Senate committee hears testimony on ‘significant deficiencies’ in DHS grant reviews

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The Minnesota Department of Human Services oversees tens of millions of dollars — including a huge influx of federal money — for homelessness and housing during the pandemic. An audit of the grant programs found that “The department had significant control deficiencies related to the management of homelessness and housing support grants.”

RELATED: Audit shows Minnesota Department of Human Services had lax oversight of $130M

“The objectives of this performance audit were first to determine if DHS complied with applicable legal criteria,” Deputy Minnesota Legislative Auditor Lori Leysen told the Senate Human Services Committee during a hearing on Tuesday. “We’re not saying there is fraud. We also cannot say fraud did not occur. What’s more concerning is that DHS cannot tell you this either. … Essentially DHS did not follow policies that would provide that assurance.”

The audit found DHS did no financial review of 91 of 117 grantees, each of whom received over $25,000. There was “insufficient documentation” for the other 26. The audit also found DHS did not perform required monitoring visits for 93 of 109 COVID-19 grant recipients over $50,000.

“We all just want to make sure that these funds are spent the way they should be and the way we intend,” Minnesota Legislative Auditor Judy Randall told the lawmakers.

RELATED: Legislative auditor calls Minnesota Department of Human Services pattern of lax oversight ‘concerning’

DHS Commissioner Jodi Harpstead acknowledged her department needs to do a better job of record keeping.

“There is nothing more important than a Department of Human Services to be trustworthy to the people of Minnesota,” she testified Tuesday. “We actually did perform the financial analysis that we needed to do for these grants before we sent them to anyone. We didn’t keep the documentation … and we need to keep documentation.”

Sen. Michelle Benson, R-Ham Lake, said grant recipients also need to do a better job of complying with legal requirements.

“It would be a good idea to send a message to grant recipients that they’re going to be partners in both accountability and service delivery, not just service delivery,” she told Harpstead.

The Office of the Legislative Auditor will issue another audit report Wednesday focused on the handling of grants by the Minnesota Department of Health during the pandemic.