By Deena Winter | Nebraska Watchdog
Updated 2:10 p.m.
LINCOLN – Nebraska’s state auditor accused state health officials of failing to promptly ask for federal reimbursement dollars, costing Nebraska taxpayers $1.8 million.
State Auditor Mike Foley said the “glaring errors” were discovered when his audit team examined an adoption assistance program managed by the Nebraska Department of Health and Human Services, which is headed up by Kerry Winterer. Auditors discovered the department wrote off $1.8 million in grants from 1996 to 2006 that could have been collected from the feds, according to the audit report released Tuesday. The bulk of the money was for adoption assistance.
“For five whole years, the federal money was literally there for the asking,” Foley said in a press release. “All the state needed to do was to file a timely request for reimbursement. As a result, the citizens of Nebraska paid the price for those glaring errors, this time to the tune of roughly $2 million.”
DHHS’s response was that the items go back several years and the department had recorded them as receivables for a number of years with the intent to research if the money was “truly due” to the state. The department said it implemented policies this year to ensure federal reimbursements are sought in a timely manner, and in the process “came to the understanding” that amounts outstanding for more than five years were no longer collectible so those were written off.
While DHHS attributed some of the omissions to clerical errors, Foley said the auditors dug deeper and found the problem to be “a far more serious one that has been occurring for years.” Foley said nobody at DHHS could explain why they failed to initiate the process of claiming reimbursement.
The state auditor also accused DHHS of intentionally delaying auditors’ access to information for almost five months, which the report called “unreasonable under any circumstances.” Auditors said it took 134 days to gain access to the DHHS document storage computer system.
The audit also said DHHS was more than two months late in submitting its accounts receivable and payables, delaying auditors by up to 46 days.
DHHS responded by saying the state auditor’s request for access to “every type of transaction” in its computer system – including employee performance evaluations, background checks and charitable donations – is not consistent with government accounting standards. The department said it didn’t stop auditors from completing their work on the annual financial report on time.
Russ Reno, spokesman for DHHS, said his department first reported the unclaimed federal money as part of the 2012 Comprehensive Annual Financial Report and at the time put a process in place to reduce the likelihood this would happen again. He said $116 million in federal money was awarded for those programs in the eight-year period in question, and $114.2 million were claimed. He said some dollars that weren’t claimed may not have been allowed by the feds.
“DHHS in no way minimizes the possible loss of any federal dollars,” Reno said. “It is our commitment to be good stewards of taxpayers’ funds.”
Since 2009, the department has placed more emphasis on accounting and finance and now uses a more efficient, effective accounting system and created an internal audit position to review the department, according to Reno.
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