The proposed "Fraud Isn't Free Act" aims to enhance accountability and corrective measures in state programs affected by fraud. It mandates that agency heads report any suspected fraud to the commissioner of management and budget and the Legislative Audit Commission within 30 days. Agencies are required to submit a corrective action plan detailing the suspected fraud, measures taken to prevent future occurrences, and plans for recovering misappropriated funds. Additionally, the act stipulates that enrollment in affected programs must be suspended until compliance with specified requirements is achieved, and employees involved in the fraud must be dismissed, with a five-year prohibition on state employment for those discharged.

Furthermore, the act introduces budget reductions for agencies found to have committed fraud, including a 10% reduction in unexpended allotments and a 25% reduction in the agency head's salary. It also requires that future budget forecasts incorporate estimates of fraud's impact on state finances and summarize actions taken to combat fraud. The bill repeals the sunset provision for agency payment withholding authority, ensuring that such measures remain in effect indefinitely. Overall, the act seeks to strengthen the state's response to fraud and improve financial oversight in public programs.

Statutes affected:
Introduction: 16A.103