LINCOLN — State Auditor Mike Foley released another audit Monday critical of the Nebraska Department of Health and Human Services, saying the agency was “leaking” taxpayer dollars due to incompetence.
The audit also led to the jailing of a Gering, Neb., woman on embezzlement charges.
At a press conference, Foley laid out audit findings indicating that nearly $400,000 in cash assistance to blind, aged and disabled people has been mistakenly or illegally distributed. It also alleged that Judith Widener, who served as legal guardian for more than 600 people, had diverted thousands of dollars in payments for her own use.
About 36 percent of the payments sampled by the auditor's office through the Assistance to the Aged, Blind or Disabled (AABD) and the State Disability Program were in error, the audit indicated.
“Once again, the citizens of Nebraska have seen their hard-earned tax dollars squandered by the state's largest agency of government,” Foley said at a press conference. “Far worse, though, the welfare of some of Nebraska's most vulnerable elderly and disabled citizens, including veterans, has been jeopardized by the negligence of (the department).”
In a statement, HHS officials acknowledged that “in some cases there have been inaccurate payments,” but in many cases those were “due to the failure of the client to provide required information.”
“The program is funded and staffed at a level to periodically review these cases and where we find overpayments, we recoup the overpayments from recipients,” agency officials said.
In connection with the audit, Widener, 70, of Gering was arrested Friday and charged with theft by taking, a felony.
Widener ran a nonprofit company called “Safe Haven” that was hired by state courts to handle more than 600 guardianships of blind and disabled clients in more than 60 counties across the state.
Widener did not return messages left at her office Monday.
Foley said a small sampling of cases handled by Widener indicated at least $35,000 in funds missing. But, he said, much more could be missing because Widener controlled 40 bank accounts that held more than $600,000.
The auditor, as well as advocates for the disabled, said several “red flags” about Widener's activities were not heeded, including critical reports from two federal agencies and an order by Lancaster County Court Judge Gerald Rouse barring any further cases for her.
“How could one person with a two-person office act in the best interests of that many people?” asked Dianne DeLair of Disability Rights Nebraska, a group that advocates for the disabled. “HHS definitely should have known, or they did know, and they didn't care.”
But Kathie Osterman, an HHS spokeswoman, said guardians are appointed by the courts, not HHS, and people who need guardians are wards of the courts.
She also said the department is not required to ensure that guardians file an annual accounting with the court, nor does the department get a copy of the accounting after it is filed.
State Sen. Colby Coash of Lincoln, who serves on a state guardianship commission, said he has heard concerns about Widener for years.
But he said judges on the commission have told him they have few options for many people who need guardians.
Nebraska is the only state that relies on volunteers to be guardians, Coash said. People who serve as guardians can get reimbursed for expenses but are not paid for their work.
Some people agree to be volunteers for family or friends and some attorneys serve as guardians as a public service.
“Put all that together and you can't be surprised that this kind of thing happens,” he said.
Both DeLair and Mark Intermill of the Nebraska office of the AARP said the case should inspire state lawmakers to create an office of “public guardian” to step in when family members are unable to do so.
It would replace companies such as Widener's that are engaged as guardians “of last resort” due to a shortage of such representatives.
Coash said he is studying the options, which could include having the courts, HHS or counties oversee public guardians.
Foley said the audit supports his contention that HHS is a broken agency that needs to be dismantled “brick by brick.”
He rejected the idea that the audit was released to boost his gubernatorial campaign. “This is just a good, solid audit that needed to be done,” he said.
Monday's audit focused on the assistance programs for roughly 6,000 vulnerable Nebraskans who are elderly, blind or disabled. The programs provide about $15 million in state tax dollars to people with little or no income for basic needs, such as food, clothing and shelter and medical expenses.
But Foley's team of auditors concluded that due to a lack of competency and a lack of training at HHS, hundreds of thousands of dollars were being wrongly spent.
Among the problems uncovered: • $645 was paid in “living expenses” to a convicted felon, who didn't need living expenses because he was incarcerated in the State Penitentiary. • More than $100,000 in assistance was paid to one recipient who didn't properly disclose assets to HHS that would have disqualified the person from receiving payments. • The assets of one applicant were incorrectly lowered, leading to $122,000 in improper payments. • HHS failed to check the bank account of one applicant, leading to improper assistance of more than $150,000. • In 10 instances, assistance payments were made to people after they had died, totaling about $2,300 in improper payments.
World-Herald staff writer Joe Duggan contributed to this report.