Washington State Auditors Office

Whistleblower Report

Department of Social and Health Services

Report No. 1004032

Issue Date August 10, 2010

Washington State Auditor Brian Sonntag

August 10, 2010

Department of Social and Health Services Olympia, Washington

Report on Whistleblower Investigation

Attached is the official report on Whistleblower Case No. WB 09063 for the Department of Social and Health Services. The State Auditors Office received an assertion of improper governmental activity at the Department. This assertion was submitted to us under the provisions of Chapter 42.40 of the Revised Code of Washington, the Whistleblower Act. We have investigated the assertion independently and objectively through interviews and by reviewing relevant documents. This report contains the results of our investigation. Questions about this report should be directed to Senior Investigator Sandy Miller at (360) 9020378 or Director of Special Investigations Jim Brittain at (360) 902-0372. Sincerely,

BRIAN SONNTAG, CGFM WASHINGTON STATE AUDITOR BS: SYM cc: Mr. Jacob White, Public Disclosure and Ethics Administrator Melanie DeLeon, Executive Director, Executive Ethics Board

Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (360) 902-0370 TDD Relay (800) 833-6388 FAX (360) 753-0646 http://www.sao.wa.gov

Whistleblower Investigation Report

State of Washington Department of Social and Health Services
ABOUT THE INVESTIGATION
We received an assertion on April 29, 2009, that a full-time employee at the Department of Social and Health Services was working simultaneously as a paid employee at a nonprofit counseling and referral service in Seattle for individuals with behavioral health issues. The employee started working for the Department in 1994. In June 1995, she accepted a job at the nonprofit. The employee initially worked 20 hours per week at the nonprofit. At the time of the investigation, she was working there 30 hours a week. We reviewed the subjects timesheets and travel documentation at the Department and interviewed the subject and her supervisor. We also reviewed documentation provided by the nonprofit and interviewed its Director of Human Resources. The Department provided the subjects time summaries dating back to 2002 and travel logs dating back to 2005. Due to state records retention rules, the Departments documentation dated back only six years, which is less than half of the 15 years the subject worked for the state and the nonprofit. State records retention laws only require agencies to maintain records for six years. We met with the subject on June 9, 2009, to advise her of the investigation. On June 10, 2009, the Department notified us the subject had resigned effective August 28, 2009, after she had used accumulated leave.

ASSERTION
1. An employee with the Developmental Disability Division of the Department of Social and Health Services is working simultaneously for a counseling agency.

RESULTS
We found reasonable cause to believe an improper governmental action occurred. We identified $154,730.40 in salary, benefits and travel reimbursements that the Department paid to the subject for time when she was working for a nonprofit. Our investigation found that from January 2002 through May 2009, the subject claimed a minimum of 5,380 hours of work for the Department that coincided with dates and times she worked for the nonprofit. We calculated the Department paid the subject a minimum of $149,520.13 including benefits for the same dates and times she was working for the nonprofit.

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From January 2005 through May 2009, the subject also claimed $5,210.27 in travel expenses that coincided with dates and times she worked at the nonprofit. The Department could not provide documentation to support travel reimbursements for January 2002 through December 2004. The subject stated she notified her Department supervisor of her outside employment when she took the job at the nonprofit. The subject stated that when she got a new supervisor, she did not disclose her outside employment because she feared the Department would not allow her to work both jobs. During the investigation, we also identified the subjects salary, benefits and travel reimbursements were charged to Medicaid and Preadmission Screening and Resident Review federal grants. Federal regulations state grant money may be used to pay only for costs that are allowable and related to the grants purpose. Federal regulations specify the documentation that must be kept to support employee compensation charged to federal grants. If an employee works solely on the grant program, and all related payroll costs are charged to that grant, minimal documentation is required: the employee must certify, semi-annually, in writing, that he or she worked solely on that program. Requirements state that for employees who work on multiple programs or whose positions are funded by multiple sources, payroll costs must be supported by personnel activity reports or equivalent documentation, such as timesheets. These reports must: Reflect how much time the employee worked on each program. Account for the total activity for which the employee is compensated. Be prepared at least monthly and coincide with one or more pay periods. Be signed by the employee Without adequate time and effort documentation, federal grantors cannot be assured salaries and wages charged to their programs are accurate and valid. The timesheets for the subject did not identify hours worked each day and were not signed by the subject for the period reviewed. Federal rules require us to question all potentially unallowable costs. We identified $382,206.85 in payroll charges to Medicaid and Preadmission Screening and Resident Review grants for the period January 2002 through August 2009 that were not adequately supported. The Department could not provide timesheets signed by the subject, accurate timesheets supporting the subjects work related to these programs and the amount of this individuals salary that was federal. Additionally, we identified travel reimbursements of $7,468.59. We are questioning the salary and benefits charged to the grants and the travel reimbursements. The federal grantor could disallow these charges and require the Department to pay back the money. Subjects Work Schedule The subject worked 40 hours per week at the Department and 30 hours per week at the nonprofit. Her official work schedule at the Department was four 10-hour shifts Monday through Thursday. Her job duties largely involved a morning meeting at the Department office to which she was assigned and client meetings outside the office for the rest of the day.

