Top Financial Officer Says Illegal Contract Practices at DHS ‘Don’t Rise to Level of Fraud or Abuse’

Minnesota’s top financial officer doesn’t think anyone at the Department of Human Services should be fired as a result of the agency’s repeated violations of contract laws.

In fact, Minnesota Management and Budget Commissioner Myron Frans blamed the problem on “technical issues” that “do not rise to the level of fraud or abuse” when speaking with the Pioneer Press.

A recent review of internal DHS documents found that the agency “violated state law more than 200 times over the past year with $52 million in contracts and grant commitments to vendors, Indian bands and other state government agencies without proper documentation.”

As The Minnesota Sun reported, DHS employees would allow vendors to perform work that would be compensated by the state even if contracts had not been finalized or signed off on. Some officials defended the violations by arguing that vital state services could have been shut down had the violations not been committed.

“We don’t believe so because our goal is to make sure that only payments are made on contracts that have been fully executed, and our system is designed to alert us that there is something missing in the process and no money should go out until that has been corrected,” Frans told the Pioneer Press in regards to whether anyone should be fired.

He said no money actually left DHS until the contracts were finalized, but Republican lawmakers think it’s time to clean house.

“If the agency is unwilling to hold employees accountable, then it may be time for law enforcement to step in,” said State Rep. Nick Zerwas (R-Elk River). “Failing to fire those responsible sends a message that the status quo is acceptable, and that there are no meaningful consequences for violating public trust, misusing taxpayer dollars, and breaking state law.”

State Rep. Steve Drazkowski (R-Mazeppa) said on Facebook Tuesday that if “it’s not fraud or abuse,” then “it’s ineptness and corruption.”

“You can’t have it both ways. Time for a huge house cleaning,” he added.

Senate Republicans scheduled a hearing for Wednesday to discuss the agency’s use of “illegal contract and spending practices.”

“This agency is the fastest growing part of our budget,”said State Sen. Julie Rosen (R-Vernon Center), chair of the Senate Finance Committee, which will hold Wednesday’s hearing. “We’ve heard about the fraud in childcare assistance, we’ve seen the waste in overpayments to the tribes, and now we have abuse by agency staff spending money without approval and filing a ‘get out of jail free’ form each time.”

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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].
Photo “Minnesota Capitol” by McGhiever. CC BY-SA 4.0.