Corrective Action After Agency Leaves $25M Unspent
ANNAPOLIS, Md. (AP) -- After Maryland's Developmental Disabilities Administration had to give more than $25 million in unspent state funds back to the general fund, the health secretary told lawmakers he's acting to correct the situation.
Health Secretary Joshua Sharfstein told members of the Senate Finance and Budget and Taxation committees he was shocked to hear of such a large expected surplus at the agency that supports services such as residential care, employment, day programs and respite care through a federal Medicaid waiver and state-only funding.
"I didn't believe it at first," said Sharfstein, who was appointed in January. He called for a review to confirm the report and find out what was happening at DDA, which has a budget of $800 million and about 6,700 people on the waiting list for services.
Compared to the size of the unmet need for services, he later acknowledged that the $25 million amount was huge.
Inspector General Thomas Russell said he didn't uncover fraud at the agency. However, he said he did find an "antiquated payment system where much is still done by hand."
Russell noted that weaknesses in communication between offices and in DDA's accounting system likely masked the underspending. Unlike other agencies, DDA estimates payments and reconciles them at year's end. Russell questioned DDA's process for determining expenses that could be charged back to the prior fiscal year to avoid a surplus.
Russell said he got the sense that workers were overwhelmed and the agency didn't have the resources or the personnel with fiscal savvy to keep up.
DDA has a new chief financial officer and Sharfstein said the department will hire a consultant to help restructure DDA's financial operations. He said a forensic auditor will take a look back to get a sense of how long the problem has existed.
He also told the committee about four steps being taken to help individuals and providers this fiscal year, including an effort to provide $10,000 one-time assistance for people at risk of a crisis.
The expansion of that effort to include everyone on the crisis prevention waiting list, which has about 1,100 people on it, is expected to cost $7 million this year.
A parallel $6 million initiative will help providers with urgent needs for equipment or information technology. Officials will seek a federal match through Medicaid. A third $1 million effort will provide extra support for care coordination to ease a transition of this grant-funded service to a billable approach to bring in a federal match that could be worth $10 million in additional federal funds annually.
Sharfstein also plans to hire a consultant to develop a waiver that would allow Maryland to get a federal match on funding for a wide range of services now funded through state money alone. He said that could be worth $5 million annually.
(Copyright 2011 by The Associated Press. All Rights Reserved.)
