Scathing audit accuses DHHS director of ‘nepotism’

| May 14, 2015

imagesby Jason DeBruyn, Triangle Business Journal, May 13, 2015.

The former director of the state office that manages Medicaid claims payments abused her authority by employing friends and family members who were not qualified for their positions, gave unjustified pay raises and logged unjustified overtime, according to a state audit released Wednesday morning.

A news release obtained by the Triangle Business Journal that was issued by the Department of Health and Human Services during the time the audit investigated shows the name of the former director as Angie Sligh.

The audit determined the abuses “wasted at least $1.6 million through excessive wages and commissions, unjustified overtime, and holiday pay to temporary employees over three fiscal years,” according to the audit.

In a 17-page response, DHHS Secretary Aldona Wos disagreed with many of the audit’s findings, including that she thinks auditors overstated the estimate that $1.6 million was wasted. “DHHS disagrees with some of the inferences and conclusions contained within this draft report,” Wos wrote. “DHHS believes the attempt, in several situations in OSA’s (Office of State Auditor’s) draft report, to apply inapplicable standards and policies, results in a flawed analysis of some of the important and valuable findings of OSA’s investigators.”

The audit looked at the Office of Medicaid Management Information Systems Services (OMMISS), which is under the N.C. Department of Health and Human Services. DHHS oversees the state’s $13 billion Medicaid system and recently switched to a new computer system to pay the more than 70,000 approved Medicaid providers in North Carolina. The new system is called NCTracks, and has been the subject of scathing audits as well.

This audit, however, looks specifically at the office that administers NCTracks. During the process of switching to NCTracks, DHHS employed a combination of permanent, temporary and contract employees. The department used several private temporary staffing agencies in Wake County to hire temporary employees for the project.

From July 1, 2011, through June 30, 2014, auditors determined OMMISS wasted at least $1.667 million, including:

  • $807,741 to temporary employees at rates that exceeded their qualifications;
  • $598,673 to temporary staffing agencies for commissions that exceeded the rates charged by the state-operated temporary staffing service;
  • $234,724 to employees for unjustified overtime; and
  • $26,026 for holiday pay to ineligible employees.

“The OMMISS Director’s abuse of her authority through the hiring process caused these excessive costs,” according to auditors, who added that the director “engaged in or allowed nepotism by employing at least 11 separate groups of family members, including her family members and employing at least 15 individuals with personal connections to her.”

As part of her response, Wos acknowledges some mistakes, but points out that poor polices and procedures across all state government contributed to overruns.

“Your investigation brought to the attention of the current management of DHHS an issue that appears to have existed across state government for a number of years – the lack of appropriate safeguards and procedures required of state agencies for the selection and compensation of temporary workers from private temporary staffing agencies.” Wos wrote. “While DHHS is not responsible for the development of a statewide policy regarding temporary workers, in response to the longstanding issues identified by your investigation, DHHS has undertaken the development of a DHHS internal policy to eliminate the type of long-standing issues identified in your draft report.”

Specifically, DHHS reviewed the compensation of certain temporary workers identified in the audit. In cases where DHHS could not determine that compensation was appropriate, the agency terminated the worker.

The audit goes into specific detail on temporary employees and what compensation they received. Wos, in return, details several policies and goes into detail why she disagrees with the audit’s findings.

The investigation required 1,728 hours at an approximate cost of $162,432.

Category: Healthcare, SPIN Blog

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