Agency left $38 million unspent on disabled people needing care

By Len Lazarick

Man in wheelchair pecks out words on computer to communicate.

Disabilities advocate Ken Capone uses a computer on his wheelchair to type in words so he can communicate.

The beleaguered Developmental Disabilities Administration, with thousands on its waiting list for care, left $25 million in state funding unspent over the last two years, and wound up having to return the money to the state’s general fund.

The agency also had a $12 million surplus in its federal Medicaid match, meaning there was a total $38 million left over.

The surpluses had apparently been going on for some time, leaving millions in the kitty that were supposed to be spent on people with some of the most severe physical and mental disabilities, many unable to care for themselves.

“It’s really unconscionable,” said Frank Kirkland, who took over as DDA’s director in August. He said that he and the top brass at the Department of Health and Mental Hygiene were upset, and launched an investigation, which is continuing, about how the money went unspent, apparently accumulating over several years, and hidden from auditors.

The agency serves about 21,000 people with a budget of $830 million, including $488 million from the state.

“We’ve also made changes in financial management,” Kirkland said. He would not say if anyone got fired.
“We’ve made needed changes,” he said.

“This is money that could have gone to services and that’s unconscionable,” said Kirkland, who has held similar positions in New Jersey and West Virginia. He said he’s already met with members of the Maryland Developmental Disabilities Council, who were upset about the funding problems “and they should be.”

Money could have gone to services

“It was horrifying to learn the news,” said Laura Howell, executive director of the Maryland Association of Community Services and chair of the Maryland Developmental Disabilities Coalition. “People with developmental disabilities depend on the state for critically important services and those services have been underfunded for many years,”

“To learn that funds were unspent in light of that underfunding was just devastating to both people who receive services and their families and the agencies that support them,” she said.

After years of lobbying by advocates for more funding from higher alcohol taxes, the DDA will get a $15 million boost in fiscal 2013 from the new 9% sales tax in July, far less than the amount the agency couldn’t find a way to spend in previous years.

“We had no idea that this mismanagement was taking place,” said Nancy Pineles, developmental disabilities managing attorney for the Maryland Disability Law Center. “What’s very hard to swallow is that at the same time that the services were underfunded, we were advocating our support for the alcohol tax.”

“It’s incredible,” said Sen. Edward J. Kasemeyer, chairman of the Budget and Taxation Committee who’s taken a particular interest in the developmentally disabled. “In an agency dying for money, this level of incompetency — it’s terrible.”

Kasemeyer, D-Howard and Baltimore counties, and the others said Health Secretary Joshua Sharfstein and Kirkland helped defuse the anger at the situation by calling them and meeting with them to tell them what was going on.

“Thankfully, I have a lot of faith in Sharfstein,” Kasemeyer said. “I trust him.”

“After he called me, he fired the [chief financial officer],” the senator said.

Kasemeyer said that his committee and the Finance Committee, which has jurisdiction over health issues, would likely have a joint hearing on DDA at the end of the month. Finance Chairman Thomas Mac Middleton said that after all the attention the legislature was giving to disabilities, “your first impression is you’re outraged,” but “you want to hear from both sides.”

Kate Fialkowski of The ARC of Maryland noted that the Maryland ranks 43rd in the nation in spending on services for people with developmental disabilities.

“Current funding is woefully insufficient,” Fialkowski said. “Insufficient funding means that people can’t get out of bed, can’t leave their homes, and there are people who are living in situations of crisis. With such a pervasive and pent-up need, obviously we are outraged that under-spending could happen.”

Discovered in closing books

Dr. Joshua Sharfstein

Dr. Joshua Sharfstein

According to letters sent to legislative leaders in late October by Warren Deschenaux, the legislature’s policy chief, and a response to that letter by Sharfstein, the unexpected surpluses came to light as the agency was closing out its books in July for fiscal 2011.

Sharfstein wrote: “When we learned of this abrupt change, the department: 1. Assigned new individuals to review the finances of DDA; 2. Requested an investigation by our office of inspector general; and 3. Attempted to hold on to as much of the surplus as possible as possible to provide services to individuals with developmental disabilities.”

Sharfstein said the surplus resulted from inappropriately charging fiscal 2011 expenses to fiscal 2010. When the department reversed this bookkeeping maneuver, fiscal 2010 then showed a surplus, which had to revert back to the state. The federal surplus could be rolled over.

“The underlying problem appears to relate to challenges in the budgeting and payment process in the DDA program, dating back several years,” Sharfstein wrote. “We are hiring new fiscal personnel, reassessing our current budget process, and developing a plan for an upgraded accounting system.”

Sharfstein promised Senate President Thomas V. Mike Miller and House Speaker Michael Busch that he would provide quarterly updates until the matter is resolved.

