To find fraudsters, Walz seeks investigators and sensitivity training

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz is seeking $5.3 million to strengthen investigations and a requirement that staffers get sensitivity training as he tries to crack down on fraudsters in Minnesota’s child care system.

Walz’s proposal is now in the hands of lawmakers, one week after the state’s legislative auditor could not determine how much fraud was within Minnesota’s child care assistance program. The auditor found dysfunction within the Department of Human Services unit that’s supposed to investigate fraud, and the top investigator is now calling herself a scapegoat.

Walz has not yet held a news conference to outline his proposal. Thursday, a deputy DHS commissioner, Chuck Johnson, explained it to lawmakers in the House Early Childhood committee.

“We need to be effective at addressing the waste, fraud and abuse in the system,” Johnson said. “We need to do it in a way that partnerships with those interested in working with us, and not creating divisions when we don’t need to.”

Among Walz’s proposals:

• Require child care centers to produce attendance reports at any moment to inspectors. Falsified attendance reports – and the lack of an electronic reporting system – have come under scrutiny.
• Spend $5.3 million to build a fraud tracking system and hire DHS inspectors, data analysts, and Bureau of Criminal Apprehension agents to investigate wrongdoing.
• Force staffers to undergo training on cultural sensitivity and implicit bias. Some of the child care centers under scrutiny have been Somali-run.

Republicans blasted the new requirement for cultural competency training.

“There is a competency problem in this government in taking fraud seriously,” said state Rep. Mary Franson, R-Alexandria. “Fraud does not see skin color. Fraud is fraud. It doesn’t matter who is committing fraud.”

The committee was scheduled to consider the Walz plan Thursday evening. Democrats are carrying the bill in the House and have not ruled out making changes to it.

“These are proposals that the administration is bringing forward. And then as the process goes, we’re adding, expanding and identifying areas of improvement,” said state Rep. Dave Pinto, DFL-St. Paul, who is the lead author on the bill.

Meanwhile, Walz’s plan earned a mixed reaction from minority-owned day care owners and community activists. Some pointed to the focus on cultural sensitivity as a positive.

“We cannot look at poorly run centers through the lens of criminality, because it takes money and resources to be high quality,” said Nasro Abshir, who owns the Family First child care center in Minneapolis, which she said serves more than 100 children. “Centers that are struggling need to be supported and not demonized.”

Another man told lawmakers that the governor’s plan would only lead to increased investigations.

“We are getting targeted,” said Mahad Omar.

As the debate played out in the Early Childhood committee, the former leader of the state’s fraud investigation unit spoke publicly about being placed on paid leave amid an investigation.

In a statement provided by her son, Inspector General Carolyn Ham said the accusations against her are “completely without merit.”

“This controversy has become a political distraction and I am eager for the truth to come to light,” Ham said in the statement. “The results of this investigation will show that there was no failure of leadership on my part.”

Ham hasn’t been given the complaint that DHS officials say was made against her. A spokeswoman has declined to release a copy of the complaint to FOX 9, saying it is protected under the state’s data practices law.

Investigators are reporting to Johnson, the deputy commissioner, while Ham is on leave, said a DHS spokeswoman who didn’t want to be named and asked that her statement be attributed to her agency.

Republicans who control the Senate have advanced their own plan to curb child care fraud. It’s unclear if those will be taken up in the House, or whether Walz’s proposal has a chance in the Senate.

Republicans have said Ham should resign and have endorsed changes that would move the inspector general’s office out of DHS to give it more autonomy.