AUGUSTA – The federal Department of Health and Human Services’ inspector general has found that Maine’s DHHS did not follow federal law for recovering welfare overpayments between 2001 and 2005.

The state did not dispute the audit.

“We determined that during our audit period Maine had collected $786,037 in overpayments from former AFDC 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 the Temporary Assistance for Needy Families program a decade ago. AFDC was a joint federal-state-funded welfare program, while TANF is a federal block grant to the states.

This 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 the new audit: not adequately accounting for the overpayments.

Maine’s payment in 2001 was $762,138. As a result of the 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 Sept. 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.

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 Nov. 30.

Maine Deputy DHHS Commissioner Sabra Burdick said the state would be making the payment soon and it will be paid with 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,” she said.