Audit: DHHS skipped child abuse registry check on adoptive parents, overpaid for many Medicaid services

An annual audit of North Carolina’s compliance with federal human services programs uncovered significant issues at the state’s health agency, including overpaying for Medicaid services and skipping a background check for adoptive parents.

The audit released on March 31 found problems with nearly every program they checked at the N.C. Department of Health and Human Services, from administration of the federal food stamps program to Medicaid billing and neglecting to spend a federal grant to help AIDS and HIV patients.

DHHSA DHHS spokeswoman said the agency has worked under in recent years under Secretary Aldona Wos to improve the management of federal programs, and plans on addressing the issues highlighted in the audit.

“The department has made significant progress improving its operations over the past two years and we continue to value the role that audits can play in further enabling us to do so,” DHHS spokeswoman Alex Lefebvre wrote in an emailed response to questions. “This annual audit will be used by the department to continue on the path of improved effectiveness.”

There were other findings that didn’t point to wasted money, but may have put children’s safety at risk.

The N.C. Department of Health and Human Services didn’t check to make sure prospective adoptive parents were clear of prior abuse allegations, by checking a registry of abuse and neglect allegations.

“The Department did not monitor that the child abuse registry was checked before a child was placed for adoption,” the federal compliance audit stated. “As a result, children could be placed in an unsafe environment.”

DHHS, in the response contained in the audit, said it thought county-level officials had ensured the abuse and neglect check had been done. Criminal background checks were conducted.

The state agency has seen several high-profile child abuse cases in recent years, including the disappearance and suspected killing of 13-year-old Erica Parsons by her adoptive parents, who had been investigated previously for abuse. Parsons was last seen in 2011, and a federal judge said last month said he believes Erica Parsons was killed by her adoptive parents, who were sentenced to prison for fraud conviction unrelated to the teenager’s disappearance.

In Union County, an 11-year-old boy in the care of a former child protective services supervisor was found in November 2013 by a sheriff’s deputy chained to a front porch of a home with a dead chicken around his neck.

The DHHS audit also found:

  • Nearly $240,000 from a $2 million federal grant to help those with HIV and AIDs and early intervention programs went unspent and money was returned to the federal government.
  • DHHS overpaid hospitals by $12.9 million in Medicaid disproportionate share payments, money that auditors said could have been used to reduce the overall cost of the program.
  • A 24 percent error rate, and overpayments of $465,000, were uncovered in a sample of 66 Medicaid provider claims it looked at. The state processed 110 million claims last year, for $10 billion worth of services.


You can read the entire audit here.


  1. Sally Sue

    April 8, 2015 at 10:06 pm

    Still think we should expand Medicaid? Putting private insurance companies in charge of the healthcare dollars would probably save a few billion dollars! Secretary Aldona Wos is in way over her head with this mess!

  2. love my state

    April 9, 2015 at 8:57 am

    actually a single payer medicare for all system is what we need. private insurance companies are the last thing that we need in this mess.

  3. david esmay

    April 9, 2015 at 9:42 am

    Sally Sue, medicare is cheaper, more efficient, and the admin costs are a fraction of the cost of private insurance, which can be as high as 30%.

  4. Morning Post for April 9, 2015

    April 9, 2015 at 9:51 am

    […] • DHHS Audit Findings: A recent state audit of the department found a number of flaws including overpayments to hospitals, forfeiting $240,000 in federal grant money for HIV/AIDS programs and a whopping 24 percent error rate in billing in a study sample of records. Read more. […]

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