Friday, March 5, 1999

Hawaii State Seal

Auditor, Health Dept.
spar over privatizing

By Helen Altonn


The state auditor's office says it can't tell the Legislature whether direct adult mental health services being provided by the state Health Department should be privatized.

The reason, it says: Information isn't available to make an analysis.

"For example, the Adult Mental Health Division lacked reliable and complete data necessary to conduct a proper cost analysis," Auditor Marion Higa said in an audit released today.

"We found insufficient controls over the recording and tracking of staff time as well as inadequacies in the division's computer system," she said.

Health Department spokesman Patrick Johnston today said, "We encourage legislators to thoroughly review the department's response in order to get an accurate understanding of division operations."

In a letter included in the audit report, state Health Director Bruce Anderson said the department views privatization differently than the auditor. Also, it's economically desirable to work with a few private providers because of limited funding, he said.

He said when the department has attempted to restructure services, "we have been confronted by strong resistance to change." Employees feel they're being deprived of earning additional income through overtime if services are contracted, he said.

The Adult Mental Health Division receives about $19.5 million a year and spends about $7.4 million for services by private agencies, the auditor noted.

Last year's Legislature asked for a study to determine if other services provided by the division could be turned over to private organizations.

Higa said division efforts to manage contracts and coordinate with private agencies are inadequate and can't support further privatization.

"Contract monitoring is inconsistent, performance measures are inadequate for proper evaluation of contractors, and contractual requirements are not enforced," she cited among other deficiencies.

"Finally, the division's lack of proper operational plans contributes to a poorly integrated mental health system and ineffective use of private providers," she said.

She recommended the Health Department take steps to improve administrative practices.

Anderson said the department took "great exception" to a statement in the audit that the division created roadblocks to the auditors getting information.

He disagreed with a number of the findings and said corrective action is being taken in some areas. He said the auditor's recommendations will be considered in development of an operational plan to integrate all services.

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