Audit finds $669,522 oversight DHHS must reimburse feds for overpayments

AUGUSTA – The Inspector General of the federal Department of Health and Human Services has found that Maine did not follow federal law for recovering welfare overpayments between 2001 and 2005.

Maine DHHS does not dispute the finding, discovered through a federal audit, and says the problem has now been fixed. The state must reimburse the federal government $669,522.

“We determined that during our audit period Maine had collected $786,037 in overpayments from former [welfare] recipients,” the audit stated. “Although Maine had procedures for identifying and reimbursing the Federal share of overpayments made to former AFDC recipients, it did not always follow these procedures. In addition, its computer system was unable to identify the amount of AFDC overpayments.”

The Aid to Families with Dependent Children program was the basic welfare program until it was replaced with TANF, the Temporary Assistance for Needy Families program, a few years ago. AFDC was a joint federal-state funded program while TANF is a federal block grant to the states. Maine failed to follow federal procedures for both AFDC and TANF, according to the feds.

The latest audit was a follow-up to a 2001 audit where Maine and the other New England states were required to repay more than $13 million to the federal government for the same reasons cited in this new audit – not adequately accounting for the overpayments.

Maine’s payment to the feds in 2001 was $762,138. As a result of this audit, Maine is paying the feds $497,719 for the period of April 1, 2001 to March 31, 2005 and an additional $171,803 for the period of April 1, 2005 to September 30, 2006.

The audit report put most of the blame for the errors on the DHHS computer system, saying state officials made that assessment themselves.

“Maine officials attribute the delay in returning the Federal share of these overpayment collections to numerous patches in its integrated computer system that prevented the State from identifying the amount of AFDC overpayments owed the Federal Government,” the audit stated.

The IG report made a specific recommendation that the state computer system be fixed, and state officials said they are adopting the recommendations of the audit.

“Maine completely agrees with OIG’s (Office of Inspector General) calculation of the amount of money it must reimburse the U.S. Department of Health and Human Services for its portion of Maine’s collections of AFDC overpayments,” Barbara VanBurgel, Director of the Office of Integrated Access and Support, wrote in a letter to the OIG dated November 30, 2006.

Maine Deputy DHHS Commissioner Sabra Burdick said the state would be making the payment soon and it will be paid within existing resources. She said there are always overpayments to recipients for a number of reasons and the state now has the controls in place to make sure the recovered funds are properly accounted for.

“I am not going to say the computer has been fixed but the system has been fixed so we can separate the amounts,” she said. “We do workarounds, but I hate to say that.”

Burdick said there always have been payment errors in the welfare programs across the country and she believes there will always be errors.

“For example, a person may leave the household and we may not find out until the check has been sent,” she said. “That becomes an overpayment. That does not mean the person did not report it; they just didn’t report it in a timely manner.”

Burdick said another common reason for overpayments occurs when a person receiving benefits goes to work and the pay stub is not received for a few weeks by the state, so the payment is higher than it should have been and requires a repayment plan.

“We get a lot of this money back through recoupment in the ongoing checks,” she said.

For example, Burdick said, if a person is overpaid $500, that individual’s check may be reduced by $100 a month for five months to recoup the overpayment. She said with payments of about $78 million a year, the errors cited by the inspector general are relatively small.

As for the concern that the department computer system is not doing an adequate job tracking the payments, Burdick is confident the problems cited by the feds have been fixed.

“Yes, I think we have the problems fixed, “She said.