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Audit: Problems at Minn. Dept. of Human Services Continue

Updated: 03/05/2014 4:03 PM
Created: 07/11/2013 7:16 PM KSTP.com
By: Stephen Tellier

Potential for fraud, waste, and abuse. The state short-changing itself millions of dollars. And a lack of oversight that's been going on for years.

A scathing audit released Thursday, July 11, finds systemic problems at the Minnesota Department of Human Services (DHS) that still haven't been fixed -- more than two years after a 5 EYEWITNESS NEWS investigation brought them to light.

DHS oversees about $9 billion in total Medicaid spending and another $1.4 billion in federal funds for welfare, child care assistance, as well as several other programs. Auditors say the state simply isn't doing a good enough job keeping track of that taxpayer money.

And this is far from the first time they've come down hard on DHS.

"I believe that errors, abuse and fraud exist in this program," said Cecile Ferkul, deputy legislative auditor with the Office of the Legislative Auditor, during our investigation in 2011.

More than two years later, Ferkul said little has changed.

"It can be frustrating that they're not getting resolved," Ferkul said Thursday.

She oversaw the audit, which reads like a bureaucratic broken record.

Auditors found DHS is not making sure Minnesotans who receive welfare and child care assistance are eligible for those benefits - and that fraud can still go undetected.

Auditors also say DHS has "significant, ongoing noncompliance" with federal requirements - a problem first identified in 2009 and now cited in five consecutive audits.

"When the state has a program that's spending $9 billion, they have a responsibility to make sure it's going to the right people," Ferkul said.

DHS has admitted to the problems found. The department has promised to fix them after each audit, but hasn't.

The department told us no one was available for an on-camera interview, but responded with a statement from Deputy Commissioner Charles Johnson:

"The auditor's report found we are largely in compliance with all requirements related to the federally-funded programs we administer. We agree with the audit's conclusions about the areas that need improvement and are moving forward to ensure these issues are resolved. We are committed to running these programs in the most cost-effective way possible to best serve the people of Minnesota."

Auditors say the department's broken record is full of broken promises.

"They have now estimated that they'll be able to resolve that finding by December of 2015 -- still two and a 1/2 years out," Ferkul said.

The audit also found that the state failed to request $139 million in Medicaid payments from the federal government. That money has since been recouped.

Despite the audit echoing previous problems, DHS has not been hit with sanctions by the federal government. But auditors say that is a possibility.

Click here to read more 5 EYEWITNESS NEWS investigation stories about Welfare Waste.


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