Closing DHS’ Books

Forced to solve a years’-long problem in a couple of months, the Baldacci administration this week put client care above just balancing its budget to escape a $113 million shortfall at the Department of Human Services. The Legislature can help end this unfortunate episode by offering amendments to the plan without shows of high dudgeon and prepare to fix the department’s budget in January.

Briefly, DHS was off by $28 million on hospital payments, made numerous mistakes, detailed earlier by PriceWaterhouseCoopers, worth $38 million and did not properly anticipate increased costs for services nor the increased use of those services. Some of these problems accumulated over several years, some can be attributed the current administration. But more important than who is to blame is what is to be done, and on this the Baldacci administration has made good decisions since these problems surfaced months ago.

The governor has, for instance, ordered a thorough investigation of the agency’s books. He has increased the staff in DHS’ bookkeeping office. And he has provided new oversight to the agency in the hiring of John Nicholas, who served as Maine’s state budget officer from 1992 to 2002 and will begin Monday in his new role as deputy DHS commissioner with responsibility for budget planning and accounting. The seriousness with which the administration has taken the problem could be seen Wednesday, in testimony before the Legislature’s Appropriations Committee. Though its suggestions for making up the shortfall are not without a bit of guesswork, they are a realistic means for getting DHS back to a balanced budget.

They include increased federal fiscal relief, which was initiated by Sen. Susan Collins to provide Medicaid support generally. The governor has asked all departments to cut a total of $21 million and will use a year-end savings and a slight upward reprojection in the budget to help pay for part of the problem. And he has asked the federal government for further help to let Maine recover some welfare money it should have received a few years ago but did not properly draw down. That fund alone could remove $30 million of the problem.

It is important to keep in mind, however, that these changes do not alter the fact that, while DHS had accounting problems, it also has an ongoing, structural gap between demand for services and funding that must be closed by creating a more effective and accountable system of services. Providing this through a planned merger with the Department of Behavioral and Developmental Services should force the administration to ask basic questions about what services Maine needs, in what order of priority does it need them and how can they be best delivered.

Understandably, Maine doesn’t have a lot of faith in DHS right now and this is felt among its staff, though it wasn’t, for instance, the caseworkers who were at fault. Caseworkers do, however, rely on their credibility to do their jobs. That credibility has been hurt. Lawmakers can either help them restore it by working diligently and cooperatively to conclude this episode, or they can add to the damage DHS has done to itself by dragging out the issue for political gain.

The Baldacci administration has done a good job investigating, airing and recommending solutions to this problem. The next steps it and the Legislature make will be even more difficult.