State rep says Walz admin ‘failed to protect taxpayer dollars’ after release of audit

Rep. Ann Neu-Brindley said Minnesotans "expect DHS to be a better steward of their taxpayer dollars and once again the department fell short." 

The Minnesota State Capitol building in St. Paul. (Minnesota Department of Administration/Flickr)

The Minnesota Department of Human Services said it prioritized people over processes during the COVID-19 pandemic when explaining its poor oversight of grant money.

An audit by the Office of the Legislative Auditor (OLA) found that DHS poorly managed  grant dollars and disregarded the law in its distribution and tracking of homelessness and housing support grants, including COVID-19 response emergency services grants.

It was “simply not possible” to follow all policies and procedures during the pandemic given the urgent timeframe, Jodi Harpstead, Department of Human Services commissioner, said during a legislative hearing last week.

“During the very first days of the COVID-19 pandemic, DHS received a sudden influx of state and federal funding to get Minnesotans experiencing homelessness into safe shelter spaces,” Harpstead said in response to the audit. “Our staff made some deliberate choices that prioritized getting resources out to our partners that would save lives, protect communities, and preserve our health care system’s capacity.”

However, Judy Randall, legislative auditor, told Alpha News the state can take care of people while following procedures, and DHS should have taken steps to ensure taxpayer money was being spent properly.

“COVID was extraordinary but that didn’t mean we should ignore policies or not meet taxpayer expectations,” Randall told Alpha News. “There are other thoughtful ways and reasonable approaches to make sure the money was spent properly.”

Randall said there was no evidence of fraud but determining fraud was not within the scope of the audit.

Because DHS did not follow policies and procedures, there’s no way to determine if grantees spent money on allowable activities or if fraud occurred, said Lori Leyson, who leads the OLA’s Financial Audit Division, before the Legislative Audit Commission last week.

DHS created new processes out of necessity because of the unique nature of the grants and the urgency in which they needed to be disbursed, Harpstead said during the hearing.

In a letter responding to the audit, Harpstead said her agency “prioritized rapid, nimble processes over established processes that would provide documentation of our decision-making, but would have impeded our speed or capacity to respond as it was simply not possible to do it all given the urgent timeframe.”

“To look at this expedited process to get funds out in an emergency and conclude that DHS  is in trouble is grossly unfair to the caring and competent people of the Department of Human Services,” Harpstead said.

Some state lawmakers disagreed, pointing to past problems within the agency.

“Waste, fraud, and abuse have plagued DHS programs for years, and once again an audit has found that the Walz administration failed to protect taxpayer dollars,” said Rep. Ann Neu-Brindley, R-North Branch. “During the pandemic, DHS oversaw hundreds of millions of COVID relief dollars but they did not effectively manage grant distribution or comply with all legal requirements.” 

Harpstead said the department oversees $20 billion a year and “handles it well.”

“The Department of Human Services generally did not have adequate internal controls to ensure compliance with applicable legal requirements over homelessness and housing support grants. The department had significant control deficiencies related to the management of homelessness and housing support grants. Further, the department did not always comply with the significant legal requirements related to grants management,” the audit concludes.

Neu-Brindley said Minnesotans “expect DHS to be a better steward of their taxpayer dollars and once again the department fell short.”


Sheila Qualls

Sheila Qualls is an award-winning journalist and former civilian editor of an Army newspaper. Prior to joining Alpha News, she was a Christian Marriage and Family columnist at and a personal coach. Her work has been published in The Upper Room, the MOPS blog, Grown and Flown, and The Christian Post. She speaks nationally on issues involving faith and family.