State Auditor: Nebraska has 30 days to repay $22 million - News, Weather and Sports for Lincoln, NE;

State Auditor: Nebraska has 30 days to repay $22 million

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Posted By:  Bill Schammert

State Auditor Mike Foley says Nebraska has been given 30 days to repay nearly $22 million to the federal government because of the state's troubled effort to privatize child welfare services.

"The cost of the state foster care system is supposed be shared between the state and federal government," Foley said Wednesday. "Now the federal government is saying 'You're not handling our money correctly, so pay it back.'"   

The announcement came after the state auditor's office received two federal letters related to the Department of Health and Human Service's child welfare reform efforts. Some of the concerns related to how the use of federal aid was documented.

 Foley said Wednesday that Nebraska could face annual interest fees of more than 10 percent if the state fails to repay the money immediately.  He is also calling for a complete overhaul of the Department of Health and Human Services.

"This is an agency in turmoil. There are some good people over there for sure, but their senior management needs to be shaken up," he said.

The DHHS say sit has since corrected the problem with its child welfare services and issued the following statement: 

Kerry Winterer, CEO of the Department of Health and Human Services, said today the notification from the federal government regarding concerns with the way Nebraska documented use of federal foster care funds several years ago was expected.  He said DHHS resolved those issues beginning in 2012 and a disallowance should not occur again.

Winterer said the federal disallowance is in response to the design of the privatization of child welfare services several years ago, and the documentation for expenses that was provided to DHHS by the private agencies was not adequate.

"Children and Family Services Director Pristow, who was not involved in the decision to privatize child welfare services, has been working closely with federal officials for the past 12 to 18 months to fix this issue," Winterer said.  "That hard work has been recognized by federal officials and their confidence in us has, in part, resulted in the recent IV-E waiver that Nebraska was awarded."

 "We will decide in the near future our course of action," said Winterer.  "We believe we can provide information that will change the amount owed and we believe it will be considerably less."

The repayment demand was for nearly $7.9 million in fiscal year 2012 and $14.1 million in fiscal 2011. Foley says the fiscal 2013 audit is ongoing, and could lead to other questionable expenditures.


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