The Term “deep state,” referring to the federal bureaucracy, has gained usage in recent years, but “deep state” is not exclusive to the feds. In recent weeks, it has become apparent that the state of Minnesota has one as well.
The issues first gained traction in a news report a year and a half ago. It was alleged that fraud was rampant in the Child Care Assistance Program (CCAP). At first, this was downplayed with the argument that only $5 million had been proven in court, but one of the fraud investigators estimated that at least $100 million had been paid on fraudulent claims. This spring, the Office of Legislative Auditor issued a report, agreeing that it could prove only the $5 million, but that the opportunity for fraud was way too large.
It turns out the CCAP program was only the tip of the iceberg. In July, it came out that the agency had overpaid two Native American tribes $29 million. DHS had used the wrong rate, paying the tribes $455, the rate used when an anti-addiction drug is administered by a health care professional in an office setting, when it should have used a lower rate when the patient self-administered the drug at home. DHS is implementing the program for the feds, who now want back the difference between the two rates. No one is reviewing whether paying one rate for an injection in an office should be much higher than for one administered at home. One would think the Minnesota congressional delegation would be all over that issue, but not a peep has been heard.
Governor Tim Walz’ first choice for DHS commissioner, former state Sen. Tony Lourey, resigned after only six months. In early September, new DHS Commissioner Jodi Harpstead replaced him. One of the first things she said was that she would restore trust in the agency in 90 days.
That’s a noble aim, but the reality is that it will take years. Since Harpstead took office, the hits have just kept coming. To her credit, she appears to be trying to be more transparent than her predecessors, not covering up the errors.
In November, it was reported that overpayments to chemical dependency treatment providers had ballooned from $48 million to $61 million. Plus, Minnesota counties are being asked to pay back $8.8 million. You may want to ask your county commissioner how much your increase in property taxes is due to the DHS claw back.
Next came the news that DHS was advising counties to claw back improper payments to recipients on its cash assistance program – those people who don’t have two nickels to rub together in the first place. This effort violates a law passed in 2016. Now they have to refund $727,000.
And to top it all off, DHS admitted violating state law 219 times. Given the rest of the failures, perhaps that should not be surprising, except DHS isn’t the only agency. Altogether, state agencies have violated the law at least 1,800 times in the past year.
Minnesota’s Deep State immediately went on the defensive, explaining that most of the violations occurred when vendors started work before contracts were signed or when employees spent money on products or services without proper approval.
So, it’s OK if government breaks the law, but not the average citizen?
In late October, DHS reported that the Office of Inspector General, which is charged with ferreting out fraud in CCAP and other programs, had been revamped. On Monday, in a review of her first 90 days, Harpstead told a legislative committee that Carolyn Ham, who was paid $42,000 to sit home after being removed as head of the Office of Inspector General, had been reassigned within DHS, but had done nothing wrong.
Harpstead also said of the 7,300 DHS employees, more than 7,200 are doing good work.
In September, I wrote that when all is said and done, DHS misappropriations would top at least $100 million. Harpstead’s own amount totaled $106.5 million – and doesn’t include CCAP.
Harpstead told the committee that she has put in place new payment controls, requiring three points of sign-off before any funds are moved.
However, she did not sound like someone who is changing a sloppy culture. She said that the $106.5 million misspent in the past six years amounted to only 0.1% of all DHS expenditures. She did say that “every dime matters,” but why make the mistakes sound like a small issue? That $106.5 million could help reduce the size of the next bonding bill, increase the number of scholarships for low-income preschool, or make a few more miles of highway safer or less congested. To outsiders, it still looks like real money.
She also tried to put some of the blame on the administrations of Govs. Jesse Ventura and Tim Pawlenty, saying some of the bad policies go back 10 to 20 years. However, Gov. Dayton had eight years and now Gov. Walz has had almost a year to straighten out the mess. If it gets fixed under Walz, great, but the problem is bigger than DHS. Minnesota’s Deep State has a long way to go before the public will trust that they are getting good value for every tax dollar spent.
Tom West, now retired, is the former general manager of this paper. Reach him at firstname.lastname@example.org.