Audit finds disabilities and special needs providers misapplied housing subsidies

COLUMBIA, SC (WSPA) – According to the SC Inspector General, people with disabilities were overcharged more than a million dollars in rent money. It’s a problem that a review by the state Department of Disabilities s and Special Needs and the SIG’s Office shows has been happening for years and the people it happened to may not know.

Officials began the review after allegations of improper application and accounting of Housing Assistance Payments by service providers under contract with DDSN. They are mostly county disability and special needs boards.

DDSN was first made aware of the issue in August of last year according to the SIG release.

DDSN contracted with the CPA firm Burkett, Burkett and Burkett to examine the individual providers use of subsidies in determining consumers room and board charges. The release said DDSN fiscal year 2013 and fiscal year 2014 would be reviewed.

When the audit was conducted, the first phase found 657 consumers received HUD subsidies and were served by 18 service providers. Burkett, Burkett and Burkett found 10 providers had significant misapplication of HAP funds.

The review showed that eight of the ten service providers used an averaging methodology to apply housing payments rather than treat each consumer individually.  It was found an individual with a higher HAP suffered a higher loss.

Recalculation of the 329 consumers impacted showed that overcharge amounts reached more than $1,264,245.

After the review, the SIG’s office recommended DDSN require the ten service providers to conform to the correct Department of Housing and Urban Development methodology for applying HAP benefits.

The office also recommended DDSN notify and create payment plans to make sure impacted customers receive any owed money. SIG office said they will conduct a follow-up review in 6-12 months.

DDSN agreed to require service providers to conform to the new policy. Room and board charges, we’re told, are being recalculated and a payment plan is being set up with individual consumers.

DDSN tells us the money will be paid back in no longer than three years. Payments may be spread out to ensure consumers aren’t disqualified for other benefits.