Audit criticizes delays in payments for Pennsylvania caregivers

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HARRISBURG -- Years of poor oversight by the Department of Public Welfare, followed by a botched transition into a new payroll system for workers caring for the elderly and disabled, caused thousands of those caregivers to go without paychecks for months and harmed the well-being of the state's most vulnerable residents, according to a state audit released Thursday.

The caregivers tend to about 20,000 elderly Pennsylvanians and people with disabilities, providing assistance with daily tasks like eating and bathing, allowing those individuals to remain in their homes, rather than in nursing facilities.

The 85-page audit faulted the state's Department of Public Welfare for years of mismanagement and lack of monitoring in the caregiver program, but said the most acute problems arose late last year and earlier this year, when the DPW consolidated 36 separate payroll providers around the state into just one, Public Partnerships Limited of Boston.

"Our audit found that problems with the transition caused so much fear and confusion that at least 1,500 people receiving home care services switched to a more expensive model of care, that is unnecessarily costing at least $7 million more per year," said a statement from Auditor General Eugene DePasquale, a Democrat who released the audit at a Capitol news conference.

The caregivers are not state employees -- they are a mix of family members and independent contractors who are employed by either a third-party care agency, or by the seniors and disabled themselves. The wages they receive are low enough, Mr. DePasquale said, that missing a paycheck or two creates a significant hardship for most of them.

The eight-and-a-half month audit was launched in February after numerous complaints from workers who were not being paid, from the recipients of the care, and from legislators, Mr. DePasquale said.

The audit found DPW, dating back to 2009, was not adequately monitoring the 36 different payroll service providers -- both nonprofits and for-profit companies.

The audit also stated when the DPW made the change to just one payroll services provider, the procurement process was unfair to vendors, and the state ignored warnings that the company it selected would not be able to pay workers on time beginning in January.

"The most notable red flag that DPW ignored was [vendor] PPL itself, sounding the alarm about its inability to ensure timely payments to direct care workers on the start date," the audit noted.

Although the company provides services in other states, it had never served a program as large as Pennsylvania's nearly 20,000 participants, according to the audit. (PPL officials could not be reached for comment Thursday.)

Furthermore, DPW hasn't achieved the efficiencies it hoped for with the switch, and is still not adequately monitoring the payroll provider, the audit stated.

"I think the loser is the consumer," said Stanley Holbrook, president and CEO of the Pittsburgh-based nonprofit Three Rivers Center for Independent Living, one of the 36 agencies that had served as a payroll provider before the switch.

Under the previous system, disabled consumers and their families were more in control of their own care and had more contact with the payroll provider, said Kathleen Kleinmann, executive director of Tri-County Patriots for Independent Living, which serves people in Washington, Fayette and Greene counties.

"Who touches your body and who comes into your house is a very private matter ... you have to have maximum control," said Ms. Kleinmann.

"We recognize and apologize for the hardships that occurred as a result of this transition to some caregivers, participants and their families," said a statement from the Pennsylvania DPW, adding it believes oversight and monitoring of its vendor has led to major improvements, "but as always, we are striving to do better."

Mr. DePasquale said DPW Secretary Beverly Mackereth was open and transparent and cooperative with the audit. She became the agency's secretary in June. "She wants to get this right, I do believe that," he said.

Kate Giammarise:, 717-787-4254 or Twitter @KateGiammarise.

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