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Stimulus money shapes state budget, but sloppy tracking is a concern.

President Obama’s economic recovery plan is starting to funnel money into Minnesota.  Last week, the legislature approved nearly 600 million in federal stimulus aid on roads, bridges and other transportation projects.

But there’s growing concern about how exactly this and other federal money is being tracked.

A joint legislative commission heard state agencies’ plans to safeguard funds provided by the federal stimulus Thursday.

The hearing came in response to findings by legislative auditor James Nobles that the Minnesota Department of Finance had not provided adequate oversight for federal funds received by government agencies in 2008.

In one case, the Minnesota Department of Health neglected to report a .5 million rebate for baby formula purchased by a nutrition program.

The sloppy accounting allowed a former director in the Department of Human Services to steal almost million over a period of five years, according to a report by the legislative auditor.

Rep. Loren Solberg, DFL-Grand Rapids, said the audit results were “shocking.”

“The most disturbing thing is that some of the audits from previous years, they have not yet been implemented (by the Department of Finance),” Solberg said.

The accounting slips put the department’s ability to deal with incoming federal stimulus dollars at question.

“It seems to me that there’s a huge concern with the ability of the agencies to be tracking in a very aggressive way the federal stimulus money,” Solberg said.

These revelations have raised doubts about Governor Pawlenty’s decision to appoint Dept. of Finance Commmissioner Tom Hanson, who is already responsible for the state budget, to oversee the federal economic recovery money.

Federal economic recovery money is turning out to be an important factor as state lawmakers attempt to solve the budget crisis.

Weeks ago, Senate leaders said they would cut 7 percent across the board from state spending. Now, it is obvious that will not be the case, thanks to federal economic stimulus money.

Higher education spending, for instance, would drop just 2.3 percent under the Senate plan. Public school education funding would fall 3.2 percent, and health and human services programs would experience a 5.9 percent drop. 

Govenor Pawlenty had to abandon his proposal to cut the health care benifits of over 113,000 Minnesotans in order to qualify for some of the federal economic recovery money.

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