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A new audit found multiple problems with how the Maryland Department of Human Services distributed public benefits, including that the agency gave tens of thousands of recipients benefits during the pandemic who didn’t qualify for the programs.
The fiscal compliance audit spanned four years ending in May of 2021, which included the period during the pandemic when federal and state governments raised income thresholds and eased requirements to allow more people access to federal funding.
Among the auditor’s findings: the state agency did not properly track eligibility requirements; paid vendors millions of dollars without ensuring the work was completed; changed a contract’s payment terms to reward the vendor’s effort, rather than whether clients obtained benefits; and neglected to maintain paper records crucial to proving recipients’ eligibility.
The audit targets the Family Investment Administration, or FIA, a division within the Department of Human Services that runs crucial state programs — such as the Supplemental Nutrition Assistance Program, formerly called food stamps, as well as cash assistance and energy assistance programs — that help low-income Marylanders facing hardship to meet their basic needs.
According to the report, the agency agreed with most of the audit’s recommendations but said some findings were not as widespread as the auditors claimed. However, in instances where the agency disagreed, the auditors double-checked their work and stood by their conclusions.
“In each instance, we reviewed and reassessed our audit documentation, and reaffirmed the validity of our finding,” wrote Greg Hook of the Office of Legislative Audits in his summary letter to the chairs and members of the Joint Audit and Evaluation Committee.
In response to the audit, Department of Human Services Communications Director Katherine Morris noted the sharp spike in demand for services during the COVID-19 pandemic, increasing agency caseload.
“We are proud of the work our Family Investment Administration staff have done during the pandemic to ensure that the approximately two hundred thousand+ new applicants received benefits on time, maintaining benefits for the households that were actively participating in programs before the pandemic, and implementing new programs such as Pandemic P-EBT to support nearly 550,000 vulnerable children,” Morris wrote in an email.
Oversight systems didn’t work
In at least two programs, the state gave money to recipients who should have been disqualified from the programs because of time limits and income thresholds. The agency also couldn’t prove if those recipients were exempted from those limits.
When auditors examined the income of SNAP participants one month after the benefits agency identified a system problem, they found that over 86,000 participants’ incomes still exceeded federal limits. According to the audit report, the agency “inadvertently disabled a critical system control resulting in SNAP benefits being awarded to applicants whose income exceeded the federally-established income thresholds” for nearly a year.
Over 3,200 people were given cash assistance for longer than the five-year lifetime limit state and federal laws allow, according to the audit.
In the case of SNAP, the agency admitted they had “inadvertently” turned off the switch that would have flagged such cases. But in the case of temporary cash assistance, there was never a five-year-limit cutoff built into the system to terminate those cases. The agency said they would have their technical team create a fix, but as of Sept. 1, it still was not done, according to the report.
Audit finding creates opportunity for training
Auditors found local social services offices did not maintain paperwork — such as proof of income, drug screening and criminal record verifications — that proves participants’ eligibility, a violation of Family Investment Administration policy.
Josh Adler, assistant director of the Office of Legislative Audits, oversaw the audit, and said the issue “was not isolated.”
“They did not have documentation supporting that people qualified for the programs,” said Adler, whose team counted missing documents in dozens of benefits cases. “We tested 60 [SNAP] cases, in 26 out of 60 who knows if they qualified?”
Morris said the agency “is in the process of conducting a statewide refresher training on case file documentation,” as the audit finding “presented an opportunity for process improvements.”
Contracts rewritten
Auditors cited the human services agency’s management of contracts, which included paying contractors before receiving documentation showing work had been completed, as problematic.
In one remarkable example, the agency changed a contract’s payment terms “so the vendor was paid based on reported effort in screening individuals to obtain federal benefits regardless of whether they successfully obtained benefits,” the report said. The vendor, who is not named in the audit, is responsible for helping Marylanders in need get temporary cash assistance and disability assistance.
“They made a huge change in the contract, and they weren’t able to explain to us why they were making this change without finding another contractor,” Adler said. “Nobody would conduct their personal finances this way.”
The agency did not consistently monitor grants totaling millions given to grantees in 2020 and 2021 who helped with programs such as the Emergency Food Assistance Program to make sure the money was being spent for its intended purpose. Similar issues have been documented in four prior audit reports dating back to 2011.
Adler said the groups were not made to submit receipts proving they are using the money to feed people.
“Some problems are hard to fix,” Adler said. “This isn’t a hard fix, and it goes back a long time.”
brenda.wintrode@thebaltimorebanner.com
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Brenda Wintrode covers state government, agencies and politics. Before joining The Baltimore Banner, Wintrode wrote an award winning series of long form investigations for Wisconsin Watch.
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