Auditor General says DPW mismanaged payroll, cost taxpayer millions

An audit has found that the Department of Public Welfare's decision to consolidate payroll services for home health care workers led to hardship for unpaid workers and cost taxpayers millions in extra care and disabled and their families sought new, more expensive providers.

The audit, released Thursday, showed that a decision by then-DPW Secretary Gary Alexander to cancel 36 state-based contracts for payroll services to those who provide care for the disabled and award a single contract to Boston based Public Partnerships Ltd.,left thousands of health care workers unpaid for as long as four months and compromised care for vulnerable people.

Auditor General Eugene DePasquale said thousands of disabled Pennsylvanians and the low-wage workers who care for them suffered "because DPW failed to provide adequate oversight and demand accountability of contracted payroll providers."

DePasquale, speaking at a Capitol news conference, also said because of the confusion and fears about care being disrupted, at least 1,500 people decided to switch to higher-cost services that cost taxpayers at least $7 million in the past year.

DPW Secretary Bev Mackereth - who was named to the post by Gov. Corbett after Alexander's resignation in February - acknowledged the roll out of the new payroll service was problematic, but said steps have been taken since the audit began eight months ago to correct the issues.

"Many problems have been resolved," Mackereth said after the news conference. "We do have to do a better job."

Public Partnerships was paid $18 million up front by the state to administer the Medicaid-funded program beginning in January and still the workers' pay was held up for as long as four months, DePasquale said. This caused some workers, making between $8 and $15 an hour, to lose their homes or be evicted from apartment, he said.

The company is paid roughly $1 million a month to administer payroll services for about 20,000 workers ho care for about 16,000 people of all ages with long term disabilities..

The audit which looked back to 2009, also revealed issues with DPW oversight of the multiple payroll contracts that occurred during the Rendell administration. DePasquale said numerous instances of noncompliance with state and federal laws, regulations and financial services standards by the state-based payroll providers before Corbett took office was what led to the decision to consolidate the services.



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