Gov. Tim Walz takes step to scrutinize Department of Human Services, consider breaking up agency

Minnesota has hired a consultant to evaluate the embattled Department of Human Services (DHS), including looking at options for breaking up the agency, Gov. Tim Walz announced Friday.

"As my administration surfaces issues at the Department of Human Services that have been going on for years, we must dig deeper to find the root of these problems," Walz said in a statement. "That is why we need an outside expert to take an independent look at DHS and recommend whether breaking up the agency would improve efficiency, increase accountability, and better serve Minnesotans."

Ever since turmoil at the top of the agency began this summer, with a string of high-level resignations and unresignations, there have been calls to break it up. The sprawling department employs 7,300 workers, has an $18.5 billion biennial budget and touches more than 1 million Minnesotans through health insurance, child-care subsidies and other programs.

"We are thankful the governor is taking the restructuring of DHS seriously following repeated Republican calls to action. Breaking up the department is a monumental task, and something the Legislature has examined before," said Sen. Michelle Benson, R-Ham Lake, who chairs a key health committee. "When Senate Republicans have a seat at the table and voice in the debate, we find solutions that benefit the whole state."

Many have asserted that the DHS has become too big to manage, especially after revelations of improper payments and a legislative auditor's report that found "troubling dysfunction" at the agency had caused nearly $30 million in overpayments to two Indian bands.

A breakup has been suggested many times over the past decade. Even this year, high-ranking DHS officials have said that it might make sense to split off the department's Direct Care and Treatment division, which runs state hospitals and other facilities, including the state's sex offender treatment program. That division employs 4,900 people.

At a Senate hearing earlier this week, DHS Commissioner Jodi Harpstead said she was "neutral" on the issue.

Public Sector Consultants, based in Lansing, Mich., has a $28,000 contract to begin evaluating the agency. But its work will be just the first step; by February of next year, it will develop the criteria for a request for proposals that will be used to hire the consulting firm that will do the actual analysis.

While some lawmakers have proposed breaking the DHS into smaller parts to improve internal accountability, any breakup would inevitably raise questions about increasing the cost and size of state government, as each new agency would need a commissioner as well as functions such as human resources and legal services. It could also create more barriers for people trying to obtain services.

Glenn Howatt • 612-673-7192 Twitter: @GlennHowatt