Fairfax County Supervisor Patrick S. Herrity has requested that the board’s auditor examine the financially troubled Fairfax-Falls Church Community Service Board.

Herrity (R-Springfield), in a May 25 letter to the Auditor of the Board, said county officials should specifically examine whether the Community Services Board’s decision a few years ago to handle private insurance reimbursements directly for its clients resulted in money wasted rather than saved. Herrity’s letter suggested that difficulties in Fairfax County obtaining reimbursement in the Infant and Toddler Connection program could account for as much as $400,000 to $900,000 of the agency’s $8 million budget gap.

“We need to determine the scope of this problem from both a process and financial perspective, as well as what processes need to be changed immediately in order to ensure that the CSB is not unnecessarily wasting money, considering their looming budgetary problems,” Herrity wrote to Michael B. Longhi, who is Auditor of the Board. Longhi’s office answers to the supervisors.

George E. Braunstein, executive director of the CSB, said he welcomed the audit.

“It does make sense because it was something that we need to analyze ourselves,” Braunstein said Tuesday.

The Community Services Board, also known as the CSB, is reducing services, shrinking staff and searching for other ways to cut costs in the face of a shortfall that is projected to widen to nearly $9.5 million. At a time when need for social services has skyrocketed and federal and state funding has slowed, Fairfax County has been forced to assume a greater responsibility for funding the agency, including a $4.2 million reserve set aside for fiscal 2013, which begins July 1. More drastic cuts in services are under consideration.

Herrity said his request for an audit was prompted by information he received from an unidentified person who works with the CSB’s Infant and Toddler Connection. This person suggested to Herrity that in the past, social services providers directly billed private insurance companies on behalf of those clients who had private health insurance and received care arranged through the CSB. About three years ago, however, the CSB assumed responsibility for billing those insurers and also collected a portion of the reimbursement for handling the billing. This amounted to about $17.50 for each $150 visit to a service provider, Herrity wrote.

However, in addition to adding new administrative duties, the new billing practice ran into trouble when some major insurers, including Blue Cross and Blue Shield, declined to recognize the CSB as part of their networks.

Braunstein said the agency assumed responsibility for the billing about three years both because it was the method preferred by the state of Virginia and because it enhanced the CSB’s mission of identifying and arranging care for people who have substance-abuse problems, mental illness or intellectual disabilities. By assuming responsibility for billing, the CSB ensured that clients who needed care would be able to see the most appropriate care provider without worrying about whether that provider was out of network. Providers also agreed to render services as if they were in an insurer’s network.

“Do we end up holding the bag financially because we make that guarantee?” Braunstein asked.

Herrity’s audit request came days after the board of the Fairfax-Falls Church Community Services Board met for the first time after the Board of Supervisors made stinging remarks about the agency’s governance. Several CSB board members chastised their own governing body for not being more vigilant about the CSB’s financial affairs.

“I think, politically, we’re in the hot seat,” said CSB board member Mary Ann Beal.

After some discussion, the CSB’s board agreed to appoint a fiscal oversight committee to dig into the CSB’s affairs.

The Fairfax County Human Services Council and the CSB have arranged a series of public meetings, beginning June 4, to discuss the CSB’s plans to address its budget problems.