(NewsNation) — Several staff members within the Minnesota Department of Human Services’ Behavioral Health Administration altered records during a recent audit, according to the state’s legislative auditor.
The nonpartisan state watchdog identified a “number of documents” that staff either backdated or created after the audit began — a practice Legislative Auditor Judy Randall described as a “systemic effort.”
“It is frankly unacceptable for the agencies we audit to do this type of activity,” Randall said during a hearing Tuesday. “In the 27-plus years I’ve been with the Office of the Legislative Auditor, I have never seen this before.”
Randall said the documents were backdated or created in response to auditors’ requests for information, undermining the integrity of the audit’s findings.
Those findings, outlined in a 70-page report released this week, point to widespread problems with the state’s oversight of taxpayer-funded behavioral health grants.
The audit found that DHS distributed more than $425 million in grants to 830 grantees between July 1, 2022, and Dec. 31, 2024, but failed to adequately monitor those funds.
Auditors identified issues with progress reports for more than half of the 51 grant agreements for which there should have been at least one report. The Behavioral Health Administration paid $2.1 million to seven grantees who never submitted a report and $11.2 million to others with past due reports.
“Without obtaining and reviewing progress reports, BHA is paying grantees without knowing whether grantees are providing agreed-upon services,” the audit said.
Auditors also found that behavioral health staff couldn’t prove that they performed more than two dozen required monitoring visits.
In one instance, auditors found that a grant manager approved a $672,000 payment for a single month of work, then left the agency days later and subsequently provided consulting services to the same grantee.
“The OLA report shows a complete breakdown in how DHS’s Behavioral Health Administration manages hundreds of millions in taxpayer-funded grants,” Republican state Sen. Mark Koran said in a news release.
The audit comes amid heightened scrutinty of Minnesota’s publicly funded programs following recent fraud allegations tied child care centers around the Twin Cities. The Trump adminsitration has launched a federal investigation and Democratic Gov. Tim Walz has said he will not seek reelection.
Temporary DHS Commissioner Shireen Gandhi said she was “shocked” to learn about the document alterations described in the audit and called the conduct “absolutely unacceptable” during this week’s hearing.
“DHS is swiftly and thoroughly investigating the concerns raised,” Gandhi said.