Members of the state Senate Finance Committee will receive a briefing Wednesday from health department officials on how the Developmental Disabilities Administration failed to spend $34.5 million in state and federal funding at the same time the department has a long waiting list for its services.

The committee wants to know from Department of Health and Mental Hygiene Secretary Joshua Sharfstein how an accounting irregularity occurred and what department officials are doing to fix the problem, said Sen. Thomas M. Middleton (D-Dist 28) of Waldorf, the committee’s chairman.

In addition, Sharfstein and DDA director Frank Kirkland will appear at a town hall meeting Wednesday night in Anne Arundel County to address the unspent money.

DDA officials first became aware of the unspent money in July, as they closed out the department’s fiscal 2011 books, said Kirkland, who took the reins of the department Aug. 1. The 2012 fiscal year began July 1.

The closeout revealed $25.7 million in unspent state funding and $8.8 million in unspent Medicaid reimbursement money from the federal government, Kirkland said.

Although the accounting irregularity came to light at the end of fiscal 2011, the unspent money was from fiscal 2010, he said. Because the state money was more than one year old, by law it had to go to the general fund, Kirkland said, adding officials were able to forward the federal money to this year’s DDA budget.

Officials still are not sure why or for how long the unspent money had accrued, Kirkland said.

“That money had been built up and built up and hadn’t been looked at closely,” he said. “We’re still trying to get to the bottom of what happened.”

In October, the department hired a new acting chief financial officer, Gerald Skaw, to “help put practices in place to prevent this kind of thing from happening again,” Kirkland said.

The Finance Committee has thrown its support behind ensuring the department has the funding it needs to operate effectively and reduce its long list of those waiting to receive services from DDA, Middleton said.

Given the waiting list for services, and the fact the General Assembly passed an increase in the alcohol tax from 6 percent to 9 percent this year, in part to reduce DDA’s waiting list, the unspent money is a cause for concern, he said Monday.

In the meantime, Montgomery County Del. Kirill Reznik (D-Dist 39) of Germantown, who serves on the House Health and Government Operations Committee, sent a Nov. 22 letter to committee Chairman Del. Peter Hammen suggesting the House committee also conduct a briefing with DDA officials on the unspent money.

“It’s shocking to me that a penny was left on the table — that it didn’t go to these families that need these services,” Reznik said, adding about 4,000 people are on DDA’s waiting list for services.

Hammen (D-Dist. 46) of Baltimore could not be reached for comment.

Sharfstein and Kirkland will conduct their town hall meeting at 6 p.m. at Woods Memorial Church in Severna Park.

skelly@gazette.net