ST. PAUL — Minnesota’s chief financial officer says nobody at the Department of Human Services should be fired or prosecuted over violations of state contract laws, because no money was actually misspent and the violations themselves often boiled down to procedural errors.
Minnesota Management and Budget Commissioner Myron Frans said the 200-plus violation reports that DHS has logged this year among contracts totaling nearly $52 million are “technical issues that do not rise to the level of fraud or abuse.”
“We don’t believe so because our goal is to make sure that only payments are made on contracts that have been fully executed, and our system is designed to alert us that there is something missing in the process and no money should go out until that has been corrected,” Frans said in an interview Friday, Nov. 8.
The system that Frans referred to is the violation forms that DHS employees filled out in cases when vendors or grantees started work before contracts were signed, or when employees committed to spend money on products and services without permission. Both cases are technically violations of state law, though the latter can be deemed valid if the expenses are later justified as legitimate by the agency head — which is what happened in about 150 of the 205 violations.
Most violations occurred because of bureaucratic confusion, according to a Pioneer Press case-by-case review of all the violations. Paperwork was lost, deadlines were missed, employees did not understand procedures, and the agency did not communicate with vendors in a timely manner.
Though in some cases, DHS knowingly committed violations to keep services like emergency homeless shelters from shutting down.
Through it all, no money went out the door until the contracts were eventually signed off on and finalized, the records show. DHS officials admit they need to clean up their internal process and do a better job of following their procedures.
“I think the statute was written in a way to affirm the importance of maintaining fiscal control over moneys appropriated — and I completely agree with that philosophy,” Frans said. “The fact that the statute states that payments made in violation of the statute are illegal is significant and is the primary objective of what we do to make sure that doesn’t happen. Other violations that occurred we take seriously and we try to manage those so that we solve these technical problems.”
Frans’ position stands in contrast to that of some Republican state lawmakers, who immediately scheduled a hearing after a news report about the violations and suggested Gov. Tim Walz should consider firing DHS employees responsible for the violations. Republicans decried the DHS violations as the latest example of mismanagement by the sprawling $18 billion agency, which has also come under fire recently for mishandling nearly $80 million in federal Medicaid funds.
In announcing the hearings earlier this week, state Sen. Julie Rosen, R-Vernon Center, referred to the violation forms as “get out of jail free” forms.
Asked to respond to Frans’ position Friday, Rosen said: “I would be interested in hearing what the commissioner would feel appropriate for people who blatantly break the law. … There should be consequences.”
The Senate finance committee will discuss the violations on Wednesday.