Who better to point out that state government’s largest agency lacks adequate financial controls than the person who ran it for the last eight years? Kevin Concannon, former commissioner of the Department of Human Services now serving in an equivalent post in Iowa, observed recently, “There’s no question that there has to be stronger and tighter controls” on the way DHS handles money. No doubt true, but that’s not the end of it.

Auditor Gail Chase has pointed out problems in the department before and while Mr. Concannon disputes the severity of her warnings, it’s clear enough that part of the planned overhaul for the department must also include more significant resources for tracking money.

A recent report by the state auditor concludes DHS improperly documented or misspent about $32 million during the last fiscal year, up considerably from an initial estimate of about $19 million. More disturbing, however, is the way the money was said to be mishandled – not through poor record keeping on a couple of large accounts but numerous mistakes in numerous areas of disbursing federal money. For instance, voucher records were found to be inadequate, payments were made to the wrong people, excess federal money was transferred to another account, excess payroll costs charged to the food stamp program, other program disbursements weren’t monitored and some of the reporting to the federal government was inaccurate.

The former commissioner notes that the federal auditors reviewed the books regularly and saw nothing amiss and that the system he left is much improved over what he found when he became commissioner in 1995, when shoe boxes full of child-support checks sat for weeks before being sent out.

But part of the current difficulty can be traced to the commissioner and the King administration, with the support of the Legislature.

All wanted Maine to leverage as many federal dollars as possible, and the state became among the most aggressive at looking for ways to get Washington to pay for programs here. Being inventive with Medicaid dollars, however, comes at a price – Maine’s resources devoted to following the money had to rise with the state’s interest in obtaining it. By most accounts, it did not and an overworked department could not keep up.

Of course, there may be more to this and it may be that not everything the auditor has reported is correct. But now that the Baldacci administration has decided, properly, to merge DHAS and the Department of Developmental and Behavioral Services, lawmakers have an ideal time to study how other Maine departments and other states’ human-services agencies organize their bookkeeping and find a better system than what DHS has now.

Gov. Baldacci has said he will be even more active in drawing federal money for programs. The problems currently at DHS should be sufficient warning to see that the price of that money is increased oversight.