The DHS Debacle

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A cynic might say that Kevin Concannon, Maine’s former commissioner of the Department of Human Services, left for greener pastures just in time. Concannon, who is now the director of the Iowa Department of Human Services, was the man in charge for most of the time in which Maine’s DHS managed to lose track of $38.8 million in Medicaid funding prior to June 30 of this year.

That’s the amount Maine must replace, according to PricewaterhouseCoopers, a nationally known auditing firm hired to examine the department’s accounting practices when its fiscal problems came to light.

But the department’s shortfall is much larger than that. The Portland Press Herald reported last week that, according to some officials in Governor John Baldacci’s administration, the DHS may be as much as $150 million in the red.

Much of the responsibility for the problem is being placed on Rudolph Naples, a deputy commissioner in charge of the DHS management and budget office. Naples will retire Nov. 14 and Baldacci has named John Nicholas, who retired last year as head of the Bureau of the Budget, as his replacement.

According to the PricewaterhouseCoopers report, the $38.8-million Medicaid shortfall can be attributed to inadequate accounting processes and insufficient resources. The auditors cited a long list of mistakes including taking money from the wrong funds; failing to file Medicaid claims on time; wrongly using federal, rather than state, funds to pay certain bills; and spending funds that existed only on paper rather than as cash in hand.

Administration officials now believe that, as a result of faster-than-expected growth in Medicaid spending, the state will have to plug an additional $112 million hole in the current fiscal year budget, which began July 1. The Governor will submit a proposal for addressing that shortfall to the Legislature’s Appropriations Committee on Nov. 19. The next legislative session will begin in January.

Clearly, it is convenient to blame Naples for the fiscal problems of the DHS and somebody has to take the fall. According to the Portland Press Herald, the Governor’s spokesman, Lee Umphrey, acknowledged that Naples’ impending retirement is not entirely voluntary.

But as the late President Harry Truman said so succinctly, “The buck stops here.” And while Naples must share in the blame for the department’s sloppy bookkeeping, the ultimate responsibility lies with the commissioner, not his deputy.

Did Concannon see the writing on the wall? We’ll probably never know. He bailed out in March, and since then, the DHS has been without a commissioner. Baldacci says he hopes to nominate a new commissioner in January. The Governor also is hoping to convince the Legislature to merge the DHS and the Department of Behavioral and Developmental Services.

Such a merger would beg the question whether, in this case, bigger is better. According to the PricewaterhouseCoopers report, “The accounting processes in place at DHS are inadequate to handle the volume and complexity of the programs being administered, and DHS has insufficient resources to adequately manage fiscal operations.”

Does it make sense to further enlarge an already unwieldy bureaucracy without first being very sure that both the necessary expertise and resources have been found to correct existing problems? A $150-million shortfall is a serious matter. The Legislature—starting this month with the Appropriations Committee—must ask some tough questions and demand some straight answers.

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