The backstory is bizarre ... officials claim the Mississippi Dept. of Human Services handed out $98 MILLION in welfare funds to 2 non-profit orgs., which were supposed to use the money to help the poor.

Instead, officials say several crooked people in those groups spent MILLIONS on things like concert tickets, football games, lobbyists and more.

Officials say $1.1 million was paid to Favre to deliver speeches in 2017 and 2018 -- but Favre never actually performed.

Auditors flagged the payments -- and although he has not been accused of any wrongdoing, Brett is speaking out to explain his side of the story.

"My agent is often approached by different products and brands for me to appear in one way or another. This request was no different, and I did numerous ads for Families First," Favre said.

"I have never received monies for obligations I didn't meet. To reiterate Auditors White's statement, I was unaware that the money being dispersed was paid for out of funds not intended for that purpose, and because of that I am refunding the full amount back to Mississippi."

"I have spent my entire career helping children through Favre 4 Hope donating nearly $10 million to underserved and underprivileged children in Mississippi and Wisconsin."

"It has brought a ton of joy to my life, and I would certainly never do anything to take away from the children I have fought to help! I love Mississippi and I would never knowingly do anything to take away from those that need it most."

Officials have confirmed Favre has already repaid $500,000 -- and plans to return the remaining $600,000 in various installments.

"I want to applaud Mr. Favre for his good faith effort to make this right and make the taxpayers and TANF families whole,'' Auditor Shad White said in a statement Wednesday.