- Associated Press - Wednesday, May 13, 2015

RALEIGH, N.C. (AP) - North Carolina’s health agency wasted at least $1.6 million in excessive payments for temporary help connected to the Medicaid billing system that suffered a troubled launch two years ago, the state’s financial watchdog said Wednesday.

The report by state Auditor Beth Wood’s office pinned the blame on the managers of the new NC Tracks computer system that for months in 2013 failed to pay scores of doctors and hospitals.

The report describing the wasted money involving temporary workers at the Department of Health and Human Services covers a period spanning the administrations of both Democratic Gov. Beverly Perdue and Republican Gov. Pat McCrory. DHHS is the state’s largest agency with about 18,000 workers and handles about $19 billion a year in state and federal funds.

Between mid-2011 and mid-2014, the Office of Medicaid Management Information Systems Services paid temporary employees almost $808,000 more than their qualifications justified, spent almost $600,000 more in commissions to temporary staffing agencies than if the state-operated temp staffing service had been used, accepted questionable claims of overtime work costing nearly $235,000, and disbursed $26,000 in holiday pay to workers ineligible to receive it, the report said.

“The OMMISS Director’s abuse of her authority through the hiring process caused these excessive costs,” the report said.

The former Medicaid information systems director, Angeline Sligh, retired in February after 14 years at DHHS. She did not return a call to her home seeking comment.

Auditors found Sligh hired more than two dozen people with family or personal connections to her or other agency staffers, several of whom were unqualified or overpaid.

Sligh hired her daughter, ex-husband, his wife and several members of her church, the report said. Sligh directly hired four executive assistants who attended her church, the last of which was paid nearly $87,000 in regular and overtime pay in 2014 - making her the highest-paid person in that position in state government, the report said.

DHHS terminated the unnamed executive assistant for not “being compensated appropriately” after the investigation began, the report said.

Sligh’s hiring practices should be avoided but didn’t violate the state’s anti-nepotism policy because most weren’t related to her and her daughter didn’t work for her, DHHS said in a written response.

The health agency also said the problem with excessive wages wasn’t as broad as auditors described and highlighted the lack of a statewide policy for the selection and compensation of temporary workers.

Wood’s auditors countered that DHHS was ignoring that the Medicaid computing office’s management set salaries without analyzing what private temporary staffing agencies were paying or the qualifications of the people brought in. More than a dozen temporary state workers collected paychecks for longer than the one-year limit set by state policy.

Sligh also “did not hire employees from a pool of qualified applicants from the private temporary staffing agencies,” the report said. “The investigation revealed that the OMMISS Director hand-picked employees, directed employees to specific private temporary staffing agencies, and set their pay rates.”

NCTracks replaced a billing system originally built in the late 1970s. The project was scarred by cost overruns that doubled its price tag and delayed the launch by two years. Most of the price tag is being paid by the federal government.

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Emery P. Dalesio can be reached at https://twitter.com/emerydalesio

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