State Auditor Nicole Galloway released her office’s review of how Missouri state agencies managed and spent more than $20.6 billion in federal funds in fiscal year 2021. his single statewide audit this year examined 20 federal programs across 10 state agencies.
“Billions of dollars have been sent to federal government state agencies for specific programs, including many new programs related to COVID-19 recovery,” Auditor Galloway said. “State agencies must be accountable for how these taxpayer funds are used, especially given the unprecedented amount of federal funding flowing into Missouri.”
The verification of the state financial statements and federal grant expenditures for the year ended June 30, 2021 contain 22 findings, a significant increase from the previous year’s seven findings. Three are repeat results from the last two to seven years. Half of the 22 findings relate to concerns about compliance with federal rules for social services and health care assistance through Medicaid and other federal programs. In a finding repeated from previous years, auditors noted that the Department of Human Services still hasn’t fixed system overrides for some Medicaid and children’s health insurance program participants. Auditors also found that the ministry did not have adequate controls in place to prevent overpayments of subsidies to child care providers.
The federal Department of Health and Human Services has provided Missouri with approximately $22.7 million under the Infectious Disease Epidemiology and Laboratory Capacity (ELC) program. The state’s Department of Health and Senior Services (DHSS) used this program to fund testing, contact tracing, vaccinations, and other COVID-19-related activities by 123 subrecipients, including county and city health departments. However, the auditors found that DHSS did not have adequate procedures in place to ensure that ELC reimbursements to sub-recipients were allowable, reasonable, and supported by sufficient documentation. As a result, unsubstantiated reimbursements were made to some sub-recipients. Additionally, DHSS did not adequately track ELC sub-recipients.
In addition, the report identified improvements needed for internal controls and tracking of more than $323 million in federal emergency rental assistance passed from the Missouri Department of Economic Development to the Missouri Housing Development Commission. Missouri (MHDC). Auditors also found that the Department failed to report $337 million in federal COVID-19 assistance for tenants and landlords in their required accounting reports on federal grants.
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 in fiscal years 2020 and 2021. During the In fiscal 2021, Unemployment Insurance program spending 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 single statewide audit for fiscal year 2021 is available here.