Top Minnesota child care investigator on paid leave for more than 2 months

More than two months after being forced off the job, Minnesota’s top investigator of child care fraud remains in limbo – and she’s still getting paid.

Inspector General Carolyn Ham has been on paid leave since March 18, when the state Department of Human Services started investigating what a spokeswoman would only refer to as an “active complaint” against Ham. The move came days after an audit revealed dysfunction within Ham’s investigative unit and an unknown amount of fraud in the state’s child care assistance program.

Ham has previously said the accusations against her are “completely without merit.” She currently makes $132,880 a year, a DHS spokeswoman said.

Meanwhile, when Gov. Tim Walz signs the state budget into law starting Thursday, Ham’s former unit will get new funding and responsibilities to root out fraud.

The health and human services funding bill passed by state lawmakers Saturday provides $5 million to buy a tracking system while hiring new analysts, investigators and inspectors. About $1.3 million of that will be funneled into Ham’s former unit, DHS’s Office of Inspector General. 

The state’s nonpartisan legislative auditor had recommended separating the investigative unit from DHS, the agency whose programs it oversees. Lawmakers declined to do so.

Senate Majority Leader Paul Gazelka said he was pleased with the overall budget but disappointed that the inspector general’s office was staying put.

“We felt that it should be moved out,” Gazelka, R-Nisswa, said in an interview. “We’ll continue to work on that. We think that’s a reform that should happen.”

Several policy changes are aimed at cracking down on child care centers that produce fake attendance records and count phantom kids as program participants. Under the budget, Minnesota will increase reporting requirements and lower the threshold to kick a child care provider out of the assistance program.

State Rep. Dave Pinto, who helped guide the measures through the House, said they would increase accountability.

“There’s a whole bunch of provisions included in the bill that should have major impact,” said Pinto, DFL-St. Paul.

Walz and House Democrats had sought to impose cultural sensitivity and implicit bias training on DHS staffers who work with the child care assistance program. Some of the providers under scrutiny have been Somali.

But the training requirements are not in the final bill.

Nearly 1,700 Minnesota children are on a waiting list to get into the child care assistance program. Pinto said because Senate Republicans opposed significant new funding, the waiting list would remain.

“I certainly would hope this would help a bit with the waiting list. But our House bill, in addition to these proposals, we also had significant funding that was going to reduce that waiting list. Unfortunately very little of that made it through negotiations with the Senate,” Pinto said in an interview. “I’m afraid there will still be a significant waiting list.”

Senate Republicans had initially sought to eliminate the entire program, but backed down late in the legislative session.

“We said if there’s not going to be changes, we don’t want the program,” Gazelka said. “But in the end, the governor leaned in with us and said, ‘Let’s do something about it.’”

Walz is scheduled to sign a portion of the budget into law Thursday afternoon, and will sign remaining pieces by Friday, a spokesman said.

The legislative auditor found “serious rifts” in the DHS inspector general’s office, raising concerns that Ham was not speaking with investigators and they did not trust her. 

DHS Deputy Commissioner Chuck Johnson remains in charge of the inspector general’s office, a spokeswoman for the agency said Wednesday.