Friends and neighbors,
Earlier this month, the Minnesota Department of Human Services (DHS) announced it will close the fairly new Housing Stabilization Services program after federal investigators uncovered widespread fraud. The program began in 2020 with the goal of helping people with disabilities, mental health challenges, or substance use disorders, as well as seniors, secure and maintain housing.
What was intended as a helpful resource has turned into another costly failure, draining your tax dollars and leaving behind a lot of people who actually need help.
The original budget projected about $2.5 million in annual costs. Instead, spending grew sharply almost immediately, reaching $21 million in 2021, $42 million in 2022, $74 million in 2023, $104 million in 2024, and more than $60 million in the first half of this year. Federal agents found evidence of providers billing for services that never happened, falsifying paperwork, and submitting charges worth tens of thousands of dollars for single clients. The FBI has conducted raids, and DHS suspended payments to dozens of providers after finding credible signs of fraud.
The closure will not happen immediately. Federal approval is required, along with a public comment period, and that process could take months. Until then, providers not under investigation can continue to submit claims. This means taxpayer money will continue flowing to the program until the official shutdown date.
Unfortunately, this case is just a different episode with the same script: Concerns about questionable billing and unqualified providers were raised long before this investigation began. Those concerns went unaddressed for too long, and the program continued to grow without adequate safeguards.
DHS has struggled to provide clear numbers on the total losses or the number of people who were helped. Figures shared with lawmakers have not always been consistent, raising doubts about whether the agency has a complete understanding of the situation.
Fraud of this scale, happening over and over, in program after program, destroys trust in government – trust that was already eroding. It also harms the very people the program was meant to help.
Many of us say it every time there is a new case of fraud: We need stronger oversight and tighter controls within Minnesota government’s administration of these programs. The administration, up to this point, has utterly failed to protect your tax dollars. It’s long past time they took the fraud problem seriously.
If you have any questions, please let me know.
Sincerely,