Report: Records show DHS violated state contract law

The Minnesota Department of Human Services
The Minnesota Department of Human Services building on Lafayette Road in St. Paul, photographed on Wednesday, Sept. 4, 2019.
Jiwon Choi | MPR News

Documents show that within the past year, the Minnesota Department of Human Services broke state law more than 200 times, the Star Tribune reports. The newspaper’s review found that DHS allowed $52 million in contracts and grant commitments to vendors, Native tribes and other state government agencies without proper documentation.

In some cases, agency employees allowed vendors and grantees to perform work or services as if they were being paid by the state, even though contracts and agreements had not been finalized and signed. In other cases, employees bought products, such as software, without required permission.

According to the Star Tribune, the DHS said it has tools to prevent these types of scenarios, but lawmakers warn these violations create a tough situation for the agency where misuse of taxpayer dollars is a huge risk, while also making it harder to negotiate with vendors.

The story details some of the internal concerns that were raised:

“We broke the law,” DHS Chief Financial Officer Alexandra Kotze wrote in an April e-mail, responding to one internal report that detailed more than $300,000 in violations. “We need to be able to explain internally and to the [Department of Administration] how we will prevent this in the future.”

The story comes on the heels of a scathing report from the Office of the Legislative Auditor. MPR’s Briana Bierschbach recently reported on the audit’s findings:

“Troubling dysfunction” at the Minnesota Department of Human Services led to $29 million in overpayments of federal funds to two tribes over the last decade for opioid abuse treatments covered by Medicaid, a new audit shows.

Meanwhile, Rep. Nick Zerwas, R-Elk River, told the Star Tribune that an independent forensic audit of all programs at DHS is needed in light of the violations.

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