Thursday, July 28, 2022

State auditor releases report on agencies' use of federal dollars


(From State Auditor Nicole Galloway)

State Auditor Nicole Galloway today released her office's review of how Missouri state agencies managed and spent more than $20.6 billion in federal funds during fiscal year 2021. This year's Statewide Single Audit reviewed 20 federal programs within 10 state agencies.

"Billions of dollars have been sent to state agencies from the federal government for specific programs, including many new programs related to COVID-19 recovery," Auditor Galloway said. 








"State agencies need to be accountable for how these taxpayer funds are used, especially given the unprecedented amount of federal funding that is flowing into Missouri."

The audit of the state's financial statements and expenditures of federal awards for the fiscal year ended June 30, 2021 contains 22 findings, a significant increase from the prior year's seven findings. Three are repeat findings from the last two to seven years. 

Half of the 22 findings relate to concerns surrounding compliance with federal rules for social service and health care assistance through Medicaid and other federal programs. 

In a repeat finding from prior years, auditors noted that the Department of Social Services still has not corrected system overrides for some Medicaid and Children's Health Insurance Program participants. Auditors also found the Department lacked adequate controls to prevent overpayments of subsidies to child care providers.








The federal Department of Health and Human Services disbursed approximately $22.7 million to Missouri through the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program. The state's Department of Health and Senior Services (DHSS) utilized this program to fund testing, contact tracing, vaccinations, and other COVID-19 activities by 123 subrecipients, including county and city health departments. However, auditors found that the DHSS did not have adequate procedures to ensure ELC reimbursements to subrecipients were allowable, reasonable, and supported with sufficient documentation. As a result, unsupported reimbursements were made to some subrecipients. In addition, the DHSS did not adequately monitor the ELC program subrecipients.

Additionally, the report identified improvements needed for internal controls and monitoring of the more than $323 million in federal emergency rental assistance passed through the Missouri Department of Economic Development to the Missouri Housing Development Commission (MHDC). Auditors also found that the Department failed to report $337 million in federal COVID-19 relief aid for renters and homeowners in their required accounting reports of federal awards.

System controls in the Department of Labor and Industrial Relations' UInteract system were not sufficient to prevent or detect improper payments authorized by an employee totaling approximately $123,000 during fiscal years 2020 and 2021. In fiscal year 2021, unemployment insurance program expenditures totaled more than $3.4 billion, including more than $2.7 billion in federal benefits and $661 million in state benefits paid to Missouri workers.

A complete copy of the Statewide Single Audit for fiscal year 2021 is available here.

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