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Former NC DHHS Head: "I Don't Think Department Was Mismanaged"

11:55 PM, Feb 5, 2013   |    comments
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Raleigh, NC -- Last week, at a news conference by current Governor Pat McCrory and the head of Health & Human Services reported big issues within the department, including possible violations.

The former leader, Lanier Cansler, of the North Carolina Secretary of the State Health Department told WFMY he did nothing wrong in the way he managed the Department of Health and Human Services during his years there. 

Read Previous Coverage Here:

New DHHS Head Says Department Is Structurally Broken

Audit Find Violations In DHHS

State Audit Of DHHS' Medicaid System

Lanier Cansler's comments come after a scathing report from the state auditor revealed mismanagement, overspending and questionable accounting practices at DHHS between 2009 and 2012.

Cansler, who resigned from his post to work in the private sector in early 2012, was the head of the department for the majority of the period of the audit.

"There's no cost accountability, there's no accountability for these costs that are being spent," state auditor, Beth Wood, said while detailing the report.

Wood explained that the DHHS went over budget every year between 2009 and 2012 by $1.4 billion.

Dr. Aldona Wos, the new head of the department, says identifying the problems that plague DHHS is imperative to improving its operations.

On the overspending, Wos says, "there's a budget for a reason. And just as in your own homes, we must adhere to this budget."

But as Wood points out, it's more than that.

"Spending for the state's Medicaid program is 38 percent higher than the average of nine states," she read from the report.

She also points to several instances of questionable accounting and administrative inefficiencies at DHHS.

"The Division of Medical Assistance uses flawed and incomplete budget forecasting methods," she explained. "They've not really tracked or monitored the expenditures."

In some cases, over the three year period of the audit, DHHS heads may have broken federal and state laws, according to Wood.

"We found that the division's budget and developmental practices potentially violates state statutes that have been enacted to ensure agency accountability," she said.

At least two of those instances cost state taxpayers $190 million.

There was another time, according to the audit, when DHHS leaders went against lawmakers' directives and didn't eliminate inflationary increases on nursing homes. That decision cost an extra $14 million in spending.

"This is taxpayer money. Every dollar that is mismanaged for Medicaid is one dollar less that is available for the purposes of education, for things like road and bridge repair," Governor McCrory reacted.

Cansler, though, denies all the allegations.

"I don't think the department was mismanaged," he said in an interview with WFMY News 2.

Cansler explains that while he supports the governor and state leaders' efforts to improve the workings of DHHS, he believes they are in for some surprises when they realize the audit doesn't paint the whole picture of why DHHS leaders made the decisions they made.

"As they examine the issues raised in the audit, I think they will find that sometimes there are logical reasons that have created the situation that exists [...] you can put the blame anywhere you want to," he said.

The former DHHS head says he disagrees with Wood's assertion that DHHS ignored directives from lawmakers.

He says each of the circumstances detailed had its own "complicating factors" and at times he had to make decisions based on changing information.

On the overspending charge, Cansler says there were times where the department had a surplus, but taxpayers need to remember that he ran DHHS during the "worst economic times that the state had ever had."

He blamed high demand and fluctuating enrollment of Medicaid for the budget shortfalls.

He says because of the way the budget works, DHHS leaders couldn't keep the money from the surplus in a flex account for years when demand would go up.

Right now, though, Doctor Wos isn't interested in blame. She says she's focused on a fix.

"Unless you fix the broken structural problems, it's very, very difficult to deal with the real issues we should be dealing with, she said, referring to Medicaid expansion, mental health, obesity awareness and other responsibilities of DHHS.

"I wish them all the luck in the world of making things work better and I think they will achieve some goals," Cansler said.
The state auditor says she's conducting another audit which will include an "investigation" of some sort.

For now, she says the state can save millions by just following the 20 recommendations she's laid out in her report.

WFMY News 2

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