ST. PAUL — One day after state auditors reported "troubling dysfunction" at the Minnesota Department of Human Services, leading to tens of millions of overpaid dollars to two tribes, Gov. Tim Walz said the state needs to better manage its money to restore public trust and support of similar programs.

According to the state's nonpartisan Office of the Legislative Auditor, DHS overpaid the Leech Lake Band of Ojibwe and White Earth Nation by more than $29 million between 2014 and 2019 for medicine-assisted opioid treatments. DHS manages the state Medicaid program, and it allowed the tribes to bill for in-office opioid treatment services when the medications were administered at home.

The difference led to hundreds of dollars in excess Medicaid money flowing into Indian Health Service facilities that administer the treatments over the course of four years. And the state audit indicated overpayments for opioid treatment in non-tribal communities may be ongoing.

Walz at an unrelated event on Wednesday, Oct. 30, said that although the state must do a better job at fiscally managing such programs, the $29 million "did go to its intended purpose of getting people off of addiction and chemical dependency, and for that I am grateful."

Tribal leaders and department officials have echoed that assertion in their testimony to lawmakers this week.

Walz said he is not aware of any federal investigations into the overpayments, and that he is in contact with the Centers of Medicare and Medicaid Services to arrange how the state will repay the dollars. He added that he wants to make sure the tribes are not held responsible for the state's mistakes, possibly through legislation.

"I certainly do not want to put the burden on them, and I think we need a way to make sure that happens," he said. "The tribes need to be held harmless in this."

Human Services Commissioner Jodi Harpstead on Wednesday said she hoped lawmakers would consider amending state law so that the department will not have to pursue repayment from the tribes. And she asked that they not hold tribal leaders accountable for direction handed down from the state.

Danielle Stevens, a behavioral health assistant director with the White Earth Nation, said the take-home, medication-assisted treatments have had a profound impact on the lives of hundreds of members who'd been able to stave off addictions. And she worried that the decrease in funding following the discovery of the overpayments, as well as the potential $29 million bill to the tribes, would limit opioid treatment programs.

"Throughout this process, it has been brought to light that DHS is to blame for the overpayments to both White Earth and Leech Lake Tribes. What hasn't been addressed is a lack of humanity that DHS is displaying," Stevens told the Senate Health and Human Services Committee. "The only focus has been on how the state wants the repayment, but the focus needs to be broader and encompass the potential modern-day problems we face with our drug abuse experienced by our people."

It remains unclear why the state's DHS, which administers Minnesota's Medicaid program, allowed the too-high reimbursement rates, and how the practice continued for years. Legislative Auditor Jim Nobles told state lawmakers on Tuesday "the dysfunction, the lack of controls were so egregious that you need to mandate (internal controls)."

“We don’t think it’s functioning properly when the Department of Human Services somewhere (at) some time, starts making payments that they do not have the authority to make,” Nobles told lawmakers on Wednesday.

Nobles said that based on his audit, DHS officials likely violated a state law that requires state employees to keep records of their decisionmaking and spending when they failed to document when the overpayments were initially approved and who approved them.

Lawmakers have expressed their frustration around the department's overpayments and lack of a control structure aimed at preventing them since the report was published Tuesday. And on Wednesday, Sen. Michelle Benson, R-Ham Lake, told DHS officials that they should not bury a request for the $29 million and they should undertake efforts to turn the department around.

"I'm glad that you are trying," Benson told Harpstead, "but if there are people in the department who aren't getting on board, it needs to be clear that change is coming."