Audit finds 12 compliance issues at MN Governor’s Office
A legislative audit of Minnesota Gov. Tim Walz’s office identified 12 compliance issues — including failure to recover costs for private events at the Governor’s Residence, missing or late retroactive pay, an incomplete electronics inventory, inaccurate reimbursements and late vendor payments — while finding no problems with the governor’s or lieutenant governor’s salaries or staff who worked on the 2024 presidential campaign. Republican leaders criticized the administration’s financial controls, and separately the Legislative Auditor released a different report documenting systemic oversight failures in DHS behavioral‑health grants, with missing documentation and questionable payments prompting reforms.
📌 Key Facts
- A legislative audit found the Minnesota Governor’s Office failed to properly follow state policies, with examples including failure to recover costs for private events at the Governor’s Residence, missing or late retroactive pay for some employees, an outdated inventory of office electronics, inaccurate reimbursements, and late vendor payments.
- Auditors specifically examined controls over receipts and reimbursements from events at the Governor’s Residence and controls over vendor and employee payments.
- The audit confirmed no problems were found with the governor’s and lieutenant governor’s salaries or with staff who worked on the 2024 presidential campaign.
- Republican lawmakers, including Senate GOP Leader Mark Johnson and House Speaker Lisa Demuth, publicly criticized the administration’s financial controls following the findings.
- A separate, more recent Legislative Auditor report focused on DHS Behavioral Health grants found systemic grant-oversight failures in 63 of 71 grants reviewed between July 2022 and December 2024.
- Auditors flagged specific troubling transactions in the DHS review, including a one-month $672,647 payment to a provider that could not produce invoices or service records and a grant that was amended from $600,000 to $5.6 million while the grant manager later went to consult for that same provider.
- The DHS report concluded the Behavioral Health division failed to ensure grants were used for their stated purposes, often lacked basic documentation, and did not consistently monitor grantees; DHS announced creation of a Central Grants Office, additional controls, and staff retraining in response.
- The DHS findings were linked to a broader fraud environment already exposed in cases such as Feeding Our Future, Housing Stabilization Services, ICS and Evergreen Recovery, with much suspect spending flowing through Twin Cities–area treatment and recovery organizations.
📊 Relevant Data
Federal prosecutors estimate that fraud in Minnesota's Medicaid and other social services programs under Governor Walz could total up to $9 billion since 2018.
Gov. Walz calls $9 billion fraud estimate in Minnesota-run Medicaid services 'sensationalized' — Minnesota Reformer
The Feeding Our Future fraud scheme involved $250 million in federal funds, with over 70 defendants charged, the majority of whom are Somali-American.
2020s Minnesota fraud scandals — Wikipedia
Somali Minnesotans have a poverty rate of 36% (2019-2023), compared to the statewide poverty rate of about 9% and the U.S. rate of 11.1%.
Jack Brewer speaks out against 'Somali elite' amid fraud revelations — Fox News
Minnesota is home to the largest Somali diaspora in the U.S., with over 80,000 Somali-Americans, resettled primarily due to the Somali Civil War in the 1990s through refugee programs facilitated by voluntary agencies (VOLAGs) like Lutheran Social Services and Catholic Charities.
How Minnesota became a hub for Somali immigrants in the U.S. — NPR
In the DHS Behavioral Health grants, $425 million was distributed from July 2022 to December 2024, with systemic oversight failures in 63 of 71 grants reviewed, increasing fraud risk.
Audit finds weak oversight, fraud risk in DHS grants — MPR News
Somali-Americans are overrepresented in Minnesota fraud scandals relative to their population share (about 1-2% of Minnesota's population), with many cases linked to poverty rates and systemic vulnerabilities in grant programs.
A Somali-American former investigator: why you're hearing about fraud in my community — Minnesota Reformer
📰 Source Timeline (3)
Follow how coverage of this story developed over time
- This article reports a separate, new Legislative Auditor report focused on DHS Behavioral Health grants, not the Governor’s Office; it details systemic grant‑oversight failures in 63 of 71 grants reviewed between July 2022 and December 2024.
- Auditors found a one‑month $672,647 payment to a provider that could not produce invoices or service records, and highlighted a grant that was amended from $600,000 to $5.6 million while the grant manager later went to consult for that same provider.
- The report concludes DHS’s Behavioral Health division failed to ensure grants were used for their stated purposes, lacked basic documentation, and did not consistently monitor grantees, prompting DHS to announce a new Central Grants Office, additional controls, and staff retraining.
- The piece links these failings to the broader fraud environment already exposed in Feeding Our Future, Housing Stabilization Services, ICS and Evergreen Recovery cases, and notes that much of the suspect spending flowed through Twin Cities‑area treatment and recovery organizations.
- Audit examples detailed: failure to recover costs for private events at the Governor’s Residence; missing/late retroactive pay for some employees; failure to keep an updated inventory of office electronics; inaccurate reimbursements; late vendor payments.
- Scope emphasis: auditors examined controls over receipts/reimbursements from events at the Governor’s Residence and vendor/employee payments.
- Political reaction: quotes from Senate GOP Leader Mark Johnson and House Speaker Lisa Demuth criticizing the administration’s financial controls.
- Audit confirmation that no issues were found regarding the governor’s and lieutenant governor’s salaries and staff who worked on the 2024 presidential campaign.