Portland officials knew that a dozen long-term residents at the city’s homeless shelters had $20,000 or more in their bank accounts, but still sought and received state reimbursement through the General Assistance program, according to the LePage administration.

The fact that some shelter residents have significant savings was revealed Monday after a state audit accused the city of spending General Assistance funds for people who don’t qualify. City officials, meanwhile, said Portland has a longstanding and state-approved practice of assuming that anyone who stays at a shelter qualifies for the aid without making certain they meet the program’s strict financial eligibility requirements.

State auditors found the personal banking information about the “Top 30 Stayers” at Portland’s shelters in the city’s records, according to a spokesman for the Maine Department of Health and Human Services, which oversees the General Assistance program. “We did not subpoena these bank accounts,” David Sorensen said Tuesday.

The state’s audit report said that 13 of the 30 people who have stayed at the shelters the longest had at least $20,000 in bank accounts. One person had $90,000 in the bank, while another had roughly $161,000 in “liquid assets,” the report said.

Advocates for the homeless, meanwhile, responded to the audit’s findings at a news conference Tuesday.

The people who stay the longest in emergency shelters typically have a severe mental illness that prevents them from caring for themselves, and are not able-bodied people who are gaming the welfare system, the advocates said. Often, the residents have disability checks going into bank accounts that they don’t know about, don’t have legal access to or are controlled by someone else, they said.

“No one is staying in the shelters or languishing in the streets for years at a time to save money,” said Mark Swann, executive director of Preble Street, a nonprofit that provides assistance to the homeless. “Shelters are not places people want to stay at if they have choices.”

Swann said the state is oversimplifying the complex nature of homelessness, and that untreated mental illness and substance abuse are often the root causes of chronic homelessness. He said the fact that such people live in shelters, sometimes sleeping on floor mats or even in chairs, reflects the state’s failure to care for the mentally ill.

CITY DEFENDS LONGSTANDING PRACTICE

However, the legal issue being raised by the audit and the DHHS is not whether Portland should allow those people to stay at the shelter, but whether the city improperly billed the state for reimbursement through a safety net program intended for people who don’t have resources to shelter and feed themselves.

“We’re not saying there shouldn’t be homeless shelters,” Sorensen said. “Just don’t charge state taxpayers if these people have $20,000 or $90,000 in their bank accounts.”

Portland requires people to fill out only a short form when they enter a shelter. They don’t go through the more time-consuming screening process that’s done when someone seeks help paying rent or buying food, including a review of banking information.

DHHS officials raised concerns last year about the city’s so-called presumptive eligibility policy. The city disputed those findings, saying its practices were developed years ago in accordance with the DHHS under a different administration and had not been raised as an issue in any audit for 20 years.

The state did another audit on Jan. 20-21, and sent its initial findings to the city on Friday afternoon in a report that included details about how the city was allegedly seeking reimbursements for people who are not eligible. The findings became public during a City Council meeting Monday night.

FEWER REIMBURSEMENTS IN BANGOR

Some homeless shelters in Maine do not seek General Assistance reimbursements for every client who asks for a bed.

At the independent nonprofit Bangor Area Homeless Shelter, for example, clients who might qualify for General Assistance apply with the city, said Executive Director Dennis Marble. Only 35 percent to 40 percent of people who show up at the shelter ultimately qualify for General Assistance because of the strict eligibility requirements, not because the rest have disposable income, he said.

He said some people with severe mental illness might have access to income that they refuse to use. The fact that people with significant savings are staying in homeless shelters shows that the state isn’t taking proper care of its residents with mental illnesses, Marble said.

“To me, that’s a more significant story than 13 people with money in the bank who were staying at the shelter,” he said.

‘CHANGE IN PHILOSOPHY’ UNDER LEPAGE

Portland acting City Manager Sheila Hill-Christian said the state reimburses the city $24 per night for people staying at the Oxford Street Homeless Shelter, which has space for 154 adults. Reimbursement rates for the city’s Community Overflow Shelter and the Family Shelter were not immediately available.

She said previous state administrations reimbursed the city for shelter operating costs because of the large number of people served.

“The issue of reimbursement for individuals and determining eligibility is a result of the change in philosophy by this administration,” she said.

Hill-Christian said the city does not allow people to stay at a shelter if they have money and refuse to spend it on services that can stabilize their life. Others with money often cannot access it for various reasons, she said.

“In other instances, clients are determined to be good candidates for location into an apartment, for example, and we allow them to save money for a down payment,” she said. “Each circumstance is different.”

POTENTIAL LOSS OF MORE CITY REVENUE

If the city is unable to convince the state that its practices are in line with state statutes, it could lose a significant amount of state revenue, on top of possibly losing millions more because of other changes that the LePage administration wants to make to the General Assistance program.

In fiscal 2013-14, Portland spent $10 million for its program, 80 percent of which, $8 million, was funded by the state. Of that, $2.7 million paid for its shelter program. Hill-Christian said she has a list of recommendations for tightening up the program, but declined to provide details because it could compromise an appeal of the state audit and an ongoing lawsuit against the state about providing General Assistance to certain immigrants.

Portland Mayor Michael Brennan said Monday that he had spoken to Gov. Paul LePage and planned to meet with him soon regarding the General Assistance issues.

Brennan and Dawn Stiles, the city’s new director of health and human services, did not return calls for comment Tuesday.

COUNCILORS PLAN REVIEW, SEEK DETAILS

City Councilor Jon Hinck said Tuesday that he is concerned about the audit’s findings, and the LePage administration’s public criticism of the city’s welfare programs. Everyone should agree that General Assistance should be given only to those people who qualify, Hinck said.

“I am dismayed with the administration’s way of going about this – with cannon fire,” he said. “On the other hand, I am not satisfied with the dearth of information and answers I have been given as a city councilor on how these programs are administered.”

Councilor Edward Suslovic said the Public Safety, Health and Human Services Committee, which he chairs, will discuss the audit March 10. Underlying issues of homelessness, such as mental illness and substance abuse, need to be addressed, Suslovic said, and perhaps General Assistance is not the program to do that.

Two residents of Portland’s emergency shelters, 51-year-old Melanie McInnis and 22-year-old Travis Durr, were surprised to hear Tuesday that some long-term shelter residents had tens of thousands of dollars in the bank and that General Assistance funding should not be used on them. Their views softened, however, when they learned that those people may be mentally ill.

Staying at the shelter is not something people would do by choice, Durr said. Sleeping on a mat on the floor only 6 inches from other people is “nothing short of horrible,” he said. “It’s uncomfortable being able to smell someone’s body odor and having people … snoring all night.”