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Audit: State Workers Claimed Ineligible Spouses, Dependents On Insurance

Last updated on Thursday, March 14, 2013

(INDIANAPOLIS) - The Indiana Attorney General’s office is seeking to recoup more than $31,000 in alleged ineligible insurance benefits by state workers.

Kara Kenney, of RTV6 reports, the Indiana Inspector General's office released more than a dozen reports this month questioning insurance practices of some state employees, specifically eligibility of dependents and spouses.

The State Personnel Department hired Aon Consulting to do a 2010 audit, which uncovered 146 individuals were inappropriately enrolled as dependents with a $345,048 adverse fiscal impact to the state's plan.

The audit itself cost $146,920, according to SPD spokesperson Ashley Hungate.

The Call 6 Investigators requested an on-camera interview with the State Personnel Department, but Hungate declined.

SPD has yet to provide a copy of the audit report or summary.

Although many state workers have repaid the money questioned in the outside audit, the Attorney General's office is still seeking to recoup from several state workers.

An Inspector General's report questioned $18,551.05 in benefits by Cortney Mallory, a former family case manager with the Department of Child Services.

The Inspector General found Mallory's spouse and her son were never eligible dependents on his state-sponsored benefits plans, but the state paid $18,551.05 in medical, prescription, dental and vision claims on their behalf.

"SPD followed up with the Employee and learned that he and his spouse had never been legally married," read the Inspector General report. "However the Employee believed their relationship constituted a common law marriage under the laws of Oklahoma at the time they resided in the state."

DCS terminated Mallory, but he appealed with the State Employees' Appeals Commission.

On February 4, Chief Administrative Law Judge Aaron Raff ruled Mallory was improperly terminated and should be reinstated with lost wages and benefits.

DCS spokeswoman Stephanie McFarland told RTV6 Mallory has accepted employment elsewhere outside of state government.

Meanwhile, the Marion County Superior Court entered a default judgment against Mallory for $18,551.05.

"Mallory has paid nothing yet and we have pursued this as a collections case," wrote Bryan Corbin, spokesman for the Office of the Indiana Attorney General, in an email to RTV6.

The AG's office has also issued a demand letter to former FSSA worker Brenda Downey for $12,880.89.

Downey's grandchild was covered as an ineligible dependent, racking up thousands of dollars in claims.

Downey received a letter of reprimand and retired from FSSA in March 2011.

She is making regular monthly payments to reimburse the state, according to the Attorney General's office.

The AG's office is also pursuing $284.42 still owed by an Indiana Department of Correction employee for failing to report his divorce to SPD within 30 days.

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