St. Paul – Today, Commissioner Harpstead provided her 90-day report card on the Health and Human Services Department, which spends about 42% of all taxpayer funds spent in Minnesota. Although the agency has been rocked with near-weekly reports of tens of millions of dollars in misappropriations, oversight, and fraud, Harpstead reported her agency is not in turmoil.
Representative Jeremy Munson (R-Lake Crystal), who sits on the HHS committee and attended the hearing noted that the hour-long presentation did not address fraud within the Child Care Assistance Program. An independent overview from the Office of the Legislative Auditor included written testimony from Jay Swanson, Manager of DHS Recipient & Childcare Provider Investigation Unit. Swanson wrote that, “Investigators, as well as the Supervisor and Manager of this unit believe that the overall fraud rate in this program is at least 50% of the $217M paid to child care centers in CY2017.” (Legislative Auditor, “Special Review of the Child Care Assistance Program: Assessment of Fraud Allegations”)
Rep. Munson noted that her agency is required by the federal government to perform an unannounced visit to every childcare center in the state to verify that they are physically there and open for business. The agency had failed to visit each center for five consecutive years. The OLA report noted fraudulent daycare centers, closed down for fraud, reopened the following month under a different name.
She admitted she did not know if they were visiting centers or were compliant with this federal law.
Harpstead mentioned a “Swiss watch” a half dozen times in her presentation, including her new accountability standard to reduce fraud, waste, and abuse of taxpayer dollars. Munson offered criticism of her choosing a 500-year-old technology, which itself has a tolerance for losing three minutes per month. “If the legislature had not made wearing a Smart Watch illegal while driving this year, I would have suggested using a modern technology that is actually accurate and functional.”
In general, the Commissioner went on offense, trying to minimize the role of fraud and mistakes in her agency but claimed that “every dime is important.” Her estimate of $106 million dollars of missing money was challenged by several members of the committee who pointed out that the totals for CCAP fraud are unknown at this point and that the Department’s failure to collect overpaid dollars in the millions has basically been written off by DHS as if it never existed.
Another bombshell that was dropped toward the end of the meeting was the fact that DHS Inspector General Carolyn Ham was found not guilty of any wrongdoing by an internal investigation and would continue working for the agency. Ham was at the center of the CCAP childcare investigation, and her failure to pursue fraud cases was cited by whistleblowers as a key theme in hearings last session.
Rep. Tim Miller (R-Prinsburg) also commented on the hearing saying, “When I travel around my district, ordinary people want to know what happened to all these allegations of fraud. Trust in government bureaucracy is at an all-time low, and Commissioner Harpstead’s reliance on clichés like “the buck stops here” and “Operation Swiss Watch” isn’t going to convince them.”
The NHRC is led by Rep. Steve Drazkowski (Republican-Mazeppa). It includes Rep. Cal Bahr (Republican-East Bethel), Rep. Tim Miller (Republican-Prinsburg), and Rep. Jeremy Munson (Republican-Lake Crystal).