NORWICH – Though just February, the Chenango County Mental Hygiene Services Department currently faces a budget deficit of $246,000, or about 5 percent of its total 2008 budget.

Department Director Mary Ann Spryn told county lawmakers Tuesday that while the amount appeared to be “fairly serious,” it could, for the most part, be recovered from the New York State Department of Health.

“We are very optimistic that they will assist us,” she said, while pointing out that Medicaid rule changes contributed to the situation.

“The state has a faulty model,” she said.

Spryn anticipates that all but approximately $45,000 of the amount will be reimbursed within the next two weeks. The remaining deficit is the result of Medicaid take-backs from 2004 and 2005 that the New York State Office of Alcoholism & Substance Abuse Services considered overpayments based on the county’s revenues, she said.

“We generated more revenues than we had budgeted,” said Spryn, who told the committee she had become aware of the discrepancy in November.