The North Dakota Department of Human Services is being faulted in a recent audit for not following its own investigative policies in a timely manner and for a wide variety of financial errors totaling more than $600 million.

In particular, the State Auditor’s report notes some of the investigative issues with Human Services go back six years.

The following is a list of the major areas noted in the audit to be of significant importance:

Failure to Comply in a Timely Manner

The audit has revealed that the Department of Human Services is not following its own policies in a timely manner. As it is stated in DHS policy, face-to-face contact with children who are believed to be victims of abuse must be initiated between 24 hours and 12 days. In the case of extreme abuse — such as burns, sexual abuse, and death — contact must be made within 24 hours. However, the actual DHS response time was shown to average 13 days when dealing with any situation.

Childcare Providers Operating without Implementing Corrective Orders

The audit also states that of the 537 corrective orders placed upon childcare facilities by the DHS, 170 facilities were not re-inspected within their required time frames, jeopardizing the health and safety of children who are placed in these areas.

Not Verifying Income

The Auditor’s Office also found DHS is not verifying income for individuals who apply for their Substance Use Disorder (SUD) Voucher Program. As a result, this allows people who receive benefits from the voucher when they are not eligible for it to take resources and opportunities away from those who truly need the support.

Substance Use Disorder Vouchers Incorrectly Paid

On the subject of the SUD Vouchers, it was revealed that over a million dollars were incorrectly paid for by the Voucher Program rather than Medicaid, which could have aided up to 293 additional individuals. As a result, the SUD Voucher Program ran out of funds, and people were denied entry into the program for an entire year.

Employees Underpaid, Ineligible Employees Given Bonuses

Employees at the Life Skills and Transition Center and the State Hospital who worked weekends and nights were reported to have been paid $132,000 due to a misstatement in a 2021 shift policy. On the opposite side, the DHS was noted to have paid $157,000 of bonuses to 130 employees who were ineligible for payment increases.

Financial Statement Errors

A total of $629 million in errors were observed in financial statements reported during the State’s Annual Comprehensive Financial Report.

Unsupported Controls over Medicaid Drug Rebate

Internal controls surrounding the Drug Rebate and Analysis Management System (DRAMS), used to calculate drug rebates and interest from the Medicaid Drug Rebate Program, were deemed to be inadequate by the Auditor’s Office. DHS was not able to provide a detailed list of accounts, rendering the Auditors’ office unable to check the account balances for the Comprehensive Finance Report. A known overstatement of interest calculated on DRAMS of $287,619, with a projected likely total error of $6,297,706.

It is of particular note that several of these concerns — including failure to timely contact victims, a lack of implementation of corrective orders, financial statement errors, and unsupported controls over the Drug Rebate Program — have been identified in prior audits by the State Auditor’s Office, but have not yet been addressed.

“This is the third consecutive audit that our team has identified that children are in extreme abusive situations for longer than they should be. These are children who are experiencing sexual abuse, physical abuse, drug use, and are at risk of death.” Stated State Auditor Joshua Gallion in a press release. “I urge DHS to work with the legislative assembly to gain resources to be responsive and better staffed so these unacceptable conditions improve for the most vulnerable voices.”

The full audit report is available in this document from the North Dakota State Auditors Office.