09/23/2026 - JEFFERSON CITY, Mo.
Missouri State Auditor Scott Fitzpatrick today released his
office's review of how Missouri state agencies managed and spent approximately
$20.5 billion in federal funds during Fiscal Year 2025. This year's Statewide
Single Audit reviewed 21 major federal programs with expenditures totaling
approximately $16 billion, administered by 9 state agencies.
"With the billions of dollars flowing into our state each
year from the federal government, it is crucial that each and every dollar is
used appropriately and in compliance with federal requirements. I am proud of
the work my office does each year to thoroughly examine the controls and
procedures the various state agencies have in place, but also concerned that so
many of the recommendations we make year after year to ensure our state is
providing sufficient oversight of these funds are not put into place in a
timely manner," said Auditor Fitzpatrick. "As you can see from many
of the repeat findings in this year's audit, we have departments and agencies
that continue to ignore our recommendations, and in doing so increase the risk
for fraud and potentially jeopardize future federal funding. It's time for
state officials to take our findings seriously and work immediately to put
these recommendations into place."
The audit of the state's expenditures of federal awards for
the fiscal year ended June 30, 2025, contains 16 findings, of which 9 were
repeated from prior Single Audits. These findings have been reported in the
prior 1 to 4 years.
Similar to what was noted in the previous audit report, the
current report contains 4 findings regarding state agencies - the Office of
Administration (OA), the Department of Health and Senior Services (DHSS), and
the State Emergency Management Agency (SEMA) - failing to properly monitor more
than $569 million in funds passed through to subrecipients