Payment errors will cost San Luis Obispo County nearly $2 million

Underpayments to the state and overpayments to local public assistance recipients over the past decade will cost taxpayers nearly $2 million, county officials revealed last week.

In a quarterly report delineating the financial status of all county departments, the county administration revealed that:

Between 2001 and 2009 the county short-changed the state by $1,667,690 in payments of fines, penalties and other fees originating with the county trial courts and Probation Department.

The Department of Social Services overpaid recipients of its services by $237,066 between January 2003 and September 2010.

The shortfall to the state came to light in June and followed a state Controller’s Office audit. Trial court revenue is collected and categorized for distribution by the Probation Department and Superior Court, according to a staff report.

Assistant County Auditor-Controller Jim Erb, who has been working to fix the problem, said the state’s formulas for collecting who gets what percentage of the fees, and under what circumstances, are both changeable and “really, really complicated.”

The county quickly set up a “liability account” in June to deal with the payments, and the $1.667 million, which represents the principal, already has gone to the state. The state has not yet determined interest repayment and penalties.

Erb said his office has taken over penalty assessment disbursement from the Probation Department, and has invited the state to hold a workshop at which probation, trial court and auditor-controller personnel staff will learn the ins and outs of the state’s system.

“We’re disappointed,” Erb told The Tribune, “(but) we’ve got it on track now.”

Overpayments in the Department of Social Services occurred because of “administrative errors made by staff resulting from a miscalculation of benefits, or an incorrect interpretation of regulations,” according to a report from Leslie Brown in the county administrator’s office to the Board of Supervisors.

Some were calculation errors, Brown told supervisors, but at other times recipients “didn’t fully disclose everything” when applying for aid, and were later found out.

The problems arose in the food stamp, foster care, In Home Supportive Services, CalWORKS, and general assistance programs.

Supervisors wrote off the $237,000 as uncollectable bad debts.

DSS director Lee Collins said there are several reasons behind the request for “relief of accountability.”

“The main reasons we end up losing the ability to collect bad debt are death, bankruptcy and specific rules or court cases that proscribe any further collection activity,” he wrote in an e-mail to The Tribune.

“There also is a cost-effectiveness feature, where we figure that it costs more to chase a small debt than we ever would recoup by success.”