Columbia -- Testimony by a top official for former Gov. Mark Sanford on Wednesday left lawmakers with the impression that the previous administration encouraged her to mislead budget writers about the true costs to run the Medicaid agency.
The testimony by Emma Forkner, the former director of the state Department of Health and Human Services, shook the Legislature as South Carolina continues to grapple with stagnant tax collections that aren't producing enough cash to manage basic government services.
Forkner said she dealt with Sanford's former chief of staff, Scott English, on the agency's finances. English did not attend the Senate hearing where Forkner testified, but he told The Post and Courier that he did not tell Forkner to deceive lawmakers about the costs of running her agency.
Senate President Pro Tem Glenn McConnell, R-Charleston, said he wants to hold more hearings to find out who is telling the truth. He ordered an investigation of the $228 million agency deficit by a Senate panel, which took Forkner's testimony.
"I am determined to find out who knew what and when," McConnell said. "This deficit is intolerable and it stinks. I intend to get to the bottom of it."
Gov. Nikki Haley said late Wednesday that she hadn't spoken to Forkner, nor had she been briefed on her testimony, but the new Republican governor said she has recruited lawmakers to sign off on an audit of the Medicaid agency by the independent Legislative Audit Council to solve the budget mess.
Haley replaced Forkner with Tony Keck, a former Louisiana state health care official. The South Carolina Health and Human Services Department is part of the governor's Cabinet.
Forkner testified that she knew the agency would run a deficit in June 2010, after the Legislature passed its budget and some of Sanford's vetoes were upheld.
Sen. Vincent Sheheen, D-Camden, helped lead the subcommittee meeting where Forkner's testimony was taken. Sheheen lost to Haley in November.
Sheheen said Forkner's testimony led him to the conclusion that Sanford's staff and Cabinet didn't come clean on what was needed to run the state's Medicaid program.
Sheheen said Forkner testified that English, Sanford's chief of staff, told her to base her budget request at a lower rate than the Medicaid program actually was growing by, meaning that it would be more expensive to run the agency than was being disclosed to lawmakers. Lawmakers write the budget.
Forkner told the senators the agency lost $780 million since the recession began with budget cuts and transfers the Legislature made from the Medicaid savings accounts to other areas of government. The agency's deficit was caused by the loss of those funds combined with the dramatic Medicaid growth, she said.
Medicaid enrollment is up more than 114,000 people since December 2007 to 975,000 people, meaning one in five South Carolinians is now on Medicaid.
Sheheen said the budget request made to lawmakers reflected a 4 percent growth rate in Medicaid. The actual numbers show Medicaid grew 13 percent since 2007, three times the rate lawmakers were told.
She said the agency was headed toward a deficit as soon as the budget passed last summer. Forkner said she notified the governor's office immediately and was told, "That it would work out."
Sheheen asked Forkner, "Did the governor's office force you to project a lower number than what you thought?"
Forkner said: "I followed the directions. How about that. How about I just say that."
Sheheen said the testimony was disturbing. "It was clear to me that the governor's office knew it was going to be out of balance and had no plan to deal with it," Sheheen said.
English, who is now chief of staff at the Department of Education, said the budget for the Medicaid agency was drafted by Sanford's staff using the agency's base request and building in cost savings and spending limits. The staff then would give Sanford the details, and his door was open to agency officials, English said.
English said he did not recall Forkner sounding alarm bells about the budget request except once. Forkner told English in April 2010 she needed $67 million more, and Sanford's staff told her go ahead and make the request to the Senate Finance Committee, English said.
"We gave her the green light."
Reach Yvonne Wenger at 803-926-7855, or follow her on Twitter at @yvonnewenger.