Misspent millions

Several Virginia localities may owe the state and federal governments millions in misspent funds designated to help troubled kids and teens.

Craig County may owe $2.6 million to the state and federal government, according to an April report by state social services officials. Earlier this year, the Virginia Auditor of Public Accounts found that Pittsylvania County may owe the state $7.7 million for receiving payments through the Comprehensive Services Act from students that were not eligible for the program.

"It's more than jaw-dropping," said Craig County Administrator Richard Flora when told about the possible cost last week, according to The Roanoke Times. "That's about 40 percent of our total revenue."

The report on Craig County stated that the lack of documentation and the disorganization of programs, staff, and work areas "puts customers at risk of harm and the agency at liability." State and federal officials discovered approximately of $2.1 million in misspent Comprehensive Services Act money and $500,000 more misspent federal funds.

Similar audits found that Richmond may owe $671,000 and Roanoke may owe more than $10,000.

Created in 1993, the Comprehensive Services Act was designed to pool funding streams which purchased services for children and teens. The funds are then sent back to local governments based on the need calculated by local interagency groups. The state budget provides $328.8 million for the program in 2011 and $322.7 million for it in 2012.

The purpose of the Act was to ensure that services provided are consistent with state standards, to identify and intervene with young people at risk of emotional or behavioral problems, and to provide services targeting the unique needs of each youth.

Millie Harrison, chairwoman of both the Craig County Board of Supervisors and the social services board, pointed to the department's size of the root of the problem. The local department, composed of a director, an office manager, two social workers, and two eligibility officials, are called upon to monitor the large, rural county.

Susan Reese, director for the Piedmont Regional Office of the Virginia Department of Social Services, said that it did not appear any money was stolen. In fact, it appears the money was used on the youths for which it was provided, but that proper procedures were not followed.

The report cited a lack of case documentation and casework, disorganized office space, and failure to respond to emergency reports. It also found that county officials claimed reimbursements on ineligible expenses.

"The financial aspects of this agency are not being handled in a clear manner and do not meet VDSS guidelines. Personnel issues do not appear to be dealt in order to keep the organization running in a professional fashion," the report said.

The lack of organization in Craig County led to some cases getting ignored.

"We didn't find any occurrences where tragedies or crisis situations had developed, but because procedures were not in place, there were some incidents that went uninvestigated," said Reese.

The $2.6 million owed by the county may get smaller as the numbers are examined over the next few months.

Flora said that it would be "incredibly unfair" if the county was forced to repay money that reached its intended target, only through the incorrect procedures. He added that he would wait until communication from state and federal officials before taking action.

State auditors found that Pittsylvania County received $7.7 million in reimbursements for students ineligible for the CSA program. The audit found that the county social services department failed to follow proper procedures and policies. City auditors in Richmond found that inappropriate billing, voided checks, and unrecorded purchases led to a debt of $671,000 to the state and federal government. Auditors in Roanoke found that the city may owe over $10,000 because of overbilling and poor documentation.

The Associated Press contributed to this report.

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