Minnesota DHS Commissioner Says Agency Isn’t ‘In Crisis’ During House Hearing

Minnesota Department of Human Services (DHS) Commissioner Jodi Harpstead presented her “90-day report” to state lawmakers Monday morning, but the two-hour hearing before the House Health and Human Services Committee may have produced more questions than answers.

Harpstead was given the floor to discuss her first 90 days leading the state’s largest agency, which has racked up $106.5 million in inappropriate payments over the last six years.

Her report (which can be accessed here) made clear attempts to frame DHS in a more positive light and pushed back on claims that the department is “in a free fall.”

Harpstead pointed out that the $106.5 million in improper payments discovered in 2019 amount to just 0.1 percent of the $96.1 billion the department issued over the same time period. She also said that most of the “payment issues we are addressing now did not happen in 2019.”

“They went viral in 2019. And we’ve put stop gaps in place in 2019,” states her report. The document reveals that DHS has to repay the federal government a total of $103.3 million for the $106.5 million in errors.

Rep. Nick Zerwas (R-Elk River) took issue with Harpstead’s attempts to minimize the improper payments, particularly the $29 million in overpayments issued to two Native American tribes for chemical dependency treatment services. Those tribes, the Leech Lake Band of Ojibwe and the White Earth Nation, are now expected to reimburse the state.

“They don’t have the money. They don’t have the money, and they have no reasonable expectation that they will ever have the money,” said Zerwas, noting that the $29 million may be a “blip” on the agency’s budget, but represent a substantial burden for the tribes, which are among the poorest in the state.

Harpstead said nobody has been disciplined for the $29 million error.

Harpstead’s report acknowledges that her agency’s “process controls” are “soft around the edges.” Data recently released by Minnesota Management and Budget showed that 1,300 contract and procurement violations occurred across state agencies in the past year alone.

“We need to sharpen soft interdepartmental process controls to be sure service payment decisions are signed and documented by the right people,” says the report.

Other highlights from Monday’s hearing include:

1. Carolyn Ham Investigation Has Concluded

Nearly two hours into the hearing, Commissioner Harpstead said the investigation into former DHS Inspector General Carolyn Ham has concluded and resulted in no disciplinary action.

“The complaints against Carolyn Ham were recently closed and resulted in no disciplinary action. Carolyn remains on leave from the Inspector General’s Office, and is assigned to the DHS general counsel’s office,” said Harpstead.

Ham was placed on “investigative leave” in March after a report from the Office of the Legislative Auditor confirmed that millions of dollars in government payments went to fraudulent child care centers. As of July, Ham had been paid $42,000 during her leave and the investigation into her conduct had yet to even begin.

Republican lawmakers said during a press conference following Monday’s hearing that the way the news was revealed proves there is “no accountability” at DHS.

2. No More Retaliation Against Whistleblowers

Harpstead said she intends to create “a culture” in DHS where employees feel comfortable coming forward with complaints.

“We will not suppress or retaliate against anyone inside DHS who comes forward pointing to problems,” said Harpstead.

This comes after Faye Bernstein, a compliance officer at DHS, said she continues to be retaliated against for blowing the whistle on “substandard and noncompliant” state contracts.

“It is embarrassing and painful to have my work discredited and my character questioned,” Bernstein said during a recent interview. “My co-workers who see this treatment are understandably unwilling to point out compliance issues or even voice a contrary opinion at risk of getting the same or worse response.”

3. Gov. Tim Walz to Make ‘Announcement’ on Breaking Up DHS

Harpstead said Gov. Walz plans to address calls to break up the state agency in the coming days.

“The Governor and I have been talking throughout my first 90 days about how the Department should be structured and whether restructuring the Department would improve efficiency, accountability, and delivery of services,” said Harpstead. “The Governor will be making an announcement in the coming days on this matter.”

Republican lawmakers have been highly critical of Walz throughout the DHS saga, saying he doesn’t seem interested in the issue and has failed to hold anyone accountable.

4. Conversation on Terror Links Shut Down

At one point during Monday’s hearing, Rep. Mohamud Noor (DFL-Minneapolis) said he is “disgusted by some of the conversations about terrorism, Taliban, and all those things.”

“Those have been debunked. Those are not true. The hate, the fear, the Islamophobia that exists needs to stop now and forever. We can no longer continue to have those types of conversations in this House. Period. I think people need to provide facts instead of attacking other communities when they are mentioned,” he continued. “That’s unreal. I will no longer take those statements without any facts produced by those individuals who make those statements.”

His comments come after an email obtained by Rep. Mary Franson (R-Alexandria) showed that DHS officials apparently considered mailing a check to a child care center that had its account frozen by the Office of Foreign Asset Control.

“It appears the owner of the child care center is associated with a Taliban official, which is why the account was ordered frozen,” the email states, as The Minnesota Sun previously reported.

Franson attempted to discuss some of the discoveries she made through her data practices request during Monday’s hearing. She said the emails show that “DHS officials were warned that public program dollars may be leaving the US and getting in the hands of dangerous people.”

Rep. Tina Liebling (DFL-Rochester), chair of the committee, then interrupted Franson, telling her to “please wrap it up” because “we don’t have time for a speech.”

“I’m sorry, but is there a question because we have other members. Please ask your question,” said Liebling.

Monday’s full hearing can be watched below:

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Anthony Gockowski is managing editor of Battleground State News, The Ohio Star, and The Minnesota Sun. Follow Anthony on Twitter. Email tips to [email protected].