According to Deschenaux’s letter, “DDA created improper purchase orders in the state’s accounting system to avoid reverting funds to the state’s general fund. This practice violated the yearly closing instructions” from the comptroller’s office “since this spending did not qualify as a valid encumbrance.”

DDA management problems

Management problems are not new at the DDA.

Legislative auditors two years ago issued a scathing report saying DDA failed to seek $3 million in federal reimbursement it was due, and also overpaid care providers $3.6 million.

Among 14 findings, the state Office of Legislative Audits said the agency paid contractors for services to dead people, failed to properly monitor clients who lost their Medicaid eligibility, reported inaccurate information about waiting lists to the General Assembly and did not have adequate security for its information systems.

In January of this year, DDA Director Michael Chapman, appointed in 2007, was asked to resign, according to a department spokesperson. Kirkland replaced him in August.’s Glynis Kazanjian contributed to this story.

About The Author

Len Lazarick

Len Lazarick was the founding editor and publisher of and is currently the president of its nonprofit corporation and chairman of its board He was formerly the State House bureau chief of the daily Baltimore Examiner from its start in April 2006 to its demise in February 2009. He was a copy editor on the national desk of the Washington Post for eight years before that, and has spent decades covering Maryland politics and government.


  1. Terry Harrigan

    This is outrageous, sad and unconscionable. My wife and I provide services for our disabled adult daughter because no placement is available. Our daily lives have been affected for more than 27 years. There are 7,000 others out there in the state in similar situations. If the state cannot provide care for the truely incapable why are they our representatives?!

  2. Twilkes

    It’s time to clean house at every level of government.  They do not serve the people–only their pocketbooks. 

  3. GUEST

    This is disturbing on SO MANY levels!!! Not only does someone need to be held accountable for this injustice but the unspent money needs to be returned to the people it was intended for, NOW!  
    What did our elected officials do with the surplus?  

  4. Sherie Robey

    Nine years ago, my sister, who is 67 had to come live with my husband and myself, as our last parent past away. When she was 17, the state of Maryland sent our parents a letter stating, ” we have to inform you that  she can not return to school as we are not able to provide classes due t her disablitiy”.
     I understand FAPE, but come on… no services.  My sister only received SSDI after our father passed away 27 years ago, and nothing else.  Our mother had no knowledge about resources, resource co-ordination, DORS, DDA, respite…. NOTHING.  My husband and I have been on the gerbil wheel ourselves with waiting list after waiting list.  We finally tapped into some funding through DORS for employable training. At 58, our sister  learned that she could work part time.  Guess Where?  Home Depot  12 hrs a week! This is can be attributed to n agency, but to my husband and myself. However, there is not enough money for her to live independently, nor collect food stamps or even Medical Assistance.I have been told tho that if I was not a “nice” sister, she may move higher on the list. What does that mean? I have to put her out to maybe qualify, We have even been told that she needs to stay on the waiting list so that the funds are allocated.  WOW – go figure, they have been allocated and no one cared enough to properly do their job to assist those that need a voice, and advocates.  Instead, it took advantage of the “nice” folks.  Maybe the state should take the money, divide it among those that are on the lists; start over, and make it right. My sister was told a year ago that DORS would provide a service so that ARC could train my sister; nothing happened – then we received a letter that said basically, congratulations we helped.  What a slap in our face, to the hard work of my husband, myself and of course my sister..  When I inquired as to where the allocated funds went, no answer, but yet another letter that said… oh well now we will provide post employment follow up services.  have not seen that either.  Who is getting that money?  My guess is none of the politicians, and other decision makers know what it is like to be in our shoes as caregivers or disabled!   Otherwise they would be the trustworthy, voice for the folks that need it the most ~ the disabled and their caregivers. Any other louder advocates out there?  Is this dscrimination for the disabled?

  5. raymond britt

    Since federal and state governments were not financially guarding the hen house (this agencies spending), it also makes me wonder how the accounting practices are in special education are also.  Same old stuff, “We don’t have the money”, but state coffers continue to have up to 30% of IDEA monies in their coffers for the month of December.  Simple accounting is — assets – liabilities = Net Worth.  When the director continues to have lots more money in their financial account than they should, something is amiss.  Just downright idiotic for these disabled people to have gone through what they did, and probably why 15 businesses within the state had to go out of business.

  6. Sandra Spears - Parent

    This is unconscionable!!! We will determine that this does not happen again!! This is the time for the Disability Advocacy community to rise up and be heard and whoever is responsible to held be criminally responsible for the lives and families that are in DESPERAT NEED of the services and supports this money was to provide!!!

    Can the money be retrieved or is it just gone???, due to somebody’s mistake, or according to this, OVER A PERIOD OF YEARS, THIS MONEY WAS HIDDEN FROM AUDITORS???? WHO IS RESPONSIBLE???? WAS MONEY STOLEN OR JUST SET ASIDE TO GIVE BACK TO THE FEDERAL GOVERNMENT??



