INDIANAPOLIS | The perennially cash-strapped Department of Child Services paid $627,168.82 in late fees to vendors during the 2011-13 budget years, a state audit released Tuesday shows.

Under Indiana law, state agencies are required to pay a 1 percent per month penalty when the agency fails to pay for contracted goods or services within 35 days of receiving them.

DCS racked up late fees amounting to $330,525.61 during the 2011 budget year, $115,314.63 in 2012 and $181,328.58 in 2013, according to the audit.

Agency appropriations totaled $941 million in 2011 and $793 million in both 2012 and 2013.

Rick Peterson, chief financial officer at the child protection agency, said the rash of late payments primarily was due to DCS taking over the Family and Children Fund from local governments in 2009.

That money is spent on out-of-home care for abused or neglected children, community-based family and support services, family preservation services and family reunification services, according to DCS.

Peterson said the agency recently implemented a vendor payment website to reduce invoice processing time. The website also has minimized incomplete or erroneous billings by DCS vendors, which Peterson said contributed to the high number of late payments.

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As a result, he noted, DCS paid just $65,886 in late fees during the 2014 budget year, which ended June 30.

That still was the highest late fee total for any state agency and comprised 27 percent of the $240,668.14 in state tax dollars spent on late payment penalties last year, according to the state auditor's office.

DCS spending decisions have been the target of two recent lawsuits.

Two family case managers in DCS' Gary office sued the agency last month for back pay and penalties claiming DCS forced them to work unpaid overtime and through their lunch breaks for more than three years.

Their case is pending at the federal court in Hammond and could be expanded to a class-action.

DCS settled a separate lawsuit in September by agreeing to pay $15 million to 1,800 adoptive families of special needs children denied daily support subsidies they were promised in 2009.

The agency claimed no money was appropriated for the adoption subsidies during that period while at the same time returning $238 million in "excess" appropriations to the state's general fund.

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