The Legislature must decide who has accountability for state money sent to counties if Utah is to avoid financial problems like the fiasco at Timpanogos Mental Health Center, the state's social services director says.

"We've got a two-headed monster with the money that is passed on to local authorities in mental health, alcohol and drugs and aging," Director Norman Angus says. "We have state division boards responsible for setting policy and local county commissions setting policy."Until ultimate authority is determined, he said, no one thoroughly monitors the programs, and there is potential for mismanagement of funds.

"Timpanogos was a real blow. It just casts a big shadow over the credibility of the entire social service system," Angus said. "I approach this Legislature with real concern that they'll say mental health must have been overfunded because look at how much money they were able to bleed off."

The former director and several staff members at Timpanogos were accused of taking $3.5 million in contracted funds for personal use over the past three years.

"If we decide to just pass through money to the counties and let them set policy, then the role of the state is to back off from the limited oversight authority we have and just assure the money is spent in the proper programs," Angus said.

"If the state has responsibility, we need to get actively involved setting policy and developing programs across the state that are flexible enough to meet the needs of the community."

One of the weakest points in the Social Services Department is the contracting process where Social Services divisions contract with private agencies to provide programs, Angus said, and forming an inspector general's office within the department could be a possible solution.

"We need someplace to refer complaints that is separate from the divisions," he said. The inspector general also would set the entire department's contracting policy.

"We talk about a free-market system for contracting, but social services really don't fit in that. There aren't a lot of providers begging to build a group home for the mentally retarded," Angus said.

The department also needs to re-examine its service delivery system to make sure it's operating the most efficient and accountable way possible, he said.