Operational Planning Can Prevent Fraud in Minnesota’s Human Services

Mgmtlaboratory.com — June 9, 2026

For over ten years, I have examined Minnesota’s human services delivery system, from the governor’s office down to county workers. This experience has brought me to a solid conclusion: the lack of formal operational planning throughout the delivery system has consistently left the State’s human services infrastructure susceptible to severe fraud (1).

Minnesota’s existing system stems from a deeply entrenched administrative culture that has persisted through various political administrations, social movements, and economic cycles. Senior managers have historically characterized their strategy as “70% compassion and 30% compliance” (2). However, what has been lacking is a comprehensive managerial initiative to allocate resources effectively, monitor performance, and guarantee the consistent provision of high-quality human services.

A Long History of Warnings—and Recurring Fraud. Vulnerabilities in Minnesota’s social and human services programs have been documented for decades. Public attention has periodically heightened, but the underlying weaknesses persist. Programs frequently identified as susceptible to fraud include: group homes, child care assistance, personal care assistance, and medical transportation. These programs lacked stringent reporting and payment controls typically required by federal funding agencies (2)(3)(4).

The earliest known warning dates back to February 17, 1977, when the state’s Department of Human Services was told: “Regardless of a rule’s precision or stringency, the level of care available in facilities will not consistently meet requirements unless an active enforcement program exists.” Despite repeated alerts over the following decades, the vulnerabilities remained.

In 2019, the Department completed a report on improper payments for self‑administered opioid treatment medication. The illegal payments—undetected for years—totaled $29 million before triggering an investigation by the Office of the Legislative Auditor (5)(6). A new commissioner was appointed, but the underlying structural weaknesses endured.

Between 2024 and 2025, the State reorganized programs serving children, youth, and families into a new Department of Children, Youth, and Family. Yet when the public asked what was being done to prevent further fraud, the Commissioner pointed primarily to new measures and an electronic attendance reporting system—incremental steps rather than systemic reform.

Observations on Minnesota’s Human Services Delivery Chain. In a 2019 article on Mgmtlaboratory.com (6), I analyzed the Department of Human Services using a management control systems framework. Since then, I have not observed organizational changes aligned with those recommendations. Based on continued exposure to the State’s delivery chain, several systemic issues stand out (10):

(1) No measurable top‑line goals. Basic metrics—budget adherence and number of services delivered—are ignored. The prevailing mindset is simply to “complete the work at hand.” Counties maintain more rigorous budgeting than State departments, probably because they are closer to taxpayers. These metrics should serve as the basis of operational

planning.

(2) No strategic planning. Departments do not project long‑term capacity needs, technology requirements, or emerging threats and opportunities. Key factors that should inform year‑to‑year adjustments are not quantified.

(3) No annual operating plan. Annual plans should enhance strategic assumptions with detailed forecasts. However, the budget process functions independently and does not serve as the backbone of operational planning. The top-down distribution of the initial plan and assumptions cannot be observed, just like the bottom-up changes to service delivery

realities.

(4) No clear organizational structure. Without an up‑to‑date organization chart, responsibilities and authority are unclear. The “voice of the customer”—Minnesota residents—cannot be reliably traced upward to senior management. The Office of Management and Budget should play a role in planning and financial control, yet this operational planning resource has only a vague communication link with other departments and offices (6)(7).

(5) No management information system. Managers lack timely, decision‑supporting information, including fraud‑prevention data. Skilled data professionals prioritize perfecting data precision rather than producing actionable insights. Their work is not aligned with the system’s ultimate goals.

(6) Statutory requirements are selectively applied. Minnesota statutes clearly define managerial responsibilities across the delivery chain (8)(9). Yet it appears that senior management concentrates on a small subset of statutes for convenience.

(7) Human resources are not aligned with operational needs. The delivery chain’s primary infrastructure is its workforce—from State staff to county service workers. While personnel are capable, their skills are not continually aligned with evolving operational requirements. No consistent, year‑to‑year training or skill enhancement is evident.

The Role of Management Control Systems. A management control system coordinates, communicates, and motivates organizational resources toward defined goals. Because the span of control limits how much information and how many decisions senior leaders can manage, authority must be delegated to managers at various levels along the delivery chain, down to the point where residents receive services.

Operational planning serves as the tool for facilitating this delegation. It establishes the organized, bidirectional flow of authority and responsibility required for a resilient, fraud-resistant human services system (6).

By Noel Jagolino, Management Consultant

I am grateful to the staff of Mgmtlaboratory.com and Copilot for the assistance in research and writing of this article.

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References:

(1) Mr. Jagolino has more than a decade of experience in Minnesota’s Human Services and Health Care. He also has extensive experience in the administration of financial services and manufacturing, spanning institutions from large corporations to small businesses.

(2) Minnesota Reformer Report: Groundwork for fraud in Minnesota human services goes back 50 https://minnesotareformer.com/2026/02/23/report-groundwork-for-fraud-in-minnesota-human-services-goes-back-50-years/

(3) 5 Eyewitness News. https://kstp.com/kstp-news/top-news/she-warned-dhs-about-fraud-risks-years-ago-now-this-minnesota-state-worker-is-speaking-up-again/

(4) Alpha News. https://alphanews.org/former-dhs-fraud-investigator-delivers-shocking-testimony-says-state-agency-harassed-his-team/

(5) Department of Human Services: Payments for Self-Administered Opioid Treatment Medication. Oct 29, 2019. Www.auditor.leg.mn.us/sreview/dhsover.pdf.

(6) Minnesota Department of Human Services: A Case Study in Management Control Systems. www.mgmtlaboratory.com. Nov, 2019.

(7) How Much Do Services Delivered by Your Agency Cost? Sep 26, Dec 8, Dec 22, 2018. Www.mgmtlaboratory.com/blog.

(8) Essential Human Services; County Delivery; State-County Results, Accountability and Service Delivery. Chapters 402A.01 to 402A.50. www.revisor.mn.gov/statutes/2023/cite/402A. 2023.

(9) Analysis of Statutes Governing Service Delivery Performance. Part III. www.mgmtlaboratory.com. Jul, 2025.

(10) Annual Cycle Management Process. www.mgmtlaboratory.com. Sep 16, 2017.

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