Auditor General Finds High Eligibility Error Rates At D.H.S.

By:  Benjamin A. Schock, Attorney at Law

Despite implementation of a process to catch errors, a high eligibility error rate for certain assistance programs at the Department of Human Services (DHS) led the Auditor General to maintain that a material condition still exists, according to a follow-up report issued Thursday by Auditor General Thomas McTavish.

In 2008, the initial report found a material condition and made two recommendations regarding the client eligibility oversight, error identification and error prevention processes for some public assistance programs at DHS.  The specific programs that were audited included the Family Independence Program (FIP), Child Development and Care Program (CDC) and the Medical Assistance Program (Medicaid).

The audit recommended DHS develop and implement a process to identify and correct errors for FIP and the CDC program to improve payment accuracy and concluded that the department had partially complied. It said a material condition still exists because of the eligibility error rates that continued.

Audits showed that the error rates got worse from 2008 to 2010 for two of the programs.

The CDC error rates went from 36 percent in 2008 to 72 percent two years later. FIP error rates were 60 percent in 2008 and 77 percent in 2010.  DHS disagreed that it only partially complied with the first recommendation, saying it believed it had implemented a robust case reading requirement for its offices dealing with client eligibility.  The department pointed to an audit for the first three months of 2011 that showed the error rates for the CDC program dropped to 29 percent – an indication the controls it put in place are working.

The auditor general’s office acknowledged the improvement, but said errors still at that high of a level indicate DHS’s internal controls were ineffective in preventing, detecting or correcting eligibility determinations on a timely basis. Joshua Larsen, director of the office of monitoring and internal controls, said DHS was dinged in the 2008 audit not for having a high error rate, but because it didn’t have a process in place to catch errors. “We feel we have a very stringent process in place now,” Mr. Larsen said.  Mr. Larsen said the department took the 2008 audit seriously and the process in place now is having a positive effect.

DHS spokesperson Dave Akerly also said that what could constitute an error varies, and can include someone simply leaving a date or a signature off an application. “Not all errors are created alike,” Mr. Akerly said.