Editorial

Uncashed checks and false economy at DHHS?

Wednesday, October 5, 2016

Check out almost any governmental budget, and you'll see the largest line item is salaries.

Paying people is the most expensive part of almost any enterprise, and it's the obvious choice when budget cuts are needed.

What happens, however, when you don't have people to do important jobs like deposit checks and reconcile accounts?

Thanks to a state audit, the Nebraska Department of Health and Human Services can answer that question, to the tune of $13 million.

The state didn't lose that money but probably did lose thousands of dollars of interest it could have made had that much in uncashed checks been in the bank instead of locked in a safe in an office.

The 192 checks came from drug manufacturers as reimbursement for a share of the drugs they sell in exchange for having them covered by Medicaid.

The problem is, the checks need to be reviewed to make sure the drug companies are paying as much as they should. If there's a dispute, it's in the state's interest to delay the process instead of accepting less than it is due.

The DHHS had only two full-time accountants who were trained to process the payments, but one retired in April and the other had been on medical leave since June.

The checks kept arriving, and other employees locked them up in a small safe in the meantime.

After State Auditor Charlie Janssen's office began raising questions in August when more than $17 million in checks had accumulated, HHS staff deposited $4.5 million over 10 days.

State auditors then looked inside the safe themselves and found 57 checks worth $6.8 million that were not endorsed for deposit only.

HHS has pulled in temporary help to clear up the backlog and is considering permanent changes to the system for the future.

No one is accusing anyone of improper or illegal activity, and there's plenty of room for criticism of financial transactions and policies at all levels of government.

But the situation illustrates how people are key to any process and too many cuts can result in false economy.

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