ANNAPOLIS -- Financial record-keeping at the state health department during the final three years Adele A. Wilzack was secretary was so sloppy that legislative auditors have given the department its lowest possible rating -- "very poor."
The third and final part of an audit of the secretary's office for Jan. 19, 1988, through Feb. 10, 1991,concludes that the health department's Division of Reimbursements:
* Failed to investigate as required by law whether the families or "sponsors" of people admitted to state mental or chronic disease hospitals had the financial resources to pay for some or all of their care. In some cases, the audit said, the investigations remained incomplete from five months to more than a year after a patient was admitted.
* Sometimes failed to obtain pre-authorization for reimbursement from patients' insurance companies, including cases in which patients listed the insurance company names on their hospital admission forms. In 10 such cases checked by the auditors, the state spent $176,183 on care that probably would have been covered by private insurers.
* Exercised "inadequate internal control" to verify that millions of dollars in cash receipts mailed into the department annually were fully deposited in state bank accounts, or to ensure that patient account records were not adjusted -- or improperly altered -- by the same people handling the billed collections.
The audit uncovered no specific losses in that regard. But the General Assembly's chief auditor, Anthony J. Verdecchia, said the opportunity for abuse was certainly there in anagency that processed cash receipts totaling $35.1 million during fiscal 1990 and listed $42 million in "accounts receivable" -- money owed the state -- as of Jan. 1, 1991.
"The exposure here is high," Mr. Verdecchia said. "You cannot necessarily make any conclusions as to what was in fact lost on an overall basis . . . but it is certainly a major accounts receivable system."
Ms. Wilzack, now executive director of a nursing home association, could not be reached yesterday for comment.
She resigned as secretary Feb. 4, 1991, under pressure brought about by a departmental scandal involving misuse of state and federal funds inconnection with an amateur athletic competition known as the Maryland State Games.
The State Games program was the subject of the second part of the audit, which was released in December. It led to criminal charges filed earlier this month against two former high-ranking health officials, including one of Ms. Wilzack's deputy secretaries.
Her successor, Nelson J. Sabatini, said, "I'm not disputing anything that is in the audit. I think there are some management problems."
But Mr. Sabatini said he had already instituted changes to correct problems identified in the audit, adding, "We're making progress."