DHS IGNORING STATE LAW AND REFUSING ACCOUNTABILITY OVER WHISTLEBLOWER COMPLAINTS
We heard very interesting testimony in this week’s House Fraud Prevention and State Agency Oversight Policy Committee hearing from a Department of Human Services (DHS) whistleblower and Judge Tim O’Malley, who was appointed last fall as Governor Walz’s new Director of Program Integrity.
Unfortunately, no one from DHS thought it was important enough to show up to respond to the whistleblower’s testimony or to answer questions about Judge O’Malley’s recommendations in his report, “The Roadmap to Program Integrity and Fraud Prevention.”
Their refusal to be available for questions in our hearing was even more frustrating when they appeared a few minutes after we gaveled out to appear before the Ways & Means Committee in the same hearing room. They refused to answer questions for us, but came to the next hearing to ask for more taxpayer money. I couldn’t believe it!
Faye Bernstein, a brave whistleblower who is still employed by DHS, came forward publicly to share her experience of being retaliated against for raising questions about how contracts were managed by DHS’s Behavior Health Division.
Faye raised her concerns seven years ago and was promptly escorted out of the department and refused entry to any DHS property while an investigation was conducted into her job performance, not the concerns she raised.
After a months-long investigation in which she was smeared and retaliated against, she was eventually reinstated because it was determined none of the allegations leveled against her by agency officials were true.
Although she was eventually cleared by the investigation, Ms. Bernstein was subjected to unnecessary stress and great personal cost to her career, health and reputation. We all owe a debt of gratitude to Ms. Bernstein and the other whistleblowers who courageously speak out to help stop fraud and protect taxpayers and vulnerable citizens.
Judge Tim O’Malley was appointed by Governor Walz last fall to lead the Administration’s fraud prevention efforts for the rest of Governor Walz’s term. He testified that he began his investigation in January and issued his report and recommendations on February 23, 2026.
The O’Malley report had many specific, practical recommendations to reform DHS, including changing the culture that enables fraud by retaliating against whistleblowers and prioritizing “compassion” over “compliance.” The report also recommended DHS participating in public hearings before a new Executive Branch Compliance Committee.
While I agree with many, but not all, of the O’Malley Report recommendations, it is clear that DHS could take many steps immediately to begin necessary reforms to change culture and increase internal controls over taxpayer’s money. By making the conscious decision to boycott this hearing, it’s clear there has been no culture change in DHS.
A second portion of the hearing was focused on how DHS is currently in violation of a state law that requires periodic data matching to ensure those receiving Medicaid and Medical Assistance are still eligible for the program. This periodic data matching is required under law and also requires an annual report to the Legislature about the number of people that have found to be ineligible and disenrolled.
DHS produced the reports in 2019 and 2020, but the program was temporarily suspended during the Public Health Emergency for COVID. The periodic data matching was supposed to resume in 2023, however, and the reports for 2024 and 2025 still have not been produced, which is a clear violation of law.
Former House Speaker Kurt Daudt, who had authored the original legislation, testified about the intent of the bill and the statutory requirements that DHS is violating. Of course, since DHS refused to attend the hearing, they did not have to answer the many questions raised about this program and the missing reports. Stay tuned.
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