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      State Auditor Says DHHS Accounting Lapse Cost Taxpayers Over $1.8 Million

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      State AuditorMike Foley has issued an audit management letter to the Nebraska Department ofHealth and Human Services citing the failure of DHHS simply to ask for federal reimbursement funds owed to the state in a timely manner – thus costingNebraska taxpayers over $1.8 million.

      The issue came to light when Foley's audit team examined the accounting for anadoption assistance program managed by DHHS. It was found that DHHS paidfor those program expenses and then failed to seek $656,489 in federalreimbursement funds during the five-year grace period for doing so.

      Realizing that Nebraska taxpayers had been short-changed by what DHHS called a"clerical error," the auditors dug deeper and discovered the problem to be afar more serious one that has been occurring for years.

      As of June 30, 2012, DHHS failed to collect $1,821,941 in Federal receivablefunds relating to child welfare and protection – all of which should have beencollected by the state from the federal government.

      Federal law allows aState agency five years after the period of availability in which to request federal funds for certain program expenditures incurred by the state. Byfailing to make such a request for federal reimbursement during theconsiderable time allotted, DHHS missed the opportunity for the federalfunds. Consequently, program costs were pushed onto Nebraska taxpayers.

      The failure of DHHS to pursue almost two million dollars in available federalfunds resulted in child welfare and protection costs being paid for insteadwith state tax dollars, which could have been used for some other purpose.

      The breakdown of the funds lost by DHHS was:

      Grant Year

      Grant Program

      Amount Lost

      1996

      Child Support Enforcement

      $46,230

      1998

      Adoption Assistance

      76,096

      1999

      Adoption Assistance

      417,194

      2001

      Child Support Enforcement

      27,140

      2002

      Foster Care Title IV-E

      210,713

      2003

      Foster Care Title IV-E

      243,919

      2004

      Adoption Assistance

      123,419

      2006

      Adoption Assistance

      656,489

      2006

      State Survey and Certification of Health Care Providers

      20,741

      Total Federal Funds Lost

      $1,821,941

      To clarify, DHHS spent the $1,821,941 and did not properly seek thereimbursement monies the state was entitled to from the Federalgovernment. Aside from placing partial blame on an alleged "clericalerror," nobody at DHHS could explain the agency's failure to initiate, atany time during the long five-year grace period, the process of claiming theavailable federal funds.

      According to Foley, "For five whole years, the federal money was literallythere for the asking. All the state needed to do was to file a timelyrequest for reimbursement. As a result, the citizens of Nebraska paid theprice for those glaring errors – this time to the tune of roughly two milliondollars."

      Courtesy- State Auditor Mike Foley

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