The Minnesota Legislative Auditor's office will broadly review the state Department of Health's administration of grants, after health officials may have allowed thousands of dollars to be inappropriately used by one nonprofit over the last two years.
The possible misuse of funds was detailed in a report released Thursday by the auditor's office.
The case concerns grants to a St. Paul nonprofit called the Sierra Young Family Institute, Inc. The department of health paid the Sierra Young Family Institute $328,993 in state and federal funds beginning in July 2010 and ending June 30, 2012 to work on reducing health disparities in the black community.
This summer, health department staff noticed inconsistencies in the Sierra Young Family Institute's reporting, and asked the Legislative Auditor to investigate.
"This was a very unique situation. It doesn't mean that it couldn't have been avoided if we would've had better training and better oversight and that's what we're shooting for."
The resulting report found that the executive director of the Sierra Institute had used grant money to pay family members more than $100,000.
Investigators found the Sierra Institute's executive director could not fully explain payments to high-end retailers and checks made out to herself.
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The report says the executive director fabricated documents to conceal her use of grant money for personal expenses. Investigators said they could not find anyone who had benefited from the Sierra Young Family Institute's programs.
The executive director was not identified in the report. But Legislative Auditor Jim Nobles confirmed the Sierra Young Family Institute's executive director at the time was Roberta Barnes. Barnes is also listed as executive director of the St. Paul nonprofit Agape House For Mothers, which has received state grants. MPR News could not find contact information for Barnes. The Sierra Young Family Institute's phone number has been disconnected and a number listed for Agape doesn't work.
Nobles said the Department of Health did not adequately monitor the institute and missed opportunities to call the nonprofit's finances into question.
"I think that as much as the department failed to monitor the way the money was being spent, they really failed to have any mechanism of determining whether or not we were accomplishing the purpose of the grant and the program," Nobles said. "So they need to do a better job in that area."
Nobles said his office plans to look closely at the health department's administration of grants. But Minnesota Health Department deputy commissioner Jim Koppel said his department has already strengthened its oversight policies and improved its staff training.
"This was a very unique situation. It doesn't mean that it couldn't have been avoided if we would've had better training and better oversight and that's what we're shooting for," Koppel said.
The Legislative Auditor's Office has referred the Sierra Young Family Institute case to the Minnesota Attorney General and federal officials to see if funds can be retrieved.