It’s becoming increasingly clear why Tim Walz dropped out of the Minnesota Governor’s race. The news about the massive fraud that took place in the state on his watch gets worse by the minute. As Townhall reported earlier, Walz’s malfeasance means actual disabled children, adults, and their families will suffer while the reputable care centers that serve them are forced to close.
The DOJ has not only opened up a criminal investigation into Walz, but now Minnesota’s Legislative Auditor has just dropped a damning bombshell into Walz’s lap. According to a report by the auditor, the Minnesota DHS — under Walz’s tenure — had almost zero internal controls and oversight as it awarded more than $400 million in grants.
To make matters worse, it appears DHS also fabricated records.
Included in the report are several slides related to the Behavioral Health Administration (BHA) and its handling of grants.
According to the Office of the Legislative Auditor (OLA), the BHA was tasked with administering grants “to provide prevention, treatment, and recovery services for individuals with mental health conditions or substance abuse disorders.”
The OLA reported that between July 1, 2022, and December 31, 2024, BHA had total grant expenditures totaling $425,541,000, and $191,855,000 grants were given to nongovernmental organizations.
The OLA tested requests for proposals and single-source grants, grant agreements and amendments, grant payment, grant monitoring, grant closeout evaluations, and the training/control environment.
And it turns out the BHA did not comply with most of the requirements tested by the OLA.
For 15 of 24 single-source grants, the BHA did not comply with requirements. The BHA also paid millions to grantees before agreements were executed, or by bypassing the competitive grant award process. They also overpaid two grantees more than $40,000.
There were missing or past-due reports fore more than half of 51 grant agreements, and the BHA paid more than $13 million, and documentation was missing for 27 of 67 monitoring visits.
The OLA found “serious concerns” with one grantee and two subcontractors, including being unable to “determine if they provided grant-related services” and that the grant manager left the BHA and began work for a grantee after awarding it a payment of more than $670,000.
For 63 of 71 grant agreements, financial reconciliation was incomplete, including some that had no or limited documentation and some reconciliations completed after final payments.
The OLA noted that a $1.5 million payment was provided in FY 2025 for “comprehensive integrated healthcare through certified community Behavioral health clinic model of service,” but that there was “no mechanism for oversight,” and the money was “not subject to Office of Grant Management policies.
Staff told the OLA that “Executive leadership has repetitively shown staff that they won’t take staff’s concerns or questions seriously until something serious happens or it makes the news.”
But perhaps the most damning is a letter from the OLA that says Walz’s DHS was creating or back-dating documentation during the audit.
Here’s what that letter says (emphasis added):
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This report presents the results of our performance audit of the Department of Human Services (DHS) Behavioral Health Administration (BHA) grants for the period July 1, 2022, through December 31, 2024. The objectives of this audit were to determine if BHA had adequate internal controls and complied with significant finance-related requirements related to oversight of grants.
This audit was conducted by Valentina Stoica, CPA (Audit Director), Holly Runia (Audit Team Lead), and auditors Jonathan Brandtner, Nicole Heggem, Erick Olsen, Cary Sumague, Zakeeyah Taddess, and Emily Wiant, with assistance from Jodi Munson Rodriguez (Deputy Legislative Auditor, Program Evaluation Division) and Caitlin Zanoni-Wells (Principal Program Evaluator).
We received the full cooperation of staff from DHS and BHA while performing this audit. However, during the course of our audit, we identified a number of documents that BHA either backdated or created after our audit began. Generally accepted government auditing standards require auditors to obtain “sufficient, appropriate evidence to provide a reasonable basis for addressing the audit objectives and supporting their findings and conclusions.”¹ The standards further state, “evidence is not sufficient or appropriate when using the evidence carries an unacceptably high risk that it could lead auditors to reach an incorrect or improper conclusion.” As a result, we could not fully rely on this documentation.
Editor’s Note: Help us continue to report the truth about corrupt politicians like Tim Walz.
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