DHS’ DISAPPEARING DOLLARS

Another study, another $30 million plus missing from the Department of Human Services. The further the Baldacci administration looks into the bookkeeping at DHS, the worse the situation looks. Yesterday the governor announced a “funding deficit” of $37 million in the department’s Medicaid account between fiscal year 1996 and the end of 2002. This deficit demands that the administration push up the timeline for the overhaul of DHS and consider asking the Attorney General’s Office to investigate.

The missing Medicaid money comes just a month after PriceWaterhouseCoopers concluded that DHS had misplaced $31 million in welfare money. (Coincidentally enough, PWC found three deficient areas within Temporary Assistance to Needy Families also amounting to $37 million and including about $6 million in federal dollars for which the state had been eligible.). PWC also did the Medicaid review, and in both cases concluded a lack of staff and lack of training contributed to the problems. The pattern being established in these reviews requires Gov. Baldacci to go further to determine whether criminal activity is being hidden by these significant and improper shifts of money.

At an announcement yesterday, the governor attributed the absent Medicaid money to missed payments over the last seven years, improper payments to psychiatric hospitals, losing a grant for failure to identify costs in time and “miscellaneous non-claimable costs,” which equals a hefty $8.5 million of the total. DHS handles a lot of money and its staff shortages are now well known, but the department is rapidly approaching the point when it loses the confidence of the Legislature and the public. How much more money might be missing and how likely is it that any review going back over the years will track it all down?

The Baldacci administration is now accustomed to having to explain what steps it will take to improve fiscal responsibility at DHS. It offered such a plan yesterday that increases oversight, adds personnel, establishes templates for accounts and insists on a faster reconciliation of accounts. It is hard to argue with any of it except to wonder why substantial errors were necessary before the actions were proposed.

The administration is correct to pursue these problems aggressively, but the public should expect to see equally aggressive reforms to put an end to this pattern of failed accounting.