Auditor takes aim at state health, social-service contracting

State health officials mismanaged a special child-protection program and violated the law when they contracted out for services instead of using in-house workers, the state’s top auditor reported in a sharply worded review.

State Auditor Elaine Howle said the state Department of Public Health and its predecessor, the Health Services Department, spent some $2.1 million on administrative costs, or about 40 cents of every dollar they received over a four-year period. The spending violated the Legislature’s intention, Howle reported, which was to insure that the money went to cover costs directly associated with unintentional childhood injuries, and limit child abuse and neglect.

Social Service and Public Health Department officials have various roles in administering the funds, Howle noted.

The auditor also said that health officials improperly had a contractual arrangement with the San Diego State University Research Foundation to manage the Kids’ Plates program from 2004 to 2010.

Nearly two years after that contract expired, the state awarded only a fraction of the grant money available – and the grants that were awarded did not comply with state procedures.

The problem came to light when the state Department of General Services, which tracks state contracts, raised questions about it.

The auditor also was critical of social service officials, who she said failed to properly manage grant funds.

“Of the 30 expenditures from the trust fund we reviewed, Social Services did not fulfill certain contracting requirements for 10 payments made to six grantees,” Howle wrote.

She said the state failed to track the money properly. “In fact, one grantee overcharged the state by $10,189 and Social Services could not demonstrate that another $10,000 paid from the trust fund was for permissible purposes.”

Howle recommended that the state health and social service officials comply with state contracting rules, and said they should justify the use of outsourcing when qualified state employees are available to handle the duties.

State officials acknowledged problems with the contracting procedures and said they have launched a review to block future problems, according to their responses attached to Howle’s 77-page report.

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Ed’s Note: The complete report is available here.