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This week, the appeals panel notified Youth Leadership Academy, also known as Gar Gaar Family Services of its decision and said the matter will be reassessed. Youth Leadership Academy will still need approval from the department to participate in the federally funded meals program.

"Gar Gaar is very hopeful that it will be able to continue to work with MDE on these programs," Barbara Berens, the nonprofit's attorney, said of the Education Department's reversal. "Gar Gaar believes there's still a need out in the community."

The Education Department said in a statement that it's currently reviewing the decision and determining next steps.

The Education Department has been under fire from state policymakers for its handling of federal meals programs, which are at the heart of an FBI investigation into alleged fraud in Minnesota.

Youth Leadership Academy has not been named in any unsealed documents related to that investigation.

Youth Leadership Academy and Gar Gaar Family Services launched in 2020 amid the COVID-19 pandemic to help provide meals to students in need, especially in the Somali community. "Gar gaar" means "help" in Somali.

The organization applied for and was approved to serve meals as part of the Summer Food Service Program, which is funded by the U.S. Department of Agriculture to help provide low-income kids with free meals when school is out. Youth Leadership Academy received more than $21 million in reimbursements for 7 million meals served in the summer.

The nonprofit then applied to participate in the Child and Adult Care Food Program, which reimburses organizations for providing meals during the school year. Both programs are managed in Minnesota by the Education Department.

In December, the department rejected the nonprofit's application, and an internal appeals panel upheld the decision in February. Youth Leadership Academy has since filed an appeal with the Minnesota Court of Appeals.

Separately, the Education Department issued a letter in March proposing to disqualify Youth Leadership Academy and six leaders from the Child and Adult Care Food Program. Youth Leadership Academy also appealed that decision, arguing that the Education Department found "new matters" and didn't give Youth Leadership Academy an opportunity to correct the new issues.

A hearing was held April 28 and the three-member internal appeals panel agreed this week the action was "procedurally premature and improper." .

Berens said the organization's leaders are now waiting to see what the Education Department does next and whether they'll be able to participate in these programs.

"Gar Gaar would like to be involved in serving these children ... in underserved communities," she said.

Youth Leadership Academy told the Education Department in its appeal that they now have an auditing firm, internal accountant, human resources director, payroll service director and accounting firm to make sure that the issues the Education Department noted — such as paying vendors who aren't licensed, using cashier's checks to pay bills and not paying payroll taxes — are remedied.

The nonprofit also told the department it has audits that will address the Education Department's remaining concerns.

A second reversal

The administration of federal meals programs has come under increased scrutiny this year. The Education Department terminated funding with St. Anthony nonprofit Feeding Our Future after it was the focus of FBI search warrants in January that alleged at least $48 million had been misappropriated from federal meals programs in Minnesota. Feeding Our Future's leader denies any wrongdoing.

The Education Department also suspended funding to Partners in Nutrition, a St. Paul nonprofit. But the department's appeals panel reversed its action against Partners in Nutrition this month, citing the same reasoning — that the St. Paul nonprofit didn't get proper notice and a chance to fix any perceived problems.

However, some state policymakers say the department didn't act quickly enough. State Sen. Roger Chamberlain, R-Lino Lakes, said the Education Department's latest reversals show the department doesn't have solid standards.

"There is some confusion on the part of MDE on what it is they're supposed to be doing and how they're supposed to be doing it," Chamberlain said. "They were confident in their own abilities. So what is it? ... 'We were great but we weren't.' "