A state audit harshly criticizes the Department of Health and Human Services for its efforts to move the state to a privatized child welfare system.
State Auditor Mike Foley has outlined the findings of his office before the legislative Health and Human Services committee, findings which criticize the department’s spending, its lack of documentation and its failure to seek public bids for service contracts. Foley tells the committee the department has failed to provide any documentation on how it spent $7 million on six different providers to implement the Families Matter reform.
“We repeatedly asked DHHS for any background, supporting documentation on how that $7 million figure was arrived at,” Foley testifies. “Not a scrap of paper, not an email, not a note, nothing was provided to use to support the $7million expenditure.”
Foley says child welfare costs have jumped 27% since 2009 when Families Matter reform was implemented, growing from $107.7 million in 2009 to $136.5 million in 2011.
The state auditor says the DHHS couldn’t provide his auditors with documentation to justify $25 million in amendments to various contracts.
“Again, not a scrap of paper was provided to us,” according to Foley. “How is it possible that a state agency could initiate $25 million in additional spending and nobody has any notes? Nobody has any emails. No documentation could be provided to the auditors.”
Foley contends that DHHS overpaid one service provider, Visinet, by $3.9 million. The audit claims the department made payments to Visinet for 76 days during which the company provided no services. Foley adds that DHHS failed to seek public bids for providers.
DHHS failed to monitor subcontractors, according to the audit. One sub-contractor, says Foley, hired uncredentialed workers.
“These are people they hired from Taco Bell and Wal-Mart,” according to Foley. “They’re paying them $10 to $12 an hour and then they are billing the state of Nebraska $47 an hour for services that they are not credentialed to provide.”
The Department of Health and Human Services has released a statement, refuting the audit conclusions. DHHS acknowledges the cost of providing child welfare services has increased, but believes the amounts being paid to contractors are “necessary and reasonable.” DHHS says it has implemented additional oversight measures.
DHHS will begin to make random reviews of contractors and subcontractors finances. “If DHHS receives credible concerns about a specific provider, the matter will be reviewed and appropriate actions will be taken.”
Click here for Executive Summary of audit.
Click here for DHHS response to audit.