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Health and Welfare audit results disappointing

This last week I participated in the annual Summer Interim Tour for members of the Joint Finance and Appropriations Committee (JFAC). The tour allows the committee members an opportunity to view agency projects and to receive information on programs the committee has funded in previous legislative sessions.

We also receive a general fund budget update during the tour from legislative services’ staff members. This year the news is good. As I indicated in my last article, May revenues exceeded expectations and anticipated fiscal year 2004 year-end results were expected to be favorable. This was reinforced by information we received this last week.

We expect to finish fiscal year 2004 with a positive balance of $72,509,000, which will be carried forward into fiscal year 2005. The budget for FY 2005 that we set in this year’s legislative session authorizes a total appropriation of $2,082,138,300. We anticipate total revenues of $2,136,668,100, including the $72,509,000 carried forward from this year. This leaves us with a FY 2005 balance at the end of June 2005 of $54,529,800. The 1 percent increase in sales tax sunsets in June of 2005 and because of this, these year end balances that we expect to carry over into the succeeding years are important if we are to meet our FY 2006 needs after the expiration of the 1 percent sales tax increase.

During the course of the year the Legislative Services Office performs audits of the individual agencies to determine their financial performance. During the tour the office presented the JFAC members the results of their audit of the Department of Health and Welfare.

Those results were disappointing to the JFAC members. There were nine issues of concern expressed in the audit including problems in administering the federal food stamp program, oversight of a contract awarded to the University of Idaho by the Department for implementation of the Nutrition Education program, and implementation of the CHIP insurance program for children.

Problems in the food stamp program implementation included a high payment error rate and inadequate recovery of overpayments. Federal regulations require states to limit the number of errors in determining food stamp benefits and eligibility. Errors are identified as either over- or under-payments. The maximum error rate set by the federal government was 8.26 percent for fiscal year 2002 and is estimated at 6.6 percent for 2003. The Department’s error rate is in excess of 15 percent and will probably result in reduced federal payments to the Department. Idaho could receive up to $700,000 more in federal payments if the Department could lower their error rate from 15.4 percent to 5 percent.

The Department had a balance of almost $1.7 million in overpayments at the end of June 2003. It was noted that the Department is not pursuing all available options to collect these overpayments and the auditors made a recommendation that the Department study all options allowed by federal regulations for recovery of overpayments. Some of the options however, could require new legislative authority before the Department could do as the federal government allows.

The food stamp program also provides for state implementation of a Nutrition Education Program. The Department contracted with the University of Idaho to implement this program. The total budget for the program was $1,462,000 for fiscal year 2003. The University provided the required 50 percent matching funds. The Department, however, performed no monitoring of the program to ensure the University met program requirements. In addition, the source of matching funds provided by the University was not identified and leaves a question of whether or not the University is subsidizing the Nutrition Education Program. Department personnel attending the JFAC meeting did not know the dollar amount of the contract between the University and the Department, but promised to get that information to the members of JFAC. In response to an additional request by the Committee, the Department will also identify the source of the matching funds provided by the University.

During fiscal year 2001 an audit of the Department found that 25 percent of children enrolled in the “CHIP” insurance program did not meet all eligibility requirements. The Department had initiated corrective action to reduce the percentage of error; however, errors in determining eligibility were found in the 2003 audit at almost the same rate as 2001. Total benefits paid for fiscal year 2003 were approximately $16 million, $3 million of which was paid to provide services to ineligible clients.

As stated previously, the audit findings were disappointing to the JFAC members, so much so that the co-chairs of the committee established a sub-committee to pursue the audit findings in more depth and provide recommendations to help the Department improve its performance.

The Department of Health and Welfare is the second highest general fund budget item and to the degree that dollars are not spent as required, it increases the Department’s costs and even more importantly, limits dollars available to help those who are eligible for assistance but may not be getting it because of errors in program implementation by the Department.

The JFAC summer tour is a tightly scheduled three-day tour, but the information gained is extremely helpful as we consider appropriation requests by the various agencies during the legislative session. It provides members of the committee a better understanding of how programs are implemented and how the dollars are spent.

Thanks for reading and as always, please feel free to contact me anytime with issues of concern. My home phone is 208-265-0123 and my mailing address is P.O. Box 112, Dover, 83825.

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Rep. George Eskridge Rep. George Eskridge the Republican Representative for District 1 in Idaho’s House, George Eskridge can be reached at 208-265-0123 or write PO Box 112, Dover, ID 83825

Tagged as:

budget, JFAC, Department of Health and Welfare, audit

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