Hamilton County improperly charged foster care expenses to other programs

MILLIONS MISSPENT, AUDIT ALLEGES
Another $1.2 billion mismanaged in Hamilton County, probe says
Columbus Dispatch, September 14, 2006 NEWS 01A
By Catherine Candisky and Jeffrey Sheban

State officials have identified at least $1.4 billion in questionable spending by the Hamilton County agency serving children, the poor and unemployed, according to a long-awaited audit, The Dispatch has learned.

The Ohio Department of Job and Family Services audit says $200 million was misspent and at least $1.2 billion more in spending was in question because of a lack of documentation or improper commingling of funds.

If the audit's findings stand, the improper use of taxpayer dollars from 2002 to 2004 could be the largest case of misspending by a local government in Ohio, government sources said.
Hamilton County officials, who were to be briefed on the findings this morning, declined to comment yesterday.

In one case, the county combined $695 million in federal, state and county money for children services in a way that "calls into question whether Hamilton County Job and Family Services met their match requirements with monies from appropriate sources," the 180-page draft audit says. Federal and state funds make up the vast majority of the county agency's $1.3 billion annual budget.

In addition to so-called questioned costs, the audit lists $200 million in "findings for recovery," or practices that clearly violate state or federal law in which money must be repaid.

Hamilton County officials will be given a month to justify their spending, said Jon Allen, spokesman for the Ohio Department of Job and Family Services.

The results of a companion investigation by Auditor Betty D. Montgomery's office will be released separately in coming weeks. Preliminary findings last spring had Montgomery tagging an additional $150 million in erroneous and suspicious spending.

The joint probe was launched in December 2004 after state officials learned that the county agency had improperly charged foster-care expenses to other programs, including Medicaid and food stamps. Such accounting would have allowed the county to get more federal aid than it was entitled to.

An earlier probe by the FBI found no evidence of criminal intent or individual gain.

Still, by commingling funds, the county might have obtained federal money it was not entitled to receive, easing the demand for local funding, Allen said.

County officials must provide documentation or other evidence showing that money has been properly spent, he said.

Based on the county's response, federal regulators will determine how much will have to be repaid.

Allen said it's too soon to discuss possible ramifications, including a taxpayer bail-out or state takeover of the county agency.