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The subjects work schedule at the nonprofit was Monday, Tuesday and Wednesday afternoons and all day Friday. She originally stated she worked at the nonprofit on weekends. We found no evidence she worked there on Saturdays, and the nonprofit is closed on Sunday. The subject stated that she billed the Department for the afternoons she worked at the nonprofit, but would visit Department clients in the evening and take her case files home to work on them. She stated that she felt it was appropriate to take work home without notifying or receiving approval from her supervisor because she was getting her work done. The supervisor provided documentation showing the subject never logged in to the Departments computer system from home or outside of regular business hours. The subject documented that she spent four to five hours with each client for every assessment. Her supervisor stated the subject was required to conduct only six to eight assessments per month and none would require more than three hours with each client. The subject stated she had billed the Department for travel not related to her job because she often combined trips she made on behalf of the Department and the nonprofit. Based on interviews and the review of the subjects timesheets and travel reimbursements, we found reasonable cause to believe an improper governmental action occurred related to working for a nonprofit while being paid by the Department.

RECOMMENDATION
We recommend the Department: Review and monitor its policies and procedures to ensure employees are working in accordance with their work schedules. Seek recovery of $154,730.40 in wages and travel reimbursement. Work with the grantor to determine the actual unallowable costs and whether those costs need to be repaid.

DEPARTMENTS PLAN OF RESOLUTION

To maximize accountability and prevent similar incidents in the future Region 4 Field Service will put into practice the following: 1. Effective 5/1/2010, all Region 4 case management staff began utilizing Outlook software to maintain their work schedule. All out of office site visits and assessments include client and/or agency name and phone number. Supervisors and administration staff were granted access to view these schedules.

2. Effective 6/1/2010, case management supervisors will conduct on-going random checks to verify case managers schedules to ensure staff are conducting state

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business. Supervisors will document these reviews and maintain records in staff desk files. 3. DSHS will contact the Medicaid Fraud Control Unit and the Department of Social and Health Services Office of Financial Recovery to initiate collection and recovery of the misappropriated public funds.

STATE AUDITORS OFFICE REMARKS

We thank Department officials and personnel for their assistance and cooperation during the investigation. Additionally, we would like to thank the nonprofit for its cooperation.

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Whistleblower Investigation Criteria

State of Washington Department of Social and Health Services
We came to our determination in this investigation by evaluating the facts against the criteria below: Asssertion 1: RCW 42.52.070 Special Privileges Except as required to perform duties within the scope of employment no state officer or state employee may use his or her position to secure special privileges or exemptions for himself or herself, or his or her spouse, child, parents, or other persons.

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Contacts
Washington State Auditor Brian Sonntag, CGFM

brian.sonntag@sao.wa.gov

(360) 902-0360

Director of Special Investigations Jim Brittain, CPA jim.brittain@sao.wa.gov Deputy Director of Special Investigations Kim Hurley, CPA kim.hurley@sao.wa.gov Special Investigations Coordinator Julie Cooper julie.cooper@sao.wa.gov Investigators Sandra Miller Cheri Elliott Director of Communications Mindy Chambers Public Records Officer Mary Leider Main phone number Toll-free hotline for reporting government waste, efficiency Website

(360) 902-0372

(360) 725-5352

(360) 902-0377

sandra.miller@sao.wa.gov cheri.elliott@sao.wa.gov

(360) 902-0378 (360) 725-5358

mindy.chambers@sao.wa.gov

(360) 902-0091

mary.leider@sao.wa.gov

(360) 725-5617 (360) 902-0370 (866) 902-3900 www.sao.wa.gov

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Americans with Disabilities

In accordance with the Americans with Disabilities Act, this document will be made available in alternate formats. Please call (360) 902-0370 for more information.