The Legislature established the Department of Public Welfare in 1937, consolidating state welfare activities. The Department was responsible for the administration of all forms of public assistance, including general relief programs and supervision of institutions caring for the dependent, delinquent, or mentally or physically handicapped. In 1971 the Department of Public Welfare was abolished and its functions assumed by the newly created Department of Social and Rehabilitation Services (SRS). The SRS assumed the functions of various state agencies, including functions pertaining to vocational rehabilitation and education; the Commission on Aging; and the Council on Human Resources. The SRS administered all forms of public assistance, child protection, and child welfare; gave consultant service to private institutions providing care for the needy, indigent, handicapped, or dependent; developed provisions for services to the blind; supervised county boards of public welfare; and administered all funds allotted for public welfare activities. State government reorganization in 1995 combined the SRS with portions of the Department of Health and Environmental Sciences to form the Department of Public Health and Human Services.

It was the duty of the Audit and Program Compliance division to ensure that assistance programs like Medicaid, Food Stamps, Aid to Families with Dependent Children (AFDC), and others were being properly utilized and implemented in Montana.