HARRISBURG - Pennsylvania's elected fiscal watchdog Thursday blasted the state Department of Public Welfare for what he called mismanagement of outside vendors that disrupted the paychecks of thousands of home care workers and the lives of many of the disabled people they serve.
The audit report released by state Auditor General Eugene DePasquale focused on the department's consolidation of payroll services early this year from 36 vendors to a single vendor and the ensuing confusion.
At least 4,000 of the workers, whom DePasquale described as independent contractors who earn $8 to $15 an hour, went without paychecks for weeks or more.
"We're talking about people that work very hard (from) paycheck to paycheck," he said.
In some cases, workers did not receive pay for up to four months, DePasquale said.
"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 (taxpayers) at least $7 million more per year," DePasquale said.
Public Welfare Secretary Beverly Mackereth issued a statement apologizing for hardships experienced by participants or workers, but said the changes were necessary to fix "an ineffective, outdated financial management system that varied by region and varied widely in quality."
"Nobody should have gone without service, no one should have gone without payment," she said in an interview.
More than 19,000 home care workers provide Medicaid-paid home-care services, such as assistance with bathing, meal preparation and providing breaks for caregivers so that disabled people can continue living in their homes.
"It is a lifeline for thousands and thousands of Pennsylvanians," said Neil Bisno, president of the United Homecare Workers of Pennsylvania.
The auditors said the department did not adequately monitor the vendors from 2009 to 2012 - a period that spans the Rendell and Corbett administrations - and tolerated violations of laws, regulations and financial standards for years.
DePasquale said department officials "took the easy way out" when they awarded the consolidated contract for payroll services to Boston-based PCG Public Partnership LLC, effective Jan.1.
The audit report said the Department of Public Welfare's procurement process was unfair because it carried anti-conflict-of-interest restrictions that barred proposals from certain former vendors that might have submitted lower bids.
It said the department gave an $18 million cash advance to PCG Public Partnership, even though it told other vendors an advance was not an option. Negotiations over the advance shortened the transition by two months and made it chaotic, the audit report said.
"At this time, we are happy to report that the financial management system is running smoothly and that valid time sheets ... are paid within two weeks of submission," Mackereth said.
A voice mail left at PCG Public Partnership's headquarters was not returned Thursday.