The Minnesota Department of Human Services (DHS) has fired Eric Grumdahl, an assistant commissioner who oversaw the agency’s housing services. The assistant commissioner had worked for DHS since 2022 and previously was employed by the Obama administration.
Grumdahl was fired on Tuesday, the day before DHS was slated to appear before the Fraud Prevention Committee in the Minnesota House of Representatives and discuss the Housing Stabilization Services (HSS) program.
HSS is a housing assistance program funded by Medicaid but operated by DHS. Last month, DHS leaders said they are shutting down HSS due to widespread fraud within the program.
Rep. Kristin Robbins, the chair of the Fraud Prevention Committee, said she was alerted to Grumdahl’s firing on Wednesday morning; just hours before DHS was scheduled to discuss the HSS program. In a statement, Robbins slammed the decision.
“This is yet another example of DHS and the Walz Administration dodging accountability for their failures,” said Robbins. “I would have expected Assistant Commissioner Grumdahl to attend the hearing and answer questions today, but DHS never intended for him to come.”
“While I’m glad to see they are finally starting to hold individuals running these programs accountable for fraud, doing it the day before the public hearing just shows how DHS tries to hide what is going on from legislators and the public,” added the Republican lawmaker.
At the Wednesday hearing, Acting DHS Commissioner Shireen Gandhi was asked why the assistant commissioner was fired before the hearing. Gandhi told lawmakers that the state legislature has “put parameters around personnel data” and said only that Tuesday was Grumdahl’s last day of employment. No further details were provided.
In a statement, DHS told Alpha News that “the reason for an employee’s separation is not public” under the state’s data practices law. Additionally, the department said Grumdahl was “not scheduled to present” at Wednesday’s Fraud Prevention Committee meeting.
Republicans say Walz administration not doing enough to stop fraud
On Wednesday, Gandhi and DHS Inspector General James Clark told members of the Fraud Committee that DHS has no tolerance for fraud, and Gandhi said the agency has taken steps to prevent criminals from gaming the system. Despite those efforts, Gandhi said fraud has become more sophisticated and DHS’ tools to stop fraud are antiquated.
Clark told legislators that he is seeing fraud schemes that involve entire businesses, appear to be using AI-generated records, and have “tentacles throughout the Medicaid program.”
Regarding the HSS program, Clark said he has seen businesses that overbilled or billed for services that are not eligible for reimbursement, businesses that lacked documentation to confirm that services were provided, and businesses that billed Medicaid for services when the recipient of those services had not heard of the business.
The inspector general said his office has 120 open HSS investigations, payments have been suspended to 115 providers, and law enforcement has been notified. Gandhi noted that the HSS program could be fully shut down as soon as Oct. 20. Additionally, Clark said DHS needs updated tools from the legislature to combat fraud.
Earlier in the day, Gov. Tim Walz issued an executive order on fraud. Among other things, the order allows Minnesota to disenroll inactive Medicaid providers, request funds from available accounts to modernize fraud prevention systems, and establish a council of inspectors general from various state agencies to coordinate on fraud prevention.
Democrats called the executive order a step in the right direction, while Republicans said the action will not effectively address the state’s pervasive fraud problem.
“Periodic meetings between several different agencies are better than the current status quo, but given the sheer magnitude of the fraud we are facing in Minnesota, we need a fully independent statewide Office of Inspector General written into law that will work daily to prevent fraud,” said Sen. Michael Kreun, a Republican.
Robbins also called for the creation of a statewide Office of the Inspector General (OIG), noting that an effort to establish such an office was defeated earlier this year.
“Governor Walz, DHS, and House Democrats blocked this commonsense OIG bill in the House after it passed the Democrat-controlled Senate with strong bipartisan support by a vote of 60-7,” said Robbins. “Decades of reports about the failures of internal controls at DHS have demonstrated they cannot police themselves.”
“We need an independent executive branch OIG to hold them accountable,” added Robbins.
Alpha News contacted the Walz Administration for this story but did not hear back.
Luke Sprinkel
Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
