The state’s $200 million computer system for welfare programs has had an “unacceptable” rate of mistakes and could force the state to reimburse as much as $10 million to the federal government, state auditors reported Tuesday.
The audit concluded that human error and computer glitches have turned the Colorado Benefits Management System – a program designed to streamline the process of helping poor people – into a costly problem.
Some caseworkers entered dates incorrectly. Some welfare recipients collected more than they deserved. Some computer screens weren’t providing updated information about clients.
State Auditor Joanne Hill acknowledged that the system is “mammoth” and “the numbers are daunting” but said the problems are too costly to ignore.
“I will say that the error rates were unacceptable,” Hill said.
In some ways, the audit put numbers on a problem that has had many faces. When CBMS debuted in September 2004, tens of thousands of clients were backlogged in the system and their plight was described in news articles and a court case.
The audit showed the error- prone system could now cost the state millions because of overpayments. The state is barred from trying to get the money back from people who were overpaid.
State auditors reviewed 288 payments between September 2004 and June 2005, the critical startup stage of CBMS, and found that some needy people collected food stamps, Medicaid payments and other assistance not due them.
In the sample of food stamps, the auditors found that 69 of the 96 payments contained at least one error. For the 69 payments with errors, there were $4,500 in questionable costs out of $22,507 total costs.
The Medicaid sample included 39 of 96 payments that had at least one error. The auditors found $156,984 in questionable costs out of total sampled costs of $538,381.
The audit found that overpayments to recipients of food stamps and Temporary Assistance for Needy Families totaled $10 million for the 2005 fiscal year.
The state may have to reimburse the federal government for those mistakes.
Liz McDonough, spokeswoman for the Colorado Department of Human Services, said the amount is too high.
“We have an issue with overpayments,” she said. “We acknowledge that. At the end of the day, we don’t know what the level is. We believe it will come in significantly less.”
Dr. John Witwer, appointed by Gov. Bill Owens to run the CBMS office in May 2005, said the operation has improved significantly during the past year.
One of the key problems driving up the overpayments during the audit period was a court-ordered “case-cleansing” process. Cleansing means converting the data from existing systems to CBMS and updating with additional required information.
During that computer transition process, the state had to pay out benefits even if it was unclear whether the recipients were still eligible. It was ordered to make those payments to ensure that those who were eligible were not cut off.
In January 2005, only two- thirds of the cases had been cleansed. As of March 2006, 99.6 percent of those cases were completed.
“Right now, we’ve wrung that out,” Witwer said. “It’s no longer an issue.” He estimates that 80 percent of the overpayments were due to the court-ordered cleansing process.
Cindi Stetson, deputy state auditor, said that even though the survey period ended nearly a year ago, the report would serve as an instructional guide for state departments.
“When you look back at the past and quantify the issues,” she said, “it really ensures that you have the controls for the future.”
Staff writer Mark P. Couch can be reached at 303-820-1794 or mcouch@denverpost.com.
