A stunning new report from the Office of the Legislative Auditor (OLA) found that staff in the Minnesota Department of Human Services (DHS) backdated or created documents after the audit began in response to the OLA’s requests for information.
“I do want to talk about what a serious issue this is and how it is, frankly, unacceptable for the agencies we audit to do this type of activity,” Legislative Auditor Judy Randall told the Legislative Audit Commission during a Tuesday meeting.
“In the 27-plus years I’ve been with OLA, I have never seen this before. I will say we have had suspicions periodically, but we have never been able to prove it, to document it, and we did in this case. And it’s very troubling,” Randall said.
“I will add that it wasn’t just one individual that created the documents or backdated the documents. There were several [Behavioral Health Administration] staff that we could identify who had done this and it was across the grant oversight process. So we do believe it was a systemic effort.”
Temporary DHS Commissioner Shireen Gandhi addressed the issue in her remarks before the commission.
“I was shocked to hear this information in the exit conference and it is absolutely unacceptable that any staff would provide anything other than accurate representation of the work done to an auditor,” she said.
The agency is “swiftly and thoroughly” investigating the matter, Gandhi added.
The audit
The OLA’s performance audit focused on grant programs in DHS’ Behavioral Health Administration (BHA), which provides grants for the treatment of substance use disorders and mental health conditions.
Between July 1, 2022, and Dec. 31, 2024, BHA distributed more than $425 million in grants under 830 unique grant agreements, including 590 grants to nongovernmental organizations.
“The Behavioral Health Administration did not comply with most requirements we tested and did not have adequate internal controls over grant funds,” the audit found.
In one case, BHA paid $670,000 to a grantee for a single month of work, the grantee could not provide documents to support the payment, and then a state grant manager who approved the payment left to go work for the grantee.
“We asked BHA management whether they questioned such a large reimbursement request for just one month of work,” the report says. “BHA management said that due to limited information in the grant management system and the grant manager no longer being available, they could not answer this question.”
The audit also found that BHA “could not demonstrate that it conducted 27 out of 67 required monitoring visits.”
“For 24 monitoring visits to 11 grantees, BHA could not provide any documentation to show that it completed the visits,” the report explains.
For three monitoring visits to one grantee, BHA did provide documentation to show it completed the visits.
However, “the grant manager created the documentation in February 2025, which was after we started our audit and after visits supposedly occurred in May 2024, October 2024, and January 2025.”
“The grant manager explained that they conducted monitoring visits on time, but they did not document it. The grant manager could not provide any notes, email communication, or calendar schedules to show that these monitoring visits occurred,” the report states.
Reactions
Sen. Mark Koran, R-North Branch, sits on the Legislative Audit Commission and said the report “shows a complete breakdown in how DHS’s Behavioral Health Administration manages hundreds of millions in taxpayer-funded grants.”
“BHA failed to verify that grantees were providing the services they were paid for, failed to put basic financial controls in place, and then created documentation after the fact to mislead auditors,” he said. “Minnesotans deserve integrity from state agencies. Fabricating evidence after an audit begins is unacceptable.”
Minnesota House Speaker Lisa Demuth, R-Cold Spring, slammed DHS for “a culture of pervasive fraud, negligence, and deception.”
“This proves once again that those running our programs expect no repercussions or accountability from Governor Walz or the Democrats in power, even when they fabricate documents and ignore basic procedures,” she said. “It’s time to clean house and restore honesty and accountability in state agencies.”
Anthony Gockowski
Anthony Gockowski is Editor-in-Chief of Alpha News. He previously worked as an editor for The Minnesota Sun and Campus Reform, and wrote for the Daily Caller.
