Widespread problems at the state's Developmental Disabilities Administration cost taxpayers millions of dollars over the past two years, an audit released Friday said.
The agency failed to collect $5.5 million in federal funds because it did not file the proper forms, improperly spent $600,000 on motor vehicles, and overpaid $400,000 for services that it never attempted to recoup, the audit found.
State health officials said they agreed with the audit's conclusions and were striving to improve.
"The report that came out today continues to point to the structural and underlying challenges of the administration," said Patrick Dooley, chief of staff to the state health secretary, who recently was appointed acting director of the DDA. "Those are things we are actively trying to address."
Among the audit's findings:
•In 2011 and 2012, officials failed to seek federal reimbursement for some services, costing taxpayers $5.5 million.
•The agency never recovered another $800,000 in Medicaid claims that should have been paid by the federal government.
•Administrators spent $610,000 to buy 23 motor vehicles for clients without evidence that they were eligible for the emergency help.
•The state agency failed to bill local jurisdictions at least $1.4 million for services.
In a report Dooley released this week, the agency pledged to make "fundamental changes."
"Weaknesses in DDA's overall fiscal management structure and a failure to have stable, standardized, and well-documented processes has led to the inconsistent application of policies and uncertainty regarding the validity of fiscal data," the report said.
Dr. Joshua Sharfstein, the state secretary of health and mental hygiene, told auditors their findings were "consistent with our own internal assessment of the long-standing weaknesses of this agency."
Last month, Sharfstein wrote an opinion piece in The Baltimore Sun stating that he was overhauling the disabilities administration. He cited Dooley's hiring as a first step to correcting the dysfunction.
The state also hired a "national firm with experience turning around agencies that serve individuals with developmental disabilities," Sharfstein wrote. "This new team is capable of identifying and understanding the many challenges facing our system and taking action to address them."
The DDA has a budget of nearly $1 billion and helps about 8,000 Marylanders a month live in long-term care facilities or receive services at home. Nearly 5,000 people receive help with employment and about 7,000 receive other support services, according to the agency.
Friday's audit was the second time in recent weeks the state's health department has come under fire from financial analysts.
Last month, a federal investigator reported Maryland's Medicaid program had a 95 percent error rate in seeking reimbursement for room and board for the developmentally disabled and thus owes the U.S. government nearly $21 million.
The inspector general for the U.S. Department of Health and Human Services said that over a three-year period, state health officials routinely billed the federal government for room-and-board costs that were ineligible under Medicaid rules. Medicaid is a joint federal-state program to pay for health care for the poor and disabled.