that threatened to extend even longer.

“The overarching theme of the findings is that the issue is with the program itself, not how it was implemented,” Blissenbach said.

The Legislative Auditor’s office recommends that the Labor and Revenue departments should recoup payments made to ineligible applicants and to those who engaged in fraudulent behavior.

MPR News politics fellow Ellie Roth contributed to this story.