State Error Forces County to Cover Funds

The state government shortchanged Ventura County nearly $1.5 million due for social services, forcing county officials to scramble for money on Tuesday to cover welfare checks to 8,700 families.

A state official said an accounting error last week resulted in a $40-million shortage to counties across the state and was unrelated to the state’s current financial crisis.

But county officials fear that it will be the first of many funding shortages from the state, which is struggling with an $11-billion budget deficit. They say state officials never warned them of the inadvertent shortfall, which was discovered Friday after the welfare checks had already been delivered to the post office.

To ensure that the poor received their checks on time, county Auditor and Controller Norman R. Hawkes authorized an advance from the county’s general fund to cover the shortage.

With a promise from the state Department of Social Services to repay the money within two weeks, the Board of Supervisors ratified Hawkes’ decision to advance the funds on Tuesday.

Hawkes said if the funds had been requested to keep a bridge-building project on schedule or for some other less essential need, then he would have withheld funds.

“We’re dealing with people who have bills to pay and rent to pay (and) food to buy,” Hawkes said. “We are talking about a very critical segment of our society being able to take care of daily needs.”

Only twice before in Hawkes’ 28 years with the county has the state threatened to withhold or reduce the amount paid for state-mandated programs such as welfare.

But both times--once in the 1970s and again in the 1980s--Hawkes said the county had been notified of the shortage ahead of time. And in both cases, Hawkes refused to make the advance and the state sent the money through at the last minute.

Hawkes said as the state’s huge budget deficit and resulting financial problems continue to grow, the county can expect more state funding shortages.

“The state is in the process of borrowing $750 million to cover expenses through the end of the (fiscal) year, and that will only take them through June,” Hawkes said. “Come July, we will have the same problem again.”

In addition to welfare, there may be shortfalls to other state-mandated programs, including the county’s health-care program for the poor and the county’s trial courts, Hawkes said.

Richard Wittenberg, the county’s chief administrative officer, called the shortage to counties statewide “inappropriate and unfair.”

“They are asking us to be their bank,” Wittenberg said. “At a minimum, we lose thousands of dollars in interest. Those two weeks of interest paid by all the counties is very beneficial to the state.”

Wittenberg said the shortage also sets an alarming precedent.

“Our Board of Supervisors is sympathetic to the plight of people on welfare and their need for their checks, and that’s what the state is counting on,” he said.

But Dennis Boyle, deputy director of administration for the Department of Social Services in Sacramento, said last week’s $40-million accounting error was a simple problem of miscalculation.

“We send money to counties twice a month for AFDC checks based on an estimate of what is needed,” Boyle said, referring to Aid to Families with Dependent Children, the largest welfare program. “It appears we simply made an error in the estimates.”

But Boyle added that unless the Legislature passes a new budget before July 1, an event considered very unlikely, the state will send out IOUs instead of checks to cover July 15 payments.

At that time, it will be up to the counties to front the money to welfare recipients and submit their IOUs to the bank for reimbursement, Boyle said.

Supervisor John K. Flynn said Tuesday that the board could not guarantee that the county will cover another shortfall.

“It would take a lot of thought before we would do it again,” Flynn said. “We would be allowing the state to establish our spending priorities.”

Flynn also warned welfare recipients that the shortfall is a signal of possible future reductions in their benefits.

“People who receive welfare checks should be alerted that the future for them doesn’t look too good,” Flynn said. “There are going to be some cuts.”