AUBURN – State Auditor Neria Douglass says she told state officials that accounting problems plague many more programs at the Department of Health and Human Services than just MaineCare.

Douglass, a former state senator, recently completed an audit of all state departments that get federal money to make sure that money was used property. If her office is unable to account for all funds, hundreds of federal grants earmarked for those state agencies could be jeopardized, she said.

Douglass’ audit for the fiscal year ending June 30, 2004, revealed 81 possible problems, 49 of them at DHHS. Moreover, of the $18.7 million total spending flagged by her auditors as questionable, $17.9 million was linked to DHHS programs, which get the lion’s share of federal funding.

Spending within the foster care program at DHHS raised the largest flag at $12.4 million, she said.

Just because her office has questioned figures at that department doesn’t mean any of that money is missing, Douglass explained. In some cases, it may have been misappropriated. In some cases, poor bookkeeping may account for the query. In other cases, federal money earmarked for different programs might have been mistakenly commingled.

Overall, Douglass said the dollar amounts as well as the types of problems identified point to structural failings within DHHS, affecting many of its programs.

Although greatest concern surrounds billing problems at MaineCare – Maine’s Medicaid program – state officials should be addressing chronically poor accounting practices for other programs within the department, she said.

Gov. John Baldacci announced last week he hired a business consultant to completely overhaul MaineCare, prompted by faulty billings by that agency’s new computer system.

“I applaud the governor for doing that,” Douglass said. “Frankly, we need to address these issues throughout the department. … I want to see some systematic change.”

Douglass met recently with Baldacci, DHHS Commissioner Jack Nicholas and Department of Administrative and Financial Services Becky Wyke to put them on notice.

“We said, ‘Here’s where your problems are. Get started to get these fixed.'”

Shortly after taking office, Baldacci called in an accounting consultant to untangle a web of misappropriations totaling millions of dollars in the Temporary Assistance for Needy Families agency at DHHS. Those problems had been raised by then-State Auditor Gail Chase in her annual report.

Nicholas acknowledged problems at his department, but noted that they are being addressed.

He was appointed commissioner just three months before the end of the fiscal year covered in Douglass’ audit, he said.

The amount of money questioned by auditors shrank nearly in half, from more than $30 million in 2003 to just under $18 million last year.

In addition, the number of questions raised by auditors also dropped, from 67 to 49, last year.

“We’d like it if we had zero findings,” he said. But given the short period of time he had as department head to correct the problems, that wasn’t possible. He expects to improve on that further in fiscal year 2005.

Nicholas said he is in the process of re-centralizing his department after years of splintering of DHHS programs. That should provide for greater financial oversight, he said.

“I think there has been very substantial financial improvement,” he said.



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