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Wednesday, May 19, 2010

Audit finds refugees got care benefits

CONCORD – The state improperly gave refugees cash or health insurance benefits that the individuals were not entitled to but underpaid to compensate for housing costs, according to a critical audit of the state Office of Energy and Planning.

The audit, released Tuesday, blamed the problem on a lack of worker training and understanding of state law.

“Lack of effective training and oversight of the New Hampshire Department of Health and Human Services employees responsible for the determination of client eligibility and disbursement of refugee cash and medical benefits resulted in benefits being paid to ineligible clients during fiscal year 2009,” the audit concluded.

About 300-400 refugees a year come to New Hampshire having had to flee home countries for fear of persecution because of race, religion, nationality, political opinion or membership in a social group.

Two nonprofit groups, Lutheran Social Services of New Hampshire and the International Institute of New Hampshire, process the refugees once they arrive in New Hampshire.

Since 2002, Nashua ranks as the state’s fourth most popular home for refugees behind Manchester – the overwhelming leader – Concord and Laconia.

In 2008, the most refugees coming to New Hampshire were from Bhutan in Southeast Asia (277) followed by Iraq (98) and the African nations of Burundi (52) and Somalia (43).

Refugee aid is meant to be a program of last resort for financially struggling refugee families with health coverage only offered for the first eight months after their arrival to help them settle here.

They are to receive cash payments or have health care costs covered only if they are not already enrolled in state welfare, the federal/state Medicaid or the Children’s Health Insurance Programs.

State HHS workers are responsible for scrutinizing applicants for refugee aid for the Office of Energy and Planning.

Auditors found 22 percent of recipients checked for testing purposes were ineligible for refugee benefits.

HHS workers later did their own analysis and determined improper payment of $20,692 in cash benefits and $18,739 of ineligible health care coverage to clients in the budget year that ended June 30, 2009.

Energy and Planning Director Joanne Morin responded in the audit that the program is being transferred to the Office of Minority Services in HHS as early as this Oct. 1 but no later than July 1, 2011.

“In the cases that were cited, information was misunderstood by workers which led to the efforts,” HHS staff answered in the audit. “The workers have since been trained. A statewide training in refugee policy was offered in January 2009.”

The state’s automated eligibility system has been programmed to deny refugee payments to applicants if they are enrolled in other cash assistance programs.

Meanwhile, the auditors also discovered that refugees who lived in housing they pay for privately have been getting shortchanged in cash benefits by small amounts since 2002.

Since that year, the regulations provide for larger benefits to refugees in the program who don’t live in government-subsidized housing to reflect their greater, out-of-pocket costs to live.

But the auditors uncovered that this greater shelter allowance enshrined in 2002 was not put in place. A test sample disclosed 56 percent of those test cases were not being paid the proper amounts.

The audit further notes Energy and Planning administrators noticed the problem themselves in November 2008 and met with state HHS officials to resolve the matter by January 2009.

The auditors report, however, the clients continued to get underpaid through last March.

The total underpayments were $27,800 from July 2002 through February 2010.

The budget called for refugee assistance last year to total $759,575 but the deep recession helped actual grants to be nearly double that amount, almost $1.3 million.

These were among the 31 findings in the report Audit Division Director Richard Mahoney presented Tuesday to the Legislative Fiscal Committee.

With only two-dozen workers, the Energy and Planning Office is charged with managing nearly $52 million of federal money spent in several programs. Some are carried out by nonprofit community action agencies such as fuel assistance and grants for weatherization for financially eligible homeowners.

Other findings in the audit included:

Double Payments: The agency had no system in place to prevent weatherization grants from being spent on a home that had already gotten these improvements in violation of federal regulations, auditors disclosed. A sample review of case files found one such double payment that state officials blamed on the misspelling of the tenant’s name in the application allowing it to slip through the cracks.

Poor Oversight: Auditors got such inconsistent information on weatherization payments to one community action agency that got $370,000 that they could not verify any spending on that contact;

Improper User Access: The fuel assistance program manager could add or delete a client or change the benefit amount without any agency review of the change.

“This unnecessary data access authority creates a risk that an inappropriate data change could be used to perpetrate or disguise an error or fraud,” the audit said.

The employee said he was unaware he had this access and Energy and Planning Director Morin reported in her response that the software has since been changed to be “read-only” access.

Costs Not Supported: The agency failed to establish controls to properly monitor more than $40 million in fuel assistance grant spending. Auditors cited several irregularities they found including a failure to prove how $4,000 in postage for one agency got spent and another agency could not show why the nonprofit’s ledger and audited spending differed by more than $20,000.

Kevin Landrigan can be reached at 321-7040 or