December 1, 2011

Health officials pledge to make up for budget blunder on disabilities aid

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By Glynis Kazanjian and Len Lazarick
Glynis@marylandreporter.com

Health department officials testify at Senate hearing. From left: Inspector General Tom Russell, Secretary Joshua Sharfstein, Deputy Secretary Thomas Kim, DDA Director Frank Kirkland

Health department officials testify at Senate hearing. From left: Inspector General Tom Russell, Secretary Joshua Sharfstein, Deputy Secretary Thomas Kim, DDA Director Frank Kirkland.

Health Department officials told a Senate committee Wednesday the department would immediately begin to provide emergency assistance to those in the top tier of the Developmental Disabilities Administration waiting list.

The step is the first of four major steps outlined by the department to make up for a $34 $38 million budget blunder that left thousands on the DDA waiting list without services for a period of at least two years.

Department of Health and Mental Hygiene Secretary Joshua Sharfstein also said the Department would hire an outside auditor to conduct a forensic investigation of DDA’s internal accounting system. CORRECTION: The auditor will try to determine the causes of a major accounting failure that left $34 $38 million in community services funding unspent. Of that, $25 million had to be returned to the state general fund. (In Wednesday’s testimony, officials revised the amount of federal dollars left over from $12.6 down to $8.8 million that will be rolled over.)

“There is an underlying problem which is a profound weakness in DDA’s financial accounting system,” Sharfstein testified. “DDA has a unique accounting system in that it estimates payments in advance and then reconciles at the end of the year. The goal is to fix the DDA financial system.”

State officials including Sharfstein, DDA Director Frank Kirkland and Inspector General Tom Russell made a presentation to members of the Senate Finance and Budget and Taxation Committees.

The officials also addressed the same issues at a town hall meeting at a Severna Park church Wednesday evening that brought out 200 people representing caregivers, advocates and nonprofit agencies.

Uncertain timeframe for audit

Thomas Kim, deputy secretary for operations, said he did not know long the outside audit would take.

DHMH will also hire a consultant to evaluate DDA’s financial operations structure and determine if a new system if necessary.

The three additional steps in Sharfstein’s plan include:

° Addressing immediate needs within the DDA support services infrastructure, including acquiring equipment, transportation vehicles and items associated with information technology;

°Transitioning “care coordination” services so that they become eligible for federal funding matches, which could bring in $10 million more per year in federal funds.

°Hiring a consultant to develop federal waivers for services that are now funded by the state, which is expected to bring in an additional $5 million in federal funds per year.

The four initiatives are expected to cost the state $14 million. There was no estimate for the cost of the outside auditor and accounting consultant.

Sharfstein promised a diligent oversight process moving forward.

“This problem was identified by our staff,” Sharfstein told the senators. “We brought it to the inspector general. We’re coming forward and explaining what the problem is. We’re going to explain what our plan is and work with you to make this right.”

 

Health Secretary Joshua Sharfstein with mike, far right, address town hall meeting on DDA.

Health Secretary Joshua Sharfstein with mike, far right, address town hall meeting on DDA.

Town hall meeting

At the hearing and the later town hall meeting, Sharfstein said that even with the solutions he was proposing, there remained “an enormous gap between the needs of people with disabilities and the resources” the department had to help them.

Inspector General Tom Russell told the town hall meeting that DDA had an antiquated system for payments, much of it still done manually. “What $800 million corporation would prepay for services and then chase someone else for reimbursement?” he asked, referring to the federal match from the Medicaid program.

For more than two hours, the health officials took dozens of questions and comments from the audience, which generally praised the officials for being proactive in trying to solve the problem. Many offered suggestions for ways the agency could improve.

One board president of a nonprofit agency said the unspent money by DDA was making it more difficult to raise money from other sources.

Sharfstein said that Gov. Martin O’Malley was upset at the budget situation but “is very supportive of our efforts” to solve the problems at the agency.

The secretary said that while he was not positive that the $25 million would be given back to DDA, “I think we’re going to wind up with a lot more” by improving processes and changing programs that will provide more federal matching funds.

Richard Dean, a member of the board of the ARC of Maryland, said 30 members of the legislature had written to the governor asking him to restore the DDA funding. “We need to get the governor’s attention,” Dean said, urging him and the legislature to return the $25 million that went unspent.

  • Skip727

    And this “error” is the reason for the 9% tax on liquor? Will the citizens of Maryland be reimbursed for that boondoggle?

    • Secretservice633

      You’d be surprised what the alcohol tax is paying for via DDA. The money is now called services of short duration and is supposed to tend to the needs related to the persons disability. How will DDA explain paying for car insurance, TVs, cell phone, cars that arent specialty cars, and many, many other superflous goods and services?! Cant wait for the audit!!

  • PARTY

    NO ONE IN GOVERNMENT WOULD SHORT PEOPLE OF SPECIAL NEEDS UNLESS THE STATE OF MD NEEDED THE MONEY FOR BUDGET REASONS AND THERE HAPPEN TO BE A REPUBLICAN GOV, THEN YOU WOULD HEAR THE CRYING OF THE DEMS ABOUT HOW MEAN
    REPUBLICANS ARE..
    THE REAL SPECIAL NEEDS PEOPLE ARE THE EGOS THAT RUN OUR STATE, AND THEY NEED TO BE FIRED OR QUIT AND HAVE NO BENEFITS FOR TWO YEARS WHILE WE FIGURE IT ALL OUT.
    MIGHT AS WELL RAISE THAT 9% sales TAX SO THEY LIE SOME MORE .

  • Anonymous

    It is hard to reconcile the propaganda campaign promoted by certain special needs activists for the alcohol tax increase & the actions of the DDA in so bungling their budget servicing this population. That there isn’t more fury from the special needs community at this travesty is amazing. Another prime example of the “trust but verify” motto. What other departments in Annapolis need a thorough audit before we get another tax and/or fee increase to cover so-called ‘shortfalls”? And why, pray tell, do legislators have to request the governor’s premission to restore funds due to mistakes made by incompetent administrators? Sunshine is in short supply in Annapolis!

  • Little Johnnie D

    The good folks at DDA knew what they were doing all along. They just wanted to make sure they didn’t go over budget; if people with DD didn’t get funded this year… not their problem. Don’t be fooled by these pretend measures. As long as the current players remain in place, especially in Hagerstown (WMD), nothing will really change. DDA will still control the money, control the eligibility, and contract all the agencies that are supposed to act as advocates for those served by DDA. Someone needs to break up this model and start from scratch. The horrible people at DDA have shown over the last two decades that they do not have the moral or ethical depth to act objectively when trying to separate these conflicts of interest.