A new report released Monday on Minnesota’s fraud crisis describes how the state Department of Human Services (DHS) “emphasized compassion over compliance” when administering programs.
It also raises allegations that some state “employees were instructed not to pursue suspicious activity and that other employee fraud prevention efforts may have been impeded.”
The report, titled “Roadmap to Program Integrity and Fraud Prevention,” was published by Director of Program Integrity Tim O’Malley, who was appointed to that role in December by Gov. Tim Walz amid widespread fraud in state government.
“The review undertaken to identify contributing causes of fraud shows that, going back at least to the 1970s, every administration and legislative body was put on notice of vulnerabilities in program integrity. Stronger preventative measures should have been taken,” O’Malley wrote in a letter to Gov. Walz and legislative leaders that accompanied the report.
“Repeatedly, plans were put in place but not executed effectively. Criminals have exploited those longstanding vulnerabilities to defraud our state, erode public trust and impede the delivery of essential services to Minnesotans in need,” he said.
The report includes dozens of recommendations for preventing fraud and was based on a review of documents, interviews with current and former state employees, and meetings with whistleblowers and service providers.
In some of these interviews, several current and former DHS employees “described past messaging from DHS leadership that emphasized compassion over compliance,” according to the report.
“Former leaders have said that DHS should be guided by 70% compassion and 30% compliance. In a 2023 DHS public presentation, leadership encouraged employees to embrace a 60/40 mindset. This is misguided,” the report says.
Another section of the report explains how the review “identified allegations that employees were instructed not to pursue suspicious activity and that other employee fraud prevention efforts may have been impeded.”
“Each such instance must be independently investigated to determine what occurred and whether corrective or disciplinary action is warranted, including referral for criminal investigation and prosecution as warranted,” the report says.
An appendix to this section says “past and current employees were interviewed regarding concerns that front-line state employees were instructed to not pursue suspicious activity or not report it to others with authority to act.”
“These cases included allegations that: Employees failed to perform required duties; Employees violated directives or written policies; Supervisors failed to take employees’ allegations seriously; Supervisors accused employees of racism; Supervisors failed to elevate concerns to the proper organizational level; Supervisors engaged in retaliation,” the report says.
According to the report, “a past situation was reviewed and it was determined the allegations were investigated and resolved.”
However, “the lingering concern is that there may be past allegations of misconduct not yet addressed and other allegations may still be brought forward.”
“Current leadership has emphasized the importance of fairness in the workplace and encouraged employees to report allegations of misconduct,” the report notes.
O’Malley held a press conference to discuss his review and was asked why he thinks fraud was allowed to spiral out of control.
“If a number of people would have taken the steps earlier, the vulnerabilities wouldn’t be there today,” he said. “There will be a need for a cultural shift within the state, within 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.
