Top Human Services investigator on leave after report's findings

Legislative Auditor James Nobles and Legal Counsel Elizabeth Stawicki
Minnesota Legislative Auditor James Nobles and Legal Counsel Elizabeth Stawicki testify before a Minnesota Senate committee in St. Paul on Wednesday.
Matt Sepic | MPR News file

The inspector general of the Minnesota Department of Human Services is off the job Monday on investigative leave following a Minnesota legislative auditor's report last week.

The report found a "serious rift" between Inspector General Carolyn Ham and investigators looking at fraud in the state Child Care Assistance Program.

In an interview with MPR News, Ham took issue with the report, saying she is being treated as a scapegoat for problems in the department.

The Office of the Legislative Auditor confirmed there is fraud in the $250 million child care program, but was unable to precisely pin down how much, concluding only that it was more than the $6 million the state has been able to recover from criminal prosecutions.

The audit did not validate claims that the fraud approached $100 million or that some money was flowing to overseas terrorist groups.

Reached by phone, Ham said agency higher-ups told her recently she was being placed on leave with pay in response to the audit.

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When asked her reaction, Ham said, "I told them I disagree."

She went on to say that she's being made "a scapegoat" in what has become a charged political fight.

Ham hasn't been told how long the probe will take. But she also said the audit has left the wrong impression about her management, particularly the way she dealt with a couple of investigators alleging 50 percent fraud by providers in the day care program.

"The reason there was distrust between me and the fraud unit is because I was pushing them on their unsubstantiated beliefs," Ham said.

The legislative auditor recommended that the fraud investigation unit be given more independence from the agency that controls the child care spending.

Rep. Nick Zerwas, R-Elk River, was among the legislators who sought Ham's ouster.

"But at the end of the day, one person being removed doesn't fix this. There's a lot of work left to do," he said. "The governor and the commissioner have their work cut out for them in replacing her with someone who is interested in finding fraud."

Asked about Ham's suspension, Gov. Tim Walz was guarded in his reaction.

"We take this incredibly seriously," Walz said. "We are doing our own internal investigations and our goal is to bring accountability to the system and move forward. And at this time that's about all I can say."

MPR News reporter Briana Bierschbach contributed to this story.