In a normal government-funded welfare operation, 50%+ of the money goes to expenses for the administrators, and less than 50% goes to actual benefits for the recipients. That is still fraud, but it's not flagrantly obvious. Money is being skimmed off the top, but some people are getting fed, housed, or whatever the charity is supposed to do. The people running the charity make $100k-$200k+ per year, but that's seen as "normal".

What they're doing in Minnesota is 100% fraud. Instead of spending a token amount of money on benefits, they're stealing 100% of the money. The government regulators have zero incentive to do anything, because it would cause all the Somalis in Minnesota to riot if they tried. It's also taxpayer money being spent, not the government bureaucrat's own personal money, so there's no reason to go hardline for accountability.

Both types of welfare charities are frauds. One is way more flagrant than the other.