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SC Health and Human Services Agencies: A Review of Non-Medicaid Issues
January 2003

FOLLOW-UP (PDF)     REPORT (PDF)     SUMMARY (PDF)

Members of the General Assembly asked the Legislative Audit Council to conduct an audit of the eight agencies assigned to the health, human services, and Medicaid budget subcommittee of the House Ways and Means committee. These agencies’ budgets for FY 02-03 totaled $5.7 billion, comprising nearly 38% of the state’s budget. The audit requesters asked us to make recommendations for reorganization of these agencies to eliminate duplication and improve services. They were also concerned about funding, controls over client eligibility, and the agencies’ outcome measures. While many of the programs we reviewed are funded by Medicaid, we did not review administration of the Medicaid program in this report, as it is covered in a concurrent LAC audit, Options for Medicaid Cost Containment (January 2003).

We reviewed the organizational structure of South Carolina’s health and human service agencies and found that similar services are often provided by multiple agencies. This structure can have several effects:

  • It can be more difficult for clients to determine where to apply for help.
  • Agencies may spend extra resources on interagency referrals and service coordination.
  • Administrative costs in areas such as finance, personnel, and information technology are increased.
  • Planning and budgeting are conducted in a fragmented manner.

We recommend consolidation in four areas where similar services are provided by more than one state agency:

  • Senior and long term care programs.
  • Addiction treatment programs.
  • Programs for emotionally disturbed children.
  • Rehabilitation programs.

Also, five of the eight health and human services agencies we reviewed are not part of the Governor’s cabinet. There is no central point of accountability for their performance. No executive branch entity has the authority to ensure comprehensive planning and budgeting or that services are provided efficiently.

If programs with similar services were consolidated into fewer agencies, under the authority of a single cabinet secretary, the need for different agencies to make referrals to each other and to coordinate their similar services would be reduced. Administrative costs, in most cases, could be reduced, while planning and budgeting could be unified.

Additional Findings

  • There is an opportunity to reduce the number of area agencies on aging (AAAs) administered by the Department of Health and Human Services. Currently 10 area agencies distribute funds from the state office to providers of services for seniors. The administrative savings from consolidation could be used to expand client services. Also, the AAAs do not use competitive procurements to ensure that providers are cost-effective and/or high quality.
  • The Department of Mental Health (DMH) could increase revenues from patients, particularly at the community mental health centers. The centers collected an average of just 10% of the amount billed to clients and 15% of the amount billed to insurance. For every 10% increase in self pay collections, DMH would obtain approximately $840,000 in additional revenue.
  • The Department of Health and Environmental Control (DHEC) has not been aggressive in collecting funds owed from clients for health services. DHEC does not have adequate policies for billing, tracking, and collecting accounts receivable. If DHEC made greater efforts to collect from those who are required to pay, it could provide more services.
  • The Department of Social Services (DSS) has not verified client assets such as personal property and bank accounts for the family independence program. As a result, ineligible persons may be receiving services.
  • DSS’s internal controls to ensure that clients are eligible for the food stamp program are adequate. For the past several years, South Carolina has received enhanced funding from the U.S. Department of Agriculture due to its low error rate for the food stamp program.
  • Performance measures we reviewed in the four health and human services agencies that provide direct client services were generally based on national benchmarks. However, in three of the agencies, performance data that the state offices require from their county or district offices was not always consistent or reliable.
    • The Department of Mental Health does not have reliable cost information for treatment programs provided at the community mental health centers.
    • Performance data collected by the Department of Health and Environmental Control from the 13 health districts is not consistent and does not provide a clear picture of progress or the need for improvement in the districts.
    • There is no consistency in the data on child welfare collected by four Department of Social Services county offices. Also, the controls over data verification are inadequate.