A day after launching his re-election bid for a third term, Minnesota Governor Tim Walz faced criticism over his administration’s handling of a housing program plagued by fraud. The Housing Stabilization Services program, funded by Medicaid and designed to help vulnerable populations secure housing, grew from $2.6 million in 2017 to $107 million by 2024 before being shut down amid “credible allegations of fraud.”

Shireen Gandhi, interim commissioner of the Department of Human Services (DHS), recently requested federal approval to terminate the program. DHS Inspector General James Clark told lawmakers that payments to 115 providers have been suspended, and the agency is adopting a more aggressive anti-fraud stance.

Critics, including Rep. Kristin Robbins (R-Maple Grove), chair of the House Fraud Prevention Committee and a gubernatorial candidate, argue the administration responded too late—only after investigative reporting by KARE 11. Robbins also criticized Walz’s new executive order establishing an Inspector General Coordinating Council, calling it a political distraction lacking independence.

Walz defended his record, citing recent reforms including expanded interagency data sharing and a newly appointed inspector general. He vowed zero tolerance for fraud, emphasizing that “abuse of taxpayer dollars takes resources away from those who need them most.”

Despite Walz’s efforts, Minnesota has seen multiple major fraud scandals in recent years, including the Feeding Our Future scheme and fraudulent Medicaid billing. The Housing Stabilization Services program is scheduled to end on October 20, pending federal approval.