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Auditor finds payroll mismanagement caused home-care workers problems

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Thursday, Nov. 14, 2013, 3:51 p.m.

HARRISBURG — The Department of Public Welfare mismanaged off-site payroll providers for home-care workers, causing service disruptions for disabled people and millions of dollars in unnecessary costs, the state auditor general said on Thursday.

A switch from 36 payroll companies to a single-payer contract last year delayed pay for caregivers for months, Auditor General Eugene DePasquale said.

An estimated 20,000 adults and children with disabilities receive state-subsidized assistance to remain in their homes rather than long-term care facilities.

“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 per year,” DePasquale said.

Kathleen Kleinmann, director of Tri-County Patriots for Independent Living in Washington County, one of the payroll providers who were replaced, said she foresaw problems and tried to warn state officials.

“Nobody listened. It was ‘Damn the torpedoes, full speed ahead.' I thought it was a lot of people in Harrisburg who had no idea what they were doing,” Kleinmann said after DePasquale's news conference. “I knew what the consequences would be.”

Auditors found a lack of adequate monitoring of payroll providers dating to 2009, during former Gov. Ed Rendell's administration. It was unclear why the state initially used 36 companies for financial management services.

Last year, the state hired Public Partnerships LLC to provide statewide payroll services, giving the Boston-based firm an $18 million advance. The contract was written to eliminate other potential vendors, the audit said, though DePasquale found nothing untoward in the contract award.

He made no allegations of wrongdoing or illegality by the firm or Welfare officials, though the audit found the department ignored many “red flags” that indicated the company was not prepared for the startup under an agency-imposed deadline.

Welfare Secretary Bev Mackareth, who took office this year, apologized for hardships to caregivers, participants and their families. Oversight and better management of the PPL contract has improved payroll services, she said.

Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or

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