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Published on December 12th, 2012 | by Len Lazarick

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Disabilities agency now ‘in the red’ after underspending for years.

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

Health Secretary Joshua Sharfstein with mike, far right, addresses town hall meeting on DDA in December 2011.

By Len Lazarick
Len@MarylandReporter.com

Maryland Health Secretary Joshua Sharfstein told a town hall meeting in Columbia Tuesday night that the troubled Developmental Disabilities Administration has made significant progress since discovering $34 million in unspent funds last year.

“It looks like we’re in the red” by $4 million or $5 million for the fiscal year that ended June 30, “which is a good thing for this agency,” Sharfstein said, “but we don’t know yet.”

The $876 million agency provides services to 25,000 people with developmental disabilities, some needing round-the-clock care, but “it has the fiscal infrastructure of a very small agency,” Sharfstein said. So even though the books have closed, health officials still don’t have a firm dollar figure on what the agency actually spent.

Since audits disclosed chronic under-spending at the agency, about 300 more people have been taken off the waiting list of 7,000, and another 1,200 received short-term care. The length of time to assess people on the waiting list has been reduced from a year to three months, Sharfstein said.

New agency head, old problems

Although the DDA has a new head and a new chief financial officer since the budget problems were discovered by top health officials, the problems raised by audience members who questioned Sharfstein for 90 minutes were hardly new. They included low pay for the workers who actually assist the disabled – an average of $10 per hour – and slow pay by the agency for services that have been provided.

“Providers are failing out here,” said Kate Rollason, executive director of the ARC of the Central Chesapeake. “We can’t get staff.”

Providers also have difficulty providing their low-paid workers with health insurance, especially with new federal mandates looming.

David Wamsley, executive director of Emerge in Columbia, said the DDA owes his organization $1.4 million. “The department could accidentally put us out of business,” Wamsley said.

“We have a broken financial system,” Sharfstein conceded. “We’re trying to get a state-of-the-art system,” but that hasn’t happened yet.

After the meeting, Del. Guy Guzzone, House chair of the Joint Audit Committee who has long been personally involved with disability issues, said that “the good news now is that it is heading in the right direction.”

People served by the DDA range from those with mild intellectual disabilities who can be employed to people so severely disabled that they can do little to care for themselves.

The current budget talks in Washington on solving the deficit could also have an impact on the agency and those it serves. About 40% of the DDA’s budget comes from federal funds and the Medicaid program.

“The long term fiscal threats are health care costs,” Sharfstein said. There has been much talk about the need to cut Medicaid expenses, but “cutting Medicaid is cutting developmental disabilities.”

“We’ll see how that plays out,” said Sharfstein.

Related stories from last year: “Agency left $38 million unspent on disabled people needing care,” “Caregivers are angry over unspent disabilities funding” and “Health officials pledge to make up for blunder on disabilities aid.”

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  • abby_adams

    Am I reading this story incorrectly, but this agency head “thinks” it is 4 to 5 M$ in the red? Yet this agency still has unpaid vendors & providers unable to keep employees because of lower wages & Obamacare mandates coming? While I’m glad more people are receiving the help promised, how can we continue to fund this agency at a higher level without raising taxes since the supposed $$ from the alcohol taxes are not being used to help them? Where is the transparency in MD government? IMHO it’s MIA!

  • hungrypirana

    Dr. Sharfstein is quoted to say “We have a broken financial system,” and “We’re trying to get a state-of-the-art system.”

    In order to fairly evaluate Dr. Sharfstein’s statement (he doesn’t know if DDA is $4 or $5 million “in the red”) one must know that the reliability of DDA’s accounting is largely dependent on the reliability of its providers’ data. DDA has an extensive network of providers that come in all shapes and sizes, some are small; others large, some providers are non-profits others are for profit. Some providers have good accountants, others not so much. All provider entities are required to report final expenditures and service-hour data (used for Federal reimbursement) on Excel spreadsheets to DDA on December 1. I repeat: December 1. After that, DDA accountants must compile those reports, enter amounts manually into DDA’s accounting system, calculate Federal reimbursement levels, and enter them into DDA’s accounting system. Thereafter DDA’s data are subject to numerous reconciliation steps and audit. This process is outdated and inherently risky (subject to error.)

    Comments attributed to Dr. Sharfstein may lead readers to believe DDA’s accountability is substandard. I don’t think that’s a fair conclusion because his Town Hall meeting was held just a few days after this year’s provider reports were due.

    When Dr. Sarfstein cites a state-of-the-art accounting system I assume he is referring to a system that his providers can directly enter their data, and eliminate manual entry now done within DDA. Such a system, while costly, should greatly help DDA’s accountabilty.

  • Paddy

    When it’s not your money it’s fine to be in the red. IT’S OUR MONEY and you are spending it faster than we are giving it to you. Shortfalls are NEVER good. Socialists…

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