State audit reveals chronic waste in state agencies

From North Cascades Broadcasting News - komw.net/news

By Associated Press
Mar 25, 2004, 12:37

Olympia, WA - A state audit report released Wednesday indicated that state agencies paid $84,000 in unemployment benefits to prison inmates, spent $73,000 on medical care for people who were already dead, and cannot account for $5.8 million in recorded payments by employers into the state's worker's compensation system.

Several of the findings were similar to problems found during previous annual audits of state agencies.

Marsha Richards, a spokeswoman for the Evergreen Freedom Foundation, a conservative group in Olympia said, "What this clearly shows is that we have some repeat offenders in this state. Richards said, "It's not OK to go around wasting taxpayer dollars, and state officials should get serious about making sure those dollars are spent appropriately."

State Auditor Brian Sonntag's "Accountability Report" covered spending during the 2003 fiscal year. The 263-page report lists 60 problems found at 18 state agencies.

Among the findings were:

The Department of Fish and Wildlife spent $5.8 million in federal money to buy thousands of acres of land or easements without the approval of the governor or Legislature. According to the audit report, the agency spent more than it was supposed to, then pulled the money from other, similar federal grants. Among the purchases was land along salmon streams in the Methow watershed.

Responding to the finding, the agency wrote that the problem resulted from poor communication between staffers. Shifting the purchases to other federal money, the agency said, "was seen as a technical adjustment and was not intended to deceive."

The Department of Social and Health Services' Mental Health Division didn't properly monitor a $165,000 contract with the Washington chapter of the National Alliance for the Mentally Ill.

It was later discovered that a National Alliance for the Mentally Ill staffer had issued and cashed unauthorized checks totaling more than $147,000, apparently for her personal expenses. State officials don't know whether the misappropriated money came from the state grant, but the Mental Health Division said it's trying to get the $165,000 back.

The Department of Employment Security paid at least $221,677 in unemployment benefits to people who weren't eligible. Of those, 15 people were incarcerated, and 92 others gave Social Security numbers that were either fake or belonged to dead people.

Michael Wilson, a spokesman for the department said, "Most of these cases occurred before we put in a cross-match system" for social security numbers. He said, the system, set up in 2002, has caused a dramatic drop in the number of false Social Security numbers. And, Wilson said, the department is working on a better way to track who is in prison.

More than $5.8 million in recorded employer payments for the state worker's compensation system "were not reflected as being deposited" in the fund.

The state Department of Labor and Industries collects more than $1 billion a year from more than 166,000 Washington businesses. The money funds an industrial insurance system that pays for treatment and compensation of injured workers.

Between July 2002 and December 2002, the agency recorded payments of $542,630,733 from employers. But only $536,794,568 was deposited in the bank.

"Neither our staff nor Department personnel were able to determine what caused the difference," auditors said in their report.

Among the possibilities: minor timing errors or misclassified payments may have skewed the numbers. Or transactions may have been improperly recorded as payments. The auditors said, part of the problem is that the agency didn't at the time do a daily reconciliation between payments and deposits.

The agency is adamant that the money isn't missing, and said it now reconciles its balances daily, and has improved other processes to ensure that all money is properly accounted for.

The Department of Social and Health Services' Medical Assistance Administration apparently paid for $73,415 in medical care for people who were already dead. Under the Medicaid program, the agency pays for things like nursing home stays, hospitalization and drugs.

The problem, auditors said, is that the agency is largely dependent on health-care providers or a family to report when a Medicaid client dies. Some of the money has since been recovered from the providers.


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