An internal audit of the Minnesota Department of Human Services (DHS) has confirmed key elements of whistleblower Faye Bernstein’s allegations—that she faced retaliation after raising concerns about noncompliant state contracts. The findings highlight deep-rooted issues within DHS’s Behavioral Health Division (BHD), validating long-overdue calls for reform.
Whistleblower Raises Concerns—and Faces Consequences
Bernstein, a longtime DHS compliance officer, testified in August 2024 that she was targeted for calling out “substandard and noncompliant” contracts in the agency’s behavioral health division. According to her, after she emailed colleagues urging vigilance, she was escorted out of her office, sidelined from her duties, and even urged to seek counseling as retaliation for doing her job (Fox 9 Minneapolis–St. Paul, 2025; Star Tribune, 2020).
Her claims included managers accusing her of focusing too much on compliance and spreading rumors to undermine her credibility (Fox 9 Minneapolis–St. Paul, 2025).
Audit Validates Retaliation Claims
A subsequent internal audit corroborated many of Bernstein's concerns. It documented at least 60 violations of Minn. Stat. §§ 16A.15 and 16C.05—laws governing payment authorization and contract obligation procedures—during fiscal year 2019. The audit also found BHD personnel had created informal conflict-of-interest procedures that bypassed state ethics standards, permitted dissolved entities to receive funding, and failed to provide adequate training to staff involved in contract or grant management (Minnesota Sun / Alpha News, 2020).
That audit occurred in response to internal complaints and provided overdue confirmation of whistleblower claims (Minnesota Sun / Alpha News, 2020).
Broader Weaknesses Highlighted
A separate 2024 report from the Office of Legislative Auditor (OLA) found that DHS lacked adequate internal controls agency-wide. The report criticized DHS for failing to ensure employees had proper training, job descriptions, or approval protocols required for managing grants and contracts—reflecting persistent deficiencies in internal oversight (KSTP, 2024).
State legislators and advocacy groups have since proposed dividing DHS into smaller, more responsive agencies, including a separate Children, Youth and Families entity and streamlining Medicaid oversight (Reddit commentary, 2023).
Systemic Consequences
Bernstein’s experience exemplifies how institutional systems can discourage accountability. Employees who speak out are often marginalized, creating a chilling effect that dissuades others from reporting wrongdoing. DHS officials—including Commissioner Jodi Harpstead—have publicly pledged to end retaliation, but many whistleblowers report no substantial change in practice (Fox 9 Minneapolis–St. Paul, 2025; Star Tribune, 2020).
Several lawmakers—including Representative Kristin Robbins and Rep. Dawn Gillman—are now demanding federal audits of DHS and stronger legislative protections for employees reporting fraud (Rep. Kristin Robbins, 2025; Rep. Dawn Gillman, 2024).
Related: DHS Whistleblower Retaliated Against for Exposing Opioid Contract Fraud
Why This Matters
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Whistleblower Integrity Confirmed: Independent audit findings validate the experiences of employees like Bernstein who are punished for exposing wrongdoing.
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Public Funds at Risk: Hundreds of millions in taxpayer dollars are at risk due to improper contracting and grants oversight.
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DHS Reform Is Long Overdue: Structural and legislative reform is essential to prevent repeating cycles of oversight failure and retaliation.
APA-Style References
Alpha News MN. (2020, January 23). Internal audit of Minnesota DHS confirms allegations of whistleblower who was retaliated against. The Minnesota Sun. https://alphanews.org/internal-audit-of-minnesota-dhs-confirms-allegations-of-whistleblower-who-was-retaliated-against/
Fox 9 Minneapolis–St. Paul. (2025, October). Minnesota DHS whistleblower says she was warned she could be fired for speaking up. https://www.fox9.com/news/minnesota-dhs-whistleblower-i-got-threatening-warning-about-speaking-up
KSTP. (2024, December). Legislative auditor: DHS didn’t have adequate internal controls, failed to follow key legal requirements. https://kstp.com/kstp-news/top-news/legislative-auditor-dhs-didnt-have-adequate-internal-controls-failed-to-follow-key-legal-requirements/
Rep. Dawn Gillman. (2024, December 10). Representative Gillman responds to Legislative Auditor finding significant failures in Department of Human Services’ financial oversight. House of Representatives, State of Minnesota. https://www.house.mn.gov/Members/Profile/News/15600/49859
Rep. Kristin Robbins. (2025, March 10). House passes Robbins’ bill to strengthen whistleblower protections for state employees. House of Representatives, State of Minnesota. https://www.house.mn.gov/members/profile/news/15504/50327
Star Tribune. (2020, January 22). Audit finds weak internal controls at Minnesota Department of Human Services. https://www.startribune.com/audit-finds-weak-internal-controls-at-minnesota-department-of-human-services/567171062
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