Paper trails! You audit later and nail people afterwards; when you put up protective BS then people bitch about red tape etc. In emergencies, you get lax but keep receipts. Even when well run, this is how it's done.
Unlike many other states, MN has an ELECTED state auditor!
Here in MN, we investigated fraud and found plenty of exploiters. The top one in the recent scandal being a white lady...already jailed. Other states quite likely had just as much fraud but they weren't taking receipts or auditing and once something was found they probably didn't expand and look broadly over other areas. We have an independent auditor office. The funny part is that a non-citizen can just ask ICE to be deported and completely skip the jail sentence! Already has happened! No jail time back home; hell, do it fast enough and no trial at all! Also, a lot of propaganda and hate is being thrown at MN by MAGA - and fraud is especially ironic coming from the most corrupt federal government in history. Who purposely waged a war on us for the last month and fraudulently misrepresented just about everything they said! Even with clear video evidence worldwide. WTF would you believe anything they say again? 9 billion my ass!
As far as warnings of loopholes ripe for abuse, those were warned about in advance; but often those warnings are non-stop and never realistically addressable (sometimes these non-profit policing orgs are fronts for serious corruption.) The auditor's office uncovers and warns about many issues all the time; not many listen without force -- but the big part of their job is to find fraud and waste or at least create EVIDENCE TRAILS so all the crooks get caught (and they are!) If there is a scandal of fraud and waste, the system is working. If you are not hearing anything you should worry because evil fucks are constantly trying to rob the government.
I've been in the weeds on some past problems in MN, and the "cure" was a costly erection of BS adding even more opportunity for waste than the problem it was solving. Furthermore some big losses are like 20% while a fully private alternative comes with a 30% profit margin that is viewed as a good thing; 30% would send many involved to jail if inside government. Most the big problems are 3rd party "partnerships" and almost never are these thefts fully government run programs. The more contractors, the more risk and even when honestly done, the profit margins are a lot of overhead cost above internal cost. They will also operate at a good price for some years and then jack up prices and cut corners later ending up with the contract cost exceeding the net savings. A business scam can run over 10 year spans and politicians think short term. At least with government problems people get jailed, caught or throw out of office. With contractors, many get away and even when contracts are ended, they can re-incorporate or just bribe their way back in after a while. Their profits can throw a % back towards increasing or maintaining corruption! This public/private partnership BS is a con job for fools.