She warned DHS about fraud risks years ago. Now this Minnesota state worker is speaking up again.
She warned DHS about fraud risks years ago. Now this Minnesota state worker is speaking up again.
A longtime employee at Minnesota’s Department of Human Services (DHS), who blew the whistle on DHS’s oversight of taxpayer money, is renewing those concerns as the state’s largest agency grapples with an unprecedented crisis.
Allegations of widespread fraud in multiple state Medicaid programs are driving state and federal investigations, as well as proposed reforms at the legislature.
“I would love to just say ‘I told you so!’” said Faye Bernstein in a rare, on-camera interview with 5 INVESTIGATES.
Seven years ago, Bernstein says she identified “risky” practices in how DHS’s Behavioral Health division handled grant contracts for mental health and substance use disorder treatment.
“I was not aware at that time of any actual fraud, but I was concerned about the risk,” she said. “It was the kind of practices that we wouldn’t want to be doing, because it would allow fraud in.”
Bernstein said she took her concerns up the chain of command, speaking with multiple people about the issues she was seeing. She said nothing improved.
“What really struck me was the attitude of leadership when I would bring it up,” Bernstein said. “There always seemed to be a reason why it was better to just look the other way.”
In July 2019, her frustrations hit a fever pitch. Bernstein wrote a two-page email detailing her experience to 133 fellow DHS employees.
Hours later, she said she was escorted out of the building. The following day, she received a letter from HR notifying her that she was under investigation.
“I was reprimanded for not doing work, which was correct,” Bernstein said. “Completely agree. I was not going to do these contracts that shouldn’t be done.”
A DHS spokesperson confirmed Bernstein was issued a formal discipline letter for employee misconduct.
Bernstein went back to work but did not stay silent.
A month after she was walked off DHS property, she sat before a Senate committee hearing, warning lawmakers about contract issues and detailing the retaliation she felt she experienced after she spoke up.
“What I was pointing out, originally, was quite routine and it was simply my job,” Bernstein testified.
She returned to the State Capitol last month to testify again, this time in front of the House Fraud Prevention and State Agency Oversight Policy Committee.
During that committee meeting, Program Integrity Director Tim O’Malley presented lawmakers with his more than 50-page report on the roadmap to combatting fraud in state programs.
“Minnesota’s fraud vulnerabilities have existed for decades,” O’Malley wrote. “A ‘too trusting mindset’ and a system biased toward facilitating payments — rather than safeguarding funds — contributed to creating opportunities for exploitation.”
The document also laid out a framework for how to shift culture, a criticism Bernstein leveled against current leaders in the department.
“I don’t see how we can escape it, unless there is mass firings up above,” she said.
In a recent interview with 5 EYEWITNESS NEWS anchor Kevin Doran, DHS Commissioner Shireen Gandhi addressed criticism that the agency ignored whistleblowers who complained about fraud or raised red flags.
“I get very upset when I hear that people feel they are being ignored,” she said. “That is not okay. I know people feel that way, and I know some people feel they’ve been retaliated against. And I would say that if you don’t feel comfortable coming to us, please report to the Bureau of Criminal Apprehension, report to the OLA. What’s most important is that we get the information so we can act on it, because we don’t want this continuing to happen.”
DHS said they are seeing a steady increase in the number of employees reporting issues to the department’s compliance hotline.
“In 2024, only eight reports came in from employees. In 2025, we had 42 employees report concerns; and nine reports from employees in the first quarter of 2026,” wrote an agency spokesperson in an email.
Bernstein said she is speaking out once again to bring attention to issues that she feels were overlooked a decade ago and to encourage others within the agency to come forward.
“I’m going to keep talking about it because if you’re going to blow the whistle, you might as well blow it really, really loud,” she said.
Are you a current or former state employee with a similar experience? Investigative reporter Kirsten Swanson wants to talk. You can reach her at [email protected].
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