How Fraud in Minnesota Human Services Impacts Us Locally

Across Minnesota, and especially here in Faribault and Martin Counties, Human Services programs play a critical role in supporting individuals, families, and communities. With increased attention in recent years on fraud and program misuse, it's more important than ever to understand what fraud is, how it differs from other types of program integrity concerns, and how local agencies work to protect the integrity of these essential services.

Defining the Basics: Fraud, Abuse, Waste, and Error

Public program oversight relies on a clear understanding of several key concepts:

• Fraud is intentional deception used to secure a benefit or payment someone is not entitled to - or to avoid an obligation.
  
• Abuse involves the improper use of a program, position, or authority that results in unnecessary cost or an improper benefit.
  
• Waste refers to the careless or inefficient use of resources that results in unnecessary costs, even without intent to deceive.
• Error relates to mistakes or non‑compliance, either by clients or agency staff, that lead to incorrect administration of benefits or services.

Together, these concepts guide our understanding of program integrity, which includes the strategies and controls designed to ensure the right people receive the right services, in the right way, with proper payment and oversight. 

Federal, State, and Local Roles: A Layered System

Human service programs operate through a partnership across multiple levels of government, each with distinct responsibilities:

• Federal agencies set regulations, distribute funding, and provide oversight.
  
• States interpret federal guidance, add policy layers, enroll providers, and distribute funds to counties.
• Counties conduct daily operations, ensure compliance, and support residents

Recent federal actions, such as preliminary injunctions, funding freezes, and oversight reviews, have introduced instability across programs like SNAP, Social Services Block Grant, TANF, Medicaid, and public health services. At present time, Minnesota continues to operate these programs under active court orders and continues to monitor impacts.

Fraud in the Headlines: What's True for Counties?

Some high-profile cases, such as the Feed Our Future scandal, have raised public concern about fraud within human service programs. But it is important to clarify counties had no involvement, responsibility, or authority in this program's design, funding, oversight, or investigation.

Similarly, many Medical Assistance-funded programs are overseen by the State of Minnesota. Providers enroll with and are paid by the state, with counties holding only a limited role in identifying and reporting suspicious activity.

In contrast, programs like the Child Care Assistance Program (CCAP) involve shared responsibility. Counties determine eligibility, authorize services, and handle billing, while the state licenses and enrolls providers.

Essentially, delivery of human services programs is disjointed, complex and fragmented with varied responsibility and service delivery models, depending on the program or service. 

A Changing Landscape: What Has Contributed to Today's Environment?

Minnesota's human services system has undergone significant changes over the past several years, which have complicated oversight and contributed to increased scrutiny:

• Expansion of consumer-directed support programs
  Increased flexibility in consumer-directed options gives individuals and families more control over their care, allowing them to hire workers, manage services, and choose supports that best meet their needs. While empowering, this flexibility introduces new oversight challenges. With thousands of unique service arrangements, ensuring proper documentation, billing integrity, and consistent care requires more administrative effort than traditional models.
• Shifting provider enrollment responsibilities to the state
  As the state assumes responsibility for enrolling and credentialing providers, counties have less direct visibility into who is serving people locally. Centralized enrollment improves consistency, but it also creates distance between counties and the providers operating in their communities. This shift can make it harder to identify unusual patterns early or address problems quickly when they arise.
• Changes in how disability services are evaluated
  Minnesota has updated assessment tools and processes across disability services, with the goal of improving fairness and consistency. However, each system change requires retraining, new workflows, and adjustments for both staff and providers. During transition periods, increased errors, confusion, and inconsistent practices are common, creating conditions where issues may be misinterpreted such as fraud or trigger additional oversight.
• Pandemic-related disruptions
  COVID‑19 fundamentally changed how human services operate. Remote service delivery, emergency waivers, relaxed documentation requirements, and rapid shifts in eligibility rules were necessary to maintain continuity of care during a crisis. Yet these temporary changes weakened some of the guardrails that normally prevent misuse. Workforce shortages and high turnover added stress to an already strained system, and the effects are still being felt today.
• A large influx of federal funding through the American Rescue Plan Act (ARPA)
  ARPA brought significant new resources to health, economic, and social service programs. While essential for pandemic recovery, the speed and scale of the funding also increased risk. Quick program rollout, evolving guidance, and administrative overwhelm opened the door to documentation gaps, inconsistent practices, and isolated instances of fraud, sometimes far removed from county involvement. Public perception, however, often assumes counties are directly responsible for oversight even when authority rests elsewhere.
• Compliance concerns and heightened media attention
  High-profile fraud cases have put human services programs under intense scrutiny. Media reporting, sometimes without full context, has shaped public narratives that exaggerate the scale of fraud and blur distinctions between programs. As a result, providers may feel unfairly stigmatized, clients may fear being labeled or investigated, and staff experience increased pressure in their daily work. This heightened attention amplifies stress across the system, even when counties are following all required procedures.

Health & Human Services of Faribault & Martin Counties Ongoing Commitment to Program Integrity

Health & Human Services of Faribault & Martin Counties takes fraud prevention and program integrity seriously. Our efforts are longstanding, and have been successful in identifying fraud, waste and abuse over the past several years. These actions are part of our normal operating procedures and include:

• Annual department-wide fraud, waste, and abuse training that requires completion and passing of an exam.
• Internal and external audits on all finances and programs.
• Strong internal controls, including two-person review and signatures on all payments and an additional third-party review of expenses and revenues.
• Verification checks with the Office of Inspector General (OIG) for applicants and vendors.
• Enhanced review process prior to approving any home modifications, rate exceptions, and consumer-directed services.
• Train staff on reporting any suspected fraud to the appropriate investigation channels (local law enforcement or Office of Inspector General).
• Regular case reviews and consultations to ensure program compliance.

These safeguards help ensure accountability, transparency, and responsible stewardship of public funds.

Local Impacts and the Path Forward

The ripple effects of heightened scrutiny, federal uncertainty, and systemwide changes are felt every day across Faribault and Martin Counties. For staff, the increased workload, emotional toll, and pressure to meet evolving expectations have contributed to burnout and moral distress. Many feel the strain of doing more with less amid shifting regulations and raising public expectations. For providers, being unfairly grouped together as "fraudsters" has damaged trust and created additional administrative burden at a time when the workforce is already stretched thin. These challenges directly affect the very people we serve, families and individuals who may now fear stigma, avoid services, or experience disruptions in their access to essential support.

Despite these pressures, our commitment to the community remains unwavering. Moving forward means strengthening trust, advocating for stability in funding and oversight systems, and continuing to refine our integrity practices. It also means supporting the workforce and provider network that forms the backbone of local service delivery. By investing in strong internal controls, transparent communication, and collaborative partnerships with state agencies and local providers, we can stabilize the system and ensure that critical services remain accessible, equitable, and reliable. The path ahead is not without challenges, but our focus is clear: protect the integrity of programs while safeguarding the well‑being of the people who depend on them.