The state Department of Health and Hospitals has “rejuvenated” its internal audit function to provide better oversight over spending and to fight fraud, the agency’s compliance officer, Bill Root, said Thursday.
The stepped up effort comes in the wake of the arrest of Deborah Loper, one of the agency’s former fiscal chiefs, in the theft of more than $1 million.
The agency has been lacking the internal oversight for at least two years. The Legislative Auditor’s Office pressed for its reinstatement, noting the agency’s handling of billions of dollars.
Root said the upgrade includes new risk assessment surveys to determine offices with the greatest potential for problems, the designation of a single audit coordinator, the hiring of an investigator and implementation of an audit “strike team” that will tackle emergency issues.
The team has been doing risk assessment surveys in each area of the health agency.
“Based on questions and answers we came up with a risk assessment plan identifying weaknesses and vulnerabilities in those areas,” Root said.
One of the areas involved better control over revenues coming in and check processing, which stemmed for “the well-publicized embezzlement,” Root said.
“Based on Ms. Loper’s case we knew the fiscal area definitely needed stronger review,” Root said. “Nobody had had the time or manpower to tighten it up.”
Root said new policies limit the actual check handling by employees through use of electronic lock boxes, which effectively direct deposit funds. Checks that do come into the office, he said, are scanned with the scanners directly connected to the bank and are directly deposited into the appropriate account.
“It limits the opportunity for loss or abusive behavior,” he said.