Gov. John Hickenlooper’s troubled human services agency failed to meet a federal requirement regarding the state’s cash assistance program for the poor, a misstep that may cost the state $4.8 million.
The U.S. Department of Health and Human Services requires that 50 percent of the Colorado Works participants engage in work activities, such as job training and education programs.
But in fiscal year 2012, the most recent year audited, Colorado’s overall rate only hit 23.8 percent — prompting federal authorities to threaten the hefty penalty in a letter to state officials, according to new documents obtained by The Denver Post.
The potential sanction against the state’s Department of Human Services — the second discovered in recent months for failing to meet federal standards — only escalates questions aimed at director Reggie Bicha, who is under fire from lawmakers and advocates for repeated miscues.
A week ago, Bicha ousted one of his top lieutenants, Viki Manley, after a controversy involving her oversight of the state’s regional centers for people with disabilities, although questions remain about whether she merely took the fall for the agency’s problems.
Hickenlooper continues to stand behind Bicha. In an interview Thursday, the Democrat said the latest setback “at least so far as I know, doesn’t affect my opinion of Reggie Bicha for sure.”
But at the same time, he agreed the federal government needs to set tough requirements. “We do have to set pretty high standards in terms of how many of these folks … we are able to get into jobs,” he said.
Bicha’s office informed key state lawmakers about the failure to meet the work participation rate soon after receiving the federal sanction letter dated May 28. The communication represented an improvement the director promised, but the agency didn’t make the letter public until a records request.
Days before the notice, lawmakers were angered when taken by surprise with a Denver Post report revealing that the state faced a roughly $1 million sanction for misspending food assistance money after it violated federal rules.
Rep. Dave Young, D-Greeley, said he appreciated the heads-up about the potential problem, but “there’s a question still lingering as to how long ago did the department know they were going to be out of compliance on this.”
Bicha’s department, Young said, should have known closer to fiscal year 2012 that it didn’t meet federal requirements for work participation. “You raise the red flag then. You don’t get taken by surprise at the end of May in 2015 and all the sudden you’re on the hook for a potential fine,” he said.
In terms of the Colorado Works program, state officials are bracing for more bad news. Levetta Love, the director of the agency’s Office of Economic Security, warned a lawmaker in a letter this week that the state is not likely to meet its target in fiscal years 2013 or 2014.
In an interview Thursday, Love said this is the first time the state failed to meet the requirements for the Temporary Assistance for Needy Families program, known as TANF.
In prior years, the state managed to dodge a penalty by showing how much state and local money went to help the unemployed poor. But state data show that the work participation rates for Colorado’s program have remained near 30 percent or below for Bicha’s entire tenure.
Love attributed the low work participation rates to a shift to two main factors: the federal government made it easier from 2009 to 2011 for states to meet the requirements amid the economic downturn, and an increase in caseloads amid the recession.
In the letter, federal authorities raised concerns about why the state spent just 1.5 percent of its TANF money and related funds on activities connected to work.
Love questioned how the federal government tracks Colorado’s program, suggesting the state’s efforts to get 10,000 participants into jobs since 2013 are not entirely reflected in the numbers.
“We recognize that the activities associated with the work participation rate are essential, some of them, if an individual is going to gain employment,” she said. “But totally focusing on the hours a person engages is not necessarily resulting in employment. … Our goal is employment entry, retention and wage progression, which then is the definition of economic security or self-sufficiency.”
The department plans to dispute the $4.8 million penalty and submit a corrective action plan within the 60-day deadline, which is next week.
Twenty-three states didn’t meet the 2012 requirement, Love said, and a small portion in the past were forced to pay the penalty, while many others saw it reduced.
Even before the most recent problems with federal compliance became public, frustrated lawmakers demanded leadership changes at the agency. Bicha’s announcement of Manley’s resignation July 15 is the first major change at the top of the department.
The move came a month after a state report found human services officials disregarded state policy and federal law when it strip-searched 62 people with disabilities at 11 state facilities.
The centers were managed by Manley as the director of the Office of Community Access and Independence. Manley, who did not return a message left at her home Thursday, told CBS4 this week that she was forced to resign or be fired. She suggested in the report she was a scapegoat for the recent problems in the agency. For lawmakers, the situation only raises more questions.
“Is she the one that is at the core of the problem here, or are there others?” Young asked. “Was she really accountable, or is she the fall gal? I guess that’s yet to be seen.”
John Frank: 303-954-2409 or jfrank@denverpost.com