Accounting Lapse at DHHS Cost Nebraska Taxpayers over $1.8 Million

State Auditor Mike Foley has issued an audit management letter to the Nebraska Department of Health and Human Services (DHHS) citing the failure of DHHS simply to ask for Federal reimbursement funds owed to the State in a timely manner – thus costing Nebraska taxpayers over $1.8 million.

               The issue came to light when Foley’s audit team examined the accounting for an adoption assistance program managed by DHHS.  It was found that DHHS paid for those program expenses and then failed to seek $656,489 in Federal reimbursement funds during the five-year grace period for doing so.  Realizing that Nebraska taxpayers had been short-changed by what DHHS called a “clerical error,” the auditors dug deeper and discovered the problem to be a far more serious one that has been occurring for years.

               As of June 30, 2012, DHHS failed to collect $1,821,941 in Federal receivable funds relating to child welfare and protection – all of which should have been collected by the State from the Federal government.  Federal law allows a State agency five years after the period of availability in which to request Federal funds for certain program expenditures incurred by the State.  By failing to make such a request for Federal reimbursement during the considerable time allotted, DHHS missed the opportunity for the Federal funds.  Consequently, program costs were pushed onto Nebraska taxpayers.

               The failure of DHHS to pursue almost two million dollars in available Federal funds resulted in child welfare and protection costs being paid for instead with State tax dollars, which could have been used for some other purpose.  The breakdown of the funds lost by DHHS was:

Grant Year

Grant Program

Amount Lost


Child Support Enforcement



Adoption Assistance



Adoption Assistance



Child Support Enforcement



Foster Care Title IV-E



Foster Care Title IV-E



Adoption Assistance



Adoption Assistance



State Survey and Certification of Health Care Providers


Total Federal Funds Lost


               To clarify, DHHS spent the $1,821,941 and did not properly seek the reimbursement monies the State was entitled to from the Federal government.  Aside from placing partial blame on an alleged "clerical error," nobody at DHHS could explain the agency's failure to initiate, at any time during the long five-year grace period, the process of claiming the available Federal funds.

            According to Foley, "For five whole years, the Federal money was literally there for the asking.  All the State needed to do was to file a timely request for reimbursement.  As a result, the citizens of Nebraska paid the price for those glaring errors – this time to the tune of roughly two million dollars."   

           A copy of the management letter, including the response from DHHS, can be found on the State Auditor’s web site (see link below) under “What’s New.”

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