The audit findings, the company’s contract demands and the competitive selection each provide grounds to choose a different provider.
For more than 35 years, I have run a software company serving large enterprise and mid-market customers. Those customers expect us to document our work, submit accurate invoices and substantiate the expenses we charge them. If we cannot explain a bill, we should expect it to be challenged. If the problems persist, we should expect to lose the business.
Those expectations came to mind as I read Minneapolis’ audit of its Behavioral Crisis Response program and the reporting about Canopy Roots, the company contracted to operate it.
I support the administration’s decision to select a different provider. The documented billing and recordkeeping deficiencies are sufficient grounds to decline another contract. Canopy’s attempt to condition a temporary extension on receiving the next contract gives me a separate reason to reach the same conclusion.
The City Council’s decision to reject the proposed replacement and authorize another extension with Canopy deserves scrutiny of its own.
The City Auditor’s report describes problems that would concern anyone responsible for paying a company’s bills.
Across 13 invoices, three dollar amounts repeatedly appeared in charges for crisis responders even though the reported staffing and hours changed. One recurring charge of $182,197 appeared alongside reported hours ranging from 2,587 to 7,738. The invoices did not explain whether the charges reflected the work performed.
Auditors examined nine invoices totaling approximately $3.46 million. The payroll registers supplied covered only part of the billing period for six invoices and none of the billing period for the other three. Those registers showed what employees were paid, but did not establish the hours they worked on the City’s program. Auditors could not obtain timecards or daily time records for BCR operations during the audit.
They also did not receive supporting documentation for $317,289 in program expenses across those invoices, including legal, insurance, office space and consulting costs.
These were identified documentation and oversight failures, not findings of fraud or established overbilling. They nevertheless leave a basic business question unanswered: How does the customer verify that the charges are justified?
For me, that is sufficient reason to question whether the company should receive another substantial public contract.
The City bears considerable responsibility. Its contract lacked measurable performance targets. Oversight moved between departments. The Fire Department inherited serious deficiencies and made improvements, but still lacked consistent invoice review and independent spending controls.
City officials should answer for those failures. They should also correct them before another provider takes over.
But Canopy had responsibilities of its own. The audit identifies existing contract provisions requiring the company to retain source documents and internal controls supporting its charges, allow the City to examine its records, and submit detailed, itemized invoices.
A service business needs reliable records to manage its employees, understand its costs and bill its customers. Those processes should exist whether the customer watches closely or barely watches at all.
The email reported by KARE 11 raises another concern.
In April, the City sought an extension that would keep services operating through the end of 2026 while it completed the selection of a provider for the next contract. According to KARE’s reporting, Canopy responded that it could continue during that period only if selected for the contract beginning in January 2027.
The City rejected that condition. Canopy eventually withdrew it and signed the extension. The company characterized the exchange as normal contract negotiation.
My company has been in the same position: providing services while a customer decides who will receive the next contract. We would never condition transitional service on winning that business. If a vendor tried that with me, I would not do business with it again.
Price, staffing and the length of an extension are appropriate subjects for negotiation. Tying that extension to the award of a separate contract uses the customer’s need for continuity to pressure its selection decision. Here, that continuity involved people who depend on help during a mental health crisis.
Withdrawing the condition allowed services to continue. It did not erase the judgment involved in proposing it.
Then there is the competitive process itself.
Canopy applied for the new contract. Staff selected Community Bridges, an organization operating crisis-response services in other states, for a broader mobile crisis response program. The proposed approach would expand the range of calls and place greater emphasis on continuing support after the immediate crisis.
The Council was entitled to examine that recommendation. Staff should explain their evaluation and demonstrate how the new provider would be ready to serve Minneapolis. A competitive process does not make a recommendation immune from questions.
But Canopy’s role in building the program does not establish that it deserves the next contract. Neither does praise for its responders answer the concerns about the company’s business practices.
Those responders may have done valuable, difficult work. Their contributions can be recognized while concluding that the company employing them has not demonstrated the management standards required for another award.
Council members also raised legitimate concerns about a January transition. Residents should not lose access to crisis response because City officials mishandle a change in providers. The administration needs a credible staffing and implementation plan, with contingency coverage if the incoming provider falls behind. A limited extension may be necessary to complete that work safely.
That is a practical transition question. It does not, by itself, justify allowing the existing arrangement to continue for up to another 18 months.
People experiencing a mental health crisis deserve dependable care. Taxpayers deserve to know what their money purchases. Delivering both requires a provider that can document its work and a City government willing to enforce its standards.
I would expect my own company to meet those standards.
Canopy Roots failed to meet basic business standards—and in doing so, failed the City of Minneapolis.
