NE Audit Uncovers Rule Violations; $8 Million Improperly Spent

April 10, 2013 — A statewide audit has found that the Nebraska Department of Health and Human Services (HHS), the LIHEAP grantee, violated its own internal LIHEAP plan and improperly spent nearly $8 million of its 2011 LIHEAP funds.

On April 1, the Nebraska Auditor issued the Statewide Single Audit, documenting how HHS violated its LIHEAP plan by improperly issuing almost $8 million in crisis assistance benefits out of the agency's 2011 LIHEAP allotment of $42 million.

HHS sent checks of $250 and $500 directly to 19,000 households in August 2011 that had previously qualified for crisis assistance. However, HHS' own plan required checks to be sent directly to utilities, not customers, to ensure the money went toward energy assistance. The audit discovered that some customers receiving checks weren't behind on their utility bills and, in some cases, had credits on their accounts. This was another violation of the state plan, which says crisis assistance shouldn't be authorized in amounts "greater than what is necessary to alleviate the crisis."

As the audit looked into what happened to some of the money, the results got even worse for HHS. A random examination of 135 payments found that checks were cashed at restaurants, grocery stores, funeral homes, paycheck-advance businesses, Wal-Mart, and a keno parlor. Auditors also uncovered 261 payments made to deceased persons for a total of $112,000. Even worse, HHS knew some of these recipients were deceased when it sent the checks.

The mistakes occurred as HHS hurried to distribute the funds before an October 1, 2011 deadline, after which time the money would have gone back to the federal government. HHS Director Kerry Winterer acknowledged that the department made mistakes.

"Where we have made mistakes, we will be accountable, we will take responsibility, and we will in fact own those mistakes," he told the press. "Most important, we will fix them. In this case, errors were made."

He said the administrators responsible for the problems no longer work for state government. Additionally, his agency has upgraded its internal tracking system, N-Focus, to confirm whether public benefit recipients are eligible for future energy assistance payments. Winterer said he does not believe the federal government will require a refund of the money.

Sources: Media reports and state auditor