    • P Martin

      Can the money be retrieved? good question-one for Senator Kasemeyer at phone: 410-841-3653 or 1-800800-492-7122 (toll free). E-mail:

      • raymond britt


        This is a very good question.  My question is, Has anyone been held accountable for this injustice to disabled people?  If answer is no, why not?

  7. Anonymous

    Where are the cries from those in the media & Annapolis who advocated for the higher alcohol tax to cover the lack of funding for the developmentally disabled? Were those advocates sold a bill of goods, like the rest of the tax paying public? $38 million unspent in state coffers while the propaganda campaign raged on? Another example of the Democratic controlled state government crying wolf at the front door without checking what was going out the back door. This agency as well as others should be subject to independent audits before demanding another penny from taxpayers.

    If they were so callous as to shortchange these vulnerable citizens, how can we trust ANYTHING that comes out of their mouths?

  8. Maxine Hamilton

    We’re dumbfounded!  To think parents of children and adults with developmental disabilities have been told over and over again that there’s not enough money to help them get the services they so desperately need while money was languishing in state coffers is beyond belief!  We have providers who are closing their doors, shrinking programs, and tightening their belts to get through this crisis, and all the time millions went unspent that could have provided the community services we have pleaded for.  

    We call on all of our state legislators to demand that this situation be corrected ASAP.     

  9. Suzanne Stevenson

    My daughter lives in a group home but I can tell you right now that the money would make a huge difference in the quality of care that she is receiving. The home is severly understaffed because funds were not available to hire the staff ratio needed.  Every resident in my daughter’s house has missed doctors appointments, had health issues that were not addressed in a timely manner and suffered because of it. My daughter needs to have a staff member to get her to appointments.  I have been doing this for her but as my husbands health deteriorates I am not going to be able to continue taking all the time it has required of me to get her the health care she needs. This is the agency’s responsibility but without funding for staff and without funding to maintain the wheelchair acessible van we can not keep participants in these programs healthy. 

    • raymond britt


      I do not live in Maryland, however, as an advocate for special education children, and all that is going on in special education (very bad stuff), this is just outrageous for this to happen in today’s computerized world.  Someone was not doing their job to have allowed this to happen, while disabled people suffer.  I would believe that something likes this may be going on in special education throughout our nation as well, because at present many states have 30% remaining in December (almost) which in some states amounts to $56,000,000.00.  A Travesty of justice by this agency and to the victims of disability of this state.  This appears the wave of what’s happening in America today.  So, so, sorry for your daughter as well as to all those that suffered so greatly.  Sgt Raymond L. Britt, USMC.  OAMAAM

  10. Oldemill72

    This is an outrage!  People who cannot speak for themselves and who rely on tax payers money which is allotted to agencies for their needs, have a right to receive that money that will help with their care and help those who care for them.  Whoever benefitted from the undespending and redirection of these funds should be made to care for the developmentally disabled people they stole from.  The needs of the DD are diverse and costly and many are cared for by aging parents who sometimes die before their child, leaving the child alone and unable to care for itself.  Caregivers could be found for this work by offering them a wage that would sustain them and by providing services to those who are on the interminal waiting list.  The evil that this information reports speaks to man’s inhumanity to man and to the unfathonable depths that man will go in the name of greed.  This gross inequity toward the most vunerable of our state is unforgiveable and the governor should be held accountable as well.    The  develomentally disabled are  left with only their suffering and need.   

  11. koreas24

    This situation should come as no surprise to anyone who has tried to work in this field for past 2 decades.  Local providers, who provide services for a fraction of the cost of institutions, have spent untold numbers of hours fighting to save their budgets let alone increase them for decades.  State direct care workers have historically been paid double or more per hour than local providers were budgeted for to do the same jobs in a more famiyl/commnity oriented setting while strapped with regulations that nevre applied to the state run institutions. Check on the number of provider agencies that closed in the past 15 years because they could not continue to operate with the DDA funding they received–funding the providers were told “wasn’t there”.  Service Coordination took 50% funding cuts in the middle of the fiscal year that the $25 million was unused.  I could go on…and on…

  12. Disgusted Parent

    As the parent of a Developmentally Disabled child I am very disappointed to read this article.  My child’s status at a non-public school is currently in question because the school system does not have enough funding.  If these people cared anything about the individuals they have been charged to serve, at the very least they would make sure the funds were distributed to agencies that would certainly utilize them.  The system is definitely broken and unfortunately a number of people, my son included, will have to suffer before they can get the situation fixed.  Bravo to Sen. Kasemeyer for at least making a statement and giving this particular problem his attention!

  13. PARTY




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