Revisiting: Minnesota To Break Up Its Largest Agency

 

Photo Credit: @StarTribune / Featured: Minnesota Department of Human Services Commissioner Jodi Harpstead

Revisiting: Minnesota To Break Up Its Largest Agency: This Is "No" Turning Point for Public Accountability

After years of mounting dysfunction, the Minnesota Department of Human Services (DHS)—the state’s largest agency—is being broken up in one of the most significant government restructurings in recent state history. The move, which will take effect in 2025, reflects a hard reckoning with the agency’s long-standing struggles: financial mismanagement, leadership instability, and systemic breakdowns in oversight.

For years, DHS has operated as a bureaucratic behemoth—managing more than $20 billion annually and overseeing programs that affect one in five Minnesotans. It has been responsible for everything from mental health facilities and substance abuse treatment to adoption, child care, housing, and Medicaid. But this enormous scope came at a cost: silos of miscommunication, oversight failures, and recurring scandals that undermined public trust.

Among the most damning issues were major financial errors. Auditors and investigations uncovered tens of millions in overpayments to health providers, child care fraud, billing mistakes in tribal treatment programs, and an outdated technology infrastructure ill-equipped to manage such a sprawling operation. These weren’t minor bookkeeping issues—they were symptomatic of an organization that had grown too large to govern effectively.

The public fallout became impossible to ignore. In 2019, two top DHS officials resigned abruptly, sparking further investigations. As controversies mounted, calls to break up the agency intensified. Lawmakers across party lines began to question not just the agency’s competence but also the wisdom of concentrating so many essential services under one administrative roof.

In response, the Minnesota Legislature passed a landmark restructuring bill in 2023. Under the plan, DHS will be divided into three distinct entities:

1. The Department of Direct Care and Treatment (DCT), which will oversee the state's psychiatric hospitals, group homes, and other residential treatment programs. This will be the largest of the new departments, with nearly 5,000 employees.

2. The Department of Children, Youth, and Families (DCYF), which will take over child protection, adoption, early learning, and related family support services. Between 600 to 1,100 staff will be transferred to this new agency.

3. A refocused DHS, which will shrink in size but continue to manage Medicaid, disability services, housing assistance, and other core social programs.

The restructuring will cost an estimated $4 million annually through at least 2027 to support additional leadership roles, HR departments, and legal infrastructure for the new agencies. Critics have raised concerns about the added administrative cost and the potential for inter-agency communication gaps. But supporters argue that the benefits—greater accountability, better oversight, and more focused missions—far outweigh the risks.

Commissioner Jodi Harpstead, who took over the agency amid its crisis in 2019, has been a vocal supporter of the transformation. She described the early phase of her leadership as “Operation Swiss Watch,” focused on rebuilding trust, strengthening leadership, and enforcing more rigorous internal controls. Under her guidance, DHS has made some strides toward modernization and transparency, but the structural limits of the agency made deeper reform nearly impossible without a fundamental change.

Advocates say the breakup offers a much-needed opportunity to rethink how human services are delivered in Minnesota. Smaller, mission-specific agencies can respond more nimbly to the populations they serve. For example, a department solely focused on children and families will be better equipped to respond to the state’s growing child protection challenges—without being buried under unrelated mandates.

Still, the road ahead won’t be easy. Transitioning thousands of employees, reassigning responsibilities, and ensuring seamless delivery of essential services during the reorganization will require enormous coordination and political will. There’s also the question of oversight—will the new agencies be held to higher standards, or will they replicate the same bureaucratic pitfalls under new names?

The stakes are high. For thousands of Minnesotans—children in foster care, seniors on Medicaid, families relying on mental health services—this isn’t about government restructuring; it’s about the quality and reliability of the services that shape their daily lives. The success of the DHS breakup won’t just be measured by budget audits or org charts, but by whether it leads to real improvements for the people who rely on these programs the most.

In the end, Minnesota’s decision to break up DHS reflects a deeper truth: sometimes, the only way to fix a system that’s broken beyond repair is to start over—thoughtfully, transparently, and with an unwavering focus on the people it's meant to serve.

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 References

Hughlett, M. (2024, August 5). Minnesota Department of Human Services to be broken up after years of scrutiny. Star Tribune. https://www.startribune.com/minnesota-department-of-human-services-to-be-broken-up-after-years-of-scrutiny/600286860

Mankato Free Press Editorial Board. (2024, August 6). Breakup of the Department of Human Services is sensible and overdue. Star Tribune. https://www.startribune.com/the-breakup-of-the-department-of-human-services-is-sensible-and-overdue/600287925

Van Berkel, J. (2024, August 5). The Department of Human Services is breaking up. What does that mean for Minnesotans? Star Tribune. https://www.startribune.com/minnesota-department-of-human-services-breaking-up-what-does-that-mean-for-children-families/600350980

CBS News Minnesota. (2023). The startling scale of dysfunction at Minnesota’s Department of Human Services. https://www.cbsnews.com/minnesota/news/the-startling-scale-of-dysfunction-at-minnesotas-department-of-human-services/

Bring Me The News. (2023). Gov. Tim Walz to hire outside consultant as he looks at breakup of DHS. https://bringmethenews.com/minnesota-news/gov-tim-walz-to-hire-outside-consultant-as-he-looks-at-breakup-of-dhs

Question: If the employee's are afraid what do you think is happening to vulnerable participants that blow the whistle?

Everything that I am going through right now is because of the relentless years I spent reporting DHS crimes that illegally prevented me from accessing medical treatment—while my body deteriorated and my children's lives were ruined, as I was systematically kept powerless. I've had to watch all this legal action come and go since 2003, while screaming from the shadows that slander and retaliation by a corrupt government has pushed generations of my bloodline in, while they were robbing taxpayers blind—again and again—because everyone, on every side, said: "You're a Black woman, surely you have nothing to add, and you're supposed to be on welfare."

Why is this state still allowing criminals to victimize me, rather than collecting documents and testimony to lock people up, awarding me a judgment, and a medal for never giving up—and for protecting future taxpayers at this point?

Answer: They don’t want to change. I have seen these type of farce too many times to count.

Related: Leadership Shift at Minnesota DHS: Jodi Harpstead Steps Down Amid Ongoing Reform and Scrutiny