Breaking news: 800 removed from MCPS dependent rolls!

In January 2009, the Maryland General Assembly, Office of Legislative Audits released their Fiscal Management Practices Audit Report for Montgomery County Public Schools.

One of the recommendations of the State Audit was:

MCPS should enhance its procedures to verify health care costs by ensuring the eligibility of program participants and the propriety of paid claims.

Here is why the State Audit made that recommendation:

Although MCPS had implemented certain practices designed to control health care cost (such as procuring medical and prescription services under cooperative arrangements), it had not taken certain substantive actions to control costs. Specifically, MCPS did not verify the eligibility of program participants and their listed dependents or audit the propriety of claims paid by program administrators. MCPS provides health benefit coverage to active and retired employees through a program self-insured by the Employee Benefit Plan Trust Fund (in conjunction with Montgomery County and several other local government units). MCPS paid approximately $175.8 million in claim payments for 57,000 employees, retirees, and their dependents during fiscal year 2007.

Buried in the minutes of the recently released May 13, 2009, MCPS Board of Education committee meeting (off camera meeting - usually no press or public in attendance) we learn that MCPS has initiated a Dependent Eligibility Audit in response to the State recommendation. And look at what they have found, 800 people who were listed as dependents of MCPS staff that did not actually qualify as dependents!

From the Board Committee minutes:

The dependent eligibility audit will be completed by the end of Fiscal Year 2009. So far 800 inappropriate dependents have been dropped off and termination letters will be sent out. MCPS staff will continue to update the committee on these issues.

Thanks to the Maryland General Assembly for initiating and funding the Audits of local school districts. Without their initiative, the MCPS Dependent Eligibility Audit might never have been initiated by local staff. The next question is how much was the failure of MCPS to utilize best practice accounting procedures costing taxpayers?

UPDATE: Board of Education minutes from December 9, 2008, show that the Board hired a company called Secova, Inc. at a cost of $213,238 plus direct postage costs to verify the "authenticity of the dependents of the eligible employees participating in Montgomery County Public Schools benefit pool." The Board stated that such a review had not been conducted "in a number of years."