The Department of Health and Social Services saved more than a million dollars last month when it paid a $1.7-million fine due the federal government for failing to provide adequate security for medical record that were stolen. Commissioner Bill Streur says he was faced with an option from federal officials who said the state faced a three and a half million dollar fine – but offered to settle for half that amount if the payment would come immediately. Streur said he had to look hard to come up with the money — since it had not been included for that purpose in this year’s budget. However, he found it in Reserves that would have been reported to the legislature in next year’s budget.
We were awarded several bonuses this past year for performance in our CHIP program, performance in our food stamp accuracy. And those reserve which end up showing up in a supplemental that is submitted for the next legislative session provided the funding for that. The majority of it was general fund and we will have to submit an amendment with it.
He says a large amount of the fine came from money the legislature directed toward computer security measures the Department found it could not immediately use.
Streur says no departmental program has been short-funded in order to pay the fine.
Normally, judgments, fines and settlements are taken before the legislature for final approval before any payment is made. However, because of the savings involved, the Department is getting praise from legislative sources over this transaction. Anchorage Republican Mike Hawker is chairman of the Legislative Budget and Audit committee. He praises the savings and says the process is not unheard of.
That’s a multi-Billion dollar operation, and it’s not that difficult at all for them to come up with $1.7-million to resolve this judgment – as unfortunate as the circumstances behind it might be.
Hawker says next year’s legislature will have a chance to ratify the expenditure during the normal budget process.