Another day, another Minnesota government disaster, this time with an official state audit putting the numbers and the dysfunction in black and white. A blistering report from the nonpartisan Office of the Legislative Auditor found widespread failures inside the Minnesota Department of Human Services Behavioral Health Administration, where more than $425 million in taxpayer-funded grants were handed out with shockingly little oversight.
Between July 2022 and December 2024, DHS distributed behavioral health grants to 830 organizations, most of them nongovernmental. According to auditors, the agency often could not show basic documentation proving the money was monitored or that services were even delivered. Progress reports were missing, site visits were incomplete, and in some cases there was no evidence oversight happened at all.
It gets worse. The audit flagged records that appeared to be backdated or created during the audit itself, raising serious concerns that DHS staff scrambled to manufacture paperwork once auditors started asking questions. That is not a clerical error, that is a credibility crisis.
One particularly ugly example involved a DHS grant manager who approved more than $600,000 in payments, then later left the agency to work for the same organization that received the funds. That is not just bad optics, it is a textbook conflict of interest that would get someone fired in the private sector without hesitation.
Republican state Senator Mark Koran did not mince words, calling the findings a complete breakdown in how DHS manages hundreds of millions of dollars. He said the agency failed to verify services, failed to implement basic controls, and then created documentation after the fact to mislead auditors. That accusation alone should trigger resignations.
The internal culture described in the report is just as troubling. Nearly three quarters of employees surveyed said they lacked proper training to administer grants. One employee told auditors that leadership routinely ignored staff concerns until something blew up publicly or made the news. That sounds less like an oversight failure and more like an institutional habit.
The timing could not be worse for Minnesota Democrats. The report lands amid a broader fraud scandal prosecutors say could reach $9 billion statewide and comes after Governor Tim Walz abandoned his 2026 reelection bid. Republican House Speaker Lisa Demuth called the report evidence of a culture of fraud, negligence, and deception, and demanded immediate answers.
Auditors ultimately concluded the state did not comply with most requirements tested for mental health and substance use disorder grants and lacked adequate internal controls. In plain English, the system was broken from top to bottom.
Acting DHS Commissioner Shireen Gandhi said she takes responsibility and described the audit as a roadmap for improvement. That might be comforting if Minnesotans had not heard similar language before, right before the next scandal hits.
When hundreds of millions of dollars can vanish into paperwork black holes, when documents are allegedly fabricated, and when leadership shrugs until auditors show up, trust evaporates fast. This audit did not just expose technical failures. It exposed a government culture that treated taxpayer money like monopoly cash and accountability like an optional feature.
They need to investigate all sanctuary states the Democrats run.