Jodi Harpstead took over as commissioner of the Department of Human Services in September.
Since her arrival, most news about the department has been negative: more than $100 million in overpayments or refunds; breaking state procurement law more than 200 times, including letting vendors and grantees begin work before a contract was signed; employees spending money on products and/or services without prior approval, although there’s been no evidence money was misspent; allegations of whistleblower retaliation; and the recently closed investigation into former Inspector General Carolyn Ham.
Ham, placed on paid administrative leave for many months, was not disciplined and has been reassigned to the general counsel’s office.
Nearly three months into her new role, Harpstead appeared before the House Health and Human Services Finance Division Monday to provide her 90-day plan to make the hefty department run, as she said, like a Swiss watch. No action was taken.
It was Harpstead’s first time before a House committee; she’s appeared before a couple Senate bodies looking into problems at the department that has approximately 7,300 employees and an $18 billion biennial budget.
Among changes Harpstead has begun to put in place are new payment process controls, centralized procurement operations, and filling leadership positions, some of which are newly created.
“It’s been a full 90 days,” she said.
Her first priority is regaining confidence inside and outside the department.
“There is nothing more important for the Minnesota Department of Human Services than to be trustworthy for the people of Minnesota — the over 1 million people we support to live in the community and all taxpayers. Period,” Harpstead said.
Officials across state agencies and departments commonly reference looking out for taxpayers — where’s the money being spent.
As for the Human Services Department, Harpstead said the problems were not as much a problem of financial controls as process controls.
“We need to sharpen soft interdepartmental process controls to be sure service payment decisions are signed and documented by the right people,” she said, while noting, but not minimizing, the reported errors represent 0.01 percent of department payments.
“There’s no level of fraud that’s OK for me,” said Rep. Jeremy Munson (R-Lake Crystal).
“One dollar wasted is too much,” added Rep. Tina Liebling (DFL-Rochester), the division chair.
Rep. Nick Zerwas (R-Elk River) said that percentage may not be much in total money administered annually by the department, but, it is a big number to counties and tribes who may be on the hook to repay some of the overpayment.
Harpstead said both sides will need to work together on a potential resolution.
Zerwas has been pushing for a forensic legislative audit of the department. “Gov. Walz and I are open to this because it will make us all stronger,” Harpstead said.
Amid whistleblower concerns, Harpstead said the department has developed a mantra to be tough on process, yet be supportive and encouraging to people.
“We will not suppress or retaliate against anyone inside DHS who comes forward pointing to problems, and we intend to have a culture where people feel encouraged to surface problems.”
Larger change could be coming
The cry amongst some legislators and others, including former interim commissioner Pam Wheelock, has been the Human Services Department needs to split entitlement programs separated from health-specific, direct-care programs.
“The governor and I have been talking throughout my first 90 days about how the department should be structured and whether restructuring the department would improve efficiency, accountability and delivery of services,” Harpstead said. “The governor will be making an announcement in the coming days on this matter.”
However, she expressed some initial concerns related to extra cost, the process of putting together centralized controls would need to be recreated, and that county officials, who manage local services, would likely need to deal with multiple agencies or departments.