Hurry-up spending fiasco offers lesson for many agencies

The late Jack Rogers, one of our predecessors in this position, used to tell a story about his time in Alaska during the Korean War years.

It seemed Air Force auditors were on their way and the local command had a problem -- one extra bulldozer unaccounted for on the official inventory.

Thinking quickly, someone (probably a noncommissioned officer) simply buried the Caterpillar until the bean counters were gone, dug it up and put it back to work.

State Auditor Mike Foley says he found a buried bulldozer while looking over the books of the Department of Health and Human Services.

At a news conference Monday, Foley announced that some $7.7 million in federal energy assistance checks was sent to residents who weren't eligible to receive it, having already received "crisis assistance" with utilty bills in the previous year. And, instead of going to utility bills, some of those $250 or $500 checks were cashed at Walmart, grocery stores, restaurants, paycheck advance stores and even a keno parlor.

There were even 261 payments totaling almost $112,000 that were sent to dead people.

The Department of Health and Human Services explains that payments go to households, and even though a member dies, the household is still eligible for the funding.

Like the surprise audit in Alaska, the Low Income Home Energy Assistance Program screw-up can be blamed in part on higher-ups, who notified Nebraska in January 2011 that it would be receiving an extra $20 million in unspent federal dollars.

The DHHS also waited too long to decide how to use the money, then had to scramble to distribute it by Oct. 1 rather than return it to Washington. Without time to identify which utility company served which household, the checks were sent directly to the households rather than the utility companies.

Checking on 135 random payments, Foley's auditors found the problems listed above, as well as dozens "signed" by deceased people and cashed at a grocery store, a paycheck advance company and funeral homes. The state auditor said local prosecutors should look into some of the cases.

It was impossible to trace much of the money to utility bills, which is the purpose of the program.

Neither is the rest of the state government faultless in the fiasco. When 1,300 payments totaling more than $500,000 were never cashed, instead of canceling the payments and recycling them back into the LIHEAP program or returning the money to the federal government, the money was simply transferred into the general fund.

That sounds a lot like taking the money and going shopping -- the same thing the auditor is accusing assistance recipients of doing, and a move "the legality of which is suspect," according to the audit.

One good sign was the appearance of both Foley and DHHS CEO Kerry Winterer at Monday's press conference, which gave Winterer an immediate chance to respond.

Winterer said the problem won't happen again, with new leadership in the division involved, a new computer program with more information about households and money going to debit cards which can only be used for their intended purpose.

"Kerry Winterer is a no-nonsense guy and he will take care of these problems," Foley said.

We hope that's true.

We also hope that assistance programs at all levels can learn the lesson that scrambling to spend money is always a bad idea that can only hurt those who really need the help and the taxpayers who are footing the bill.