Nebraska auditor inundated with anonymous tips of fraudulent government spending

Nebraska State Auditor Mike Foley gestured to a wall of photos in his Capitol office, some of them mugshots. This is the “Wall of Shame,” he said, featuring pictures of former state employees who were caught abusing taxpayer money.

“These people have all been prosecuted in some manner,” Foley said on Monday. “There’s still room for more.”

His office is inundated with anonymous tips every day, some from state employees and some from Nebraska residents who suspect that officials are spending public money in ways they shouldn’t, whether it’s improper use of state vehicles and credit cards or interactions with nonprofits.

“Billions and billions of dollars goes out the door to not-for-profits, and a lot of these entities are not very well monitored and they don’t follow the rules,” Foley said. “It’s just all kinds of issues, where somebody is giving a contract to their cousin or something, and why is this? How is this possible?”

Foley's office investigated the Department of Health and Human Services Women, Infants and Children program, reporting Tuesday that 11 state employees with significant incomes received benefits intended for low income families.

Anonymous tips are on the rise, Foley said, although he didn’t say how many tips the office got last year. The office gets at least one per day, and he said it’s like nothing he’s ever seen before.

“It just seems like impropriety is on the increase,” Foley said. “I used to think local governments were (made up of) pretty honest people, and I think by and large they are. But there’s more and more bad apples that kind of get into the system and start playing games with money. And it’s not their money.”

The office typically gets a spike in anonymous tips whenever it publishes the final report of an audit it’s been working on for months, Foley said.

It can sometimes be difficult to sort through the tips, especially if whoever submitted a tip did not leave contact information for a follow up or include documentation to back up their allegations. Foley said some tips appear to come from an employee who is trying to get somebody else in trouble if they’re mad at them, but about 10% of tips are what he calls “legitimate” flags of fraud. These come on top of the several legally required audits his office must carry out every year, such as inquiries into the state lottery system or the university system.

“It’s a tough balancing act,” Foley said, adding that he is very grateful to all of the tipsters who want to keep the government running as it should.

Foley noted that the spike in anonymous tips coincides with national concerns about waste and abuse, particularly when billionaire Elon Musk was heading up the Department of Government Efficiency at the federal level last year. Foley spoke on the issue as the GOP-led House Oversight Committee released a report Monday stating that Democratic Governor Tim Walz and the Minnesota attorney general knew about billions of dollars of benefit fraud.

“I’ve had some people say, ‘Hey, I saw what happened in Minnesota, what’s going on in Nebraska?’” Foley said. “I say ‘We’ve got the exact same problems here, smaller scale, smaller dollars, same issues of fraudulent contractors worming their way into the system and getting government money.’”