Audit Finds Fabricated Documents in Minnesota Grant Programs

St. Paul, MN (MinnesotaNow) - The Office of the Minnesota Legislative Auditor has issued a new report finding evidence that state employees may have fabricated documentation involving state grants for programs addressing mental health and substance abuse disorders.

State Legislative Auditor Judy Randall, in her report to the Legislative Audit Commission, indicated that a number of documents were identified as either backdated or created after the audit of the Behavioral Health Administration was underway. Randall told the commission, "Frankly, in the 27 years I have been with the OLA I have never seen this before."

The discovery was made while examining documentation for grants approved between July 1, 2022, and the end of last year that totaled nearly $480 million.

In addition to evidence of potential document fabrication, the report also listed more than a dozen findings identifying problems in the management of taxpayer funds used to award grants by the state agency. They included paying grantees for work performed before the administration executed grant agreements and overpayments to grantees. The audit also found that the state did not use a competitive bidding process in awarding mental health provider supervision grants and that payments were made to grantees for costs that were either not incurred or not properly supported by documentation.

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The report further stated that members of the Behavioral Health Administration staff described poor leadership practices, and many indicated they did not receive sufficient training to manage the grant programs. The audit concluded that the agency did not comply with most of the requirements that were tested and lacked adequate internal controls over grant funds.