Number crunching investigators have found a new $37 million hole at the Department of Human Services.

It’s a wonder the DHS has managed to pay any of its bills on time or even keep the checkbook balanced.

A month ago, accounting irregularities were discovered in the welfare system. The newest disclosure concerns MaineCare, the state’s version of Medicaid.

Gov. John Baldacci brought in an outside auditing firm to go over DHS’s books. Investigators have found plenty of problems, chief among them a lack of oversight, faulty training procedures and understaffing.

According to Baldacci and the auditors, there’s no evidence that any crime has been committed. In the past, we’ve said that was a lucky break, but perhaps it would be easier to prosecute criminal activity than to completely overhaul a state agency rife with serious, systematic problems.

Here’s what the auditors found: The state inappropriately shifted $17.5 million in health care payments to the federal government; paid almost $8 million for mental health services beyond federal limits; lost just more than $3 million because it failed to file reimbursement claims; and about $8.5 million worth of mistakes are so old they can’t really be pinpointed. Luckily, the audit also found about $5 million that the state may still be able to collect from the feds.

The missing $37 million brings the total for accounting difficulties at DHS to about $68 million.

Former Gov. Angus King – who served in Augusta from 1995 until January when Baldacci took over and on whose watch many of the accounting problems occurred – said that while the situation at DHS is serious, it’s important to remember that $37 million is less than half of one percent of Maine’s total Medicaid spending over his eight years in office. That’s cold comfort along the lines of “it could have been worse.”

Baldacci inherited the problems with DHS, but he has rightly taken responsibility for the shortcomings of the department under his authority. He also has outlined plans to address the financial problems affecting the agency.

On Tuesday, Baldacci said he would seek a supplemental appropriation next year to fund an increase in oversight staff, including accountants, streamline practices and improve training. Reforms need to happen quickly. Plans to merge DHS with the Department of Behavioral and Developmental Services should be accelerated and a new era of professionalism should begin for state agencies.

The governor has made himself accountable to voters for the problems at DHS. Now he needs to hold accountable the state employees who allowed this nightmare of bad math and disregard for the rules to become institutionalized.

After the mess at DHS is resolved, it would be a good idea to begin a review process of all state agencies. Until we look closely, it’s impossible to know just how far the state’s accounting difficulties extend.
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