Friday, December 08, 2006

The Price of the Colorado Computer Meltdown Continues to Rise

Remember the Welfare computer meltdown in Colorado... well, it seems it's the gift that keeps on giving, even after two years have passed.

CBS4: Welfare Payment Mistakes Cost Millions
Colorado System Possibly Overpaid $98 Million

(Click on the above link to watch the video of this report)

Brian Maass

(CBS4) DENVER CBS4 has learned Colorado taxpayers will probably have to pay millions of dollars to solve problems with the state's welfare system. The Colorado Benefits Management System (CBMS), installed more than 2 years ago, has been making more than 11,000 mistakes in an average month.

Critics of the CBMS called the new figures shocking and said it was unlikely taxpayers will ever get the millions of dollars in overpayments back.

"We've always known there were overpayments gong on, but these numbers are new to us also," said Susan Beckman, an Arapahoe County commissioner.

"This is completely unacceptable," said Tom Mayer, a Boulder County commissioner.

CBMS is used to manage the welfare payments for food stamp recipients, the elderly and poor.

"And if we continue to generate claims and overpay people, it's just throwing money away," Beckman said.

CBS4 learned that in the month before the CBMS was installed, there were 349 claims, or overpayments statewide.

In October of 2006, there were 11,300 mistakes and potential overpayments.

State figures show there may have been more than 234,000 suspected overpayments to welfare recipients in the 2 years since CBMS went live. That could account for $98 million lost.

"This system is not fixed, it is not getting significantly better," Beckman said. "We need to pour more resources into it so we stop handing out free money that really people aren't entitled to."

The state said it is unclear how many of the $98 million in claims have legitimate explanations and how many are actual overpayments.

"We will acknowledge we have a major issue to address and we are going to do what federal law requires us to do," said Liz McDonough, spokeswoman for the state Department of Human Services.

Federal law requires the state and counties to seek reimbursements over overpayments. Counties said it will cost millions of dollars to hire more people to sort through claims and figure out what was an overpayment and what was not.

County administrators think it is unlikely they'll be able to collect overpayments from poor and transient welfare recipients.

"If you don't fix the system, it's like pouring water into a bucket with a hole in it," Beckman said. "In 2 years, you'll have paid out another $98 million in taxpayers money and that's not right."

Before CBMS, annual overpayments to welfare recipients in Colorado totaled about $1.5 million a year for 30 years.

County human services departments estimate that over the next 2 years, they will need another $7 million to hire 180 people to work full time to go through the hundreds of thousands of overpayments and figure out which ones are worth trying to collect.