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Erik Burgess, Published February 11 2014

Clay commissioners look to write off 'bad debt' from years of unpaid social services bills

MOORHEAD – With decades of unpaid bills for alcohol detoxification services stacking up, Clay County is owed millions of dollars that it might never actually see.

The county’s Social Services Department is due $2.4 million from years of unpaid detox bills and about $1.6 million in public assistance dollars from years of overpayments or fraudulent claims.

But some of those bills will likely never be paid, social service officials told Clay County commissioners during presentation on Tuesday.

Commissioner Kevin Campbell, who chairs the county board, said he wants to make writing off this “bad debt” a priority.

“We can’t just let this lie,” he said. “I’m glad it was brought forward and questions were raised.”

Some of the detox debt goes back to 1989 or 1990, but it stays on the books because the county doesn’t have a policy that allows it to write off the debt, said Rhonda Porter, director of Social Services.

Sometimes the payments are nearly impossible to track down and will likely never be collected, said Sandy Thorne, the county’s collections services supervisor who oversees fraud investigations.

“When they go to detox, they don’t give their true name. They don’t give their Social Security number or correct address,” Thorne said. “So we’ve got money on the books for people that we really don’t know who they are.”

Some insurance policies will pay for detox. Otherwise, the county will attempt to bill the person directly unless that person has a low income and is on a state health care program, Porter said.

The county also has to attempt to collect money from people who were given too much public assistance from the state, or if they were given assistance after fraudulently applying for assistance.

In the case of suspected fraud, the county can forward the case to the county attorney for possible criminal prosecution.

But if the state makes an error and overpays, the recipient is expected to pay that money back.

In many cases, though, recipients of public assistance are working-class poor, and may have already spent the money by the time the state notices the error, Thorne said.

“These are people that don’t necessarily have the means to repay their debt at $100 a month,” Thorne said. “A lot of it is $10 a month or $20 a month, whatever is affordable.”

The state does have a write-off policy for its public assistance overpayment debt, but Porter said the county isn’t sure how much of that debt on the county’s books is old. She said the county plans to request a more detailed report from the state.

County Commissioner Frank Gross seemed particularly concerned about the amount of public assistance debt shouldered by the county.

The $1.6 million the county was due in 2013 is about $300,000 higher than the amount due in 2012.

Gross questioned the effectiveness of county staff when approving public assistance applications, asking: “Who’s qualifying these people for this assistance?”

Commissioner Wayne Ingersoll said applicants have to meet all of the criteria when they apply.

“It’s only afterwards that you find out that there’s some fraud involved or they’ve given you false information,” he said.

Money owed from unpaid detox services dropped from $2,414,754 in 2012 to $2,408,424 in 2013.

Porter said the county needs to look at both applicant error and internal error. She said her office has had a 40 percent staff turnover in recent years, which could have led to some inefficiencies and a learning curve for the “very complicated” social services applications.

She said other counties are likely experiencing similar issues with growing overdue payments.

“We need to go into this a little bit deeper and find out why this is happening,” Campbell said.

In order to create a county write-off policy, Thorne said criteria need to be established to determine what bills are “uncollectable.” For example, if someone used Clay County’s detox years ago and didn’t give an accurate Social Security number, that case could be written off.

The detox is locally funded, so indebted dollars collected from those services would go back to the county, Porter said.

Public assistance programs are state and federally funded, so the county would collect the debts, keep a percentage of it in some cases, and then send the rest to the state.

Readers can reach Forum reporter Erik Burgess at (701) 241-5518