Outgoing Juvenile Services Secretary Donald DeVore told the Legislature’s Joint Audit Committee Tuesday that when he received the findings of a scathing audit that exposed a host of large problems with record-keeping, financial management, contracts, monitoring and personnel in his department, he didn’t get defensive.
Instead, DeVore said, he got to work.
“I convened weekly meetings with my staff to see that every issue was rectified by the 21st of November,” DeVore said. “We are in fact correcting the problems they identified, and we wanted to make sure the measures we were taking were the correct ones.”
At Tuesday’s hearing, Legislative Auditor Bruce Myers said that Juvenile Services staff has met with the audit team and had a continuing dialogue to ensure that things in the department get fixed.
The audit report, released in October, detailed several oversight and administrative problems in the way that the department was run. About $3 million in federal Medicaid funds that had been due to the state were lost. Treatment funds were not recovered. About $148 million in contracts did not get the proper approval, millions in other contracts were overpaid, and ineligible employees got overtime pay or were paid twice.
DeVore, who is resigning his post when Gov. Martin O’Malley’s second term begins in January, said that he took the audit very seriously, and wanted to address each finding. The Medicaid funds that were left on the table mostly came because necessary evaluations of young people in residential rehabilitation services were not done, he said. New processes and employees are in place in order to do future comprehensive analysis of juveniles in the system.
He told the committee that in fiscal 2010, the department collected about $3.3 million from Medicaid.
House Chairman Steven DeBoy Sr., D-Baltimore County, wanted to be sure that the money would continue to come back to the state.
“Can you really assure us that you have the people in place to go after these federal dollars?” DeBoy asked.
DeVore said he did.
The $171 million of old and unapproved contracts that auditors had discovered — which were retroactively passed by the Board of Public Works last month — are something else that DeVore said will not happen again. The department now has an automated tracking system, which he said will ensure that a master list of contracts and potential vendors are complete.
Committee members were glad to hear of the changes and DeVore’s attitude toward the audit. Since funds are shrinking throughout the state, Sen. Catherine Pugh, D-Baltimore City, asked if the audit issues may have been the result of fewer staff members.
“We are clearly challenged by that,” DeVore said. “We have had to rearrange the chairs several times to make sure we can cover our bases.”
Committee members also heard about the audit of the Department of Health and Mental Hygiene’s Medical Care Programs Administration, which was released Monday. The division, which handled $6.8 billion in health care programs last year, had widespread problems with record-keeping, which could lead to millions of dollars in wasted funds. Myers said that improving controls anywhere in the division could bring quite significant savings, since so much money flows through it.
Health and Mental Hygiene Secretary John Colmers said that the largest problem identified in the audit dealt with an outdated memorandum of understanding that divides responsibility for determining eligibility for medical assistance programs between the medical programs agency and the Department of Human Resources. The MOU limits which department can do what, and auditors’ top recommendation was for the agreement to be modernized.
Colmers said that they are already looking at changing how eligibility is done, but not only because of the audit. The new federal health care law makes several changes to Medicaid, including making it much simpler to determine if a person is eligible.
“The point of all of this is that health reform is requiring us to re-examine our relationship to DHR, and DHR’s relationship to us, in terms of eligibility,” Colmers said.
Several members of the committee said they were concerned about the audit’s revelation that inmates are doing some of the department’s data processing — including inputting recipients’ Social Security numbers into databases. Colmers said that the inmates who are doing that job are working full days doing data entry with nothing to write on, and it would be relatively difficult for one of them to remember a single Social Security number to commit identity theft. He said inmates have done this job since 2003, and he has never heard of any problems.
“I hear what you are saying, but I am not convinced,” said Del. Charles Barkley, D-Montgomery.
Several other committee members urged Colmers to rethink the policy and see if any other departments give inmates access to the same kind of sensitive data.