A state audit has found that the Nebraska Department of Health and Human Services improperly spent nearly $8 million in federal funds in order to use the funds before they lapsed.
The audit found that the department issued payments to participants of the Low Income Home Energy Assistance Program, including some who were known to be dead.
State Auditor Mike Foley said Monday that the payments were made in haste in August 2011, just five weeks before the federal deadline to use the money.
Auditors found that the state made nearly 19,000 payments of either $250 or $500 directly to customers who had previously qualified for "crisis assistance." The federally approved state plan for the grant money says that any checks to assist those customers should have gone directly to their energy utility providers to ensure appropriate use.
Auditors say there's no way to confirm how the money was spent. But an audit testing of 135 of those payments showed that some checks were cashed at a keno parlor, grocery stores and restaurants.
In addition to the payments sent to customers instead of their utility companies, DHHS sent payments for individuals no longer in need of assistance, which is against state regulations.
The report shows that 261 payments were sent to people that are deceased, most of which were known by the agency to be dead. Many of those payments were later cashed.
Foley points to other areas in the audit where DHHS violated its own rules, including keeping an excess of federal funds, not checking to make sure paid-out funds were used appropriately and as well as approving the use of the funds for other than what was intended.
At a news conference Monday called by Foley regarding the audit, DHHS CEO Kerry Winterer said that while the funds weren't disbursed in 2011 according to state guidelines, they were sent to eligible households by a process the federal government says is commonly used by other states.
Winterer said the agency has already taken action to fix the problems. He said the department has new leadership that will work to make more timely decisions as well as the inclusion of LIHEAP into a data system that will provide the most current information DHHS has available about households.
In addition, DHHS also makes LIHEAP, and other assistance payments, to a debit card and no longer uses checks, which should make it possible to avoid problems mentioned in the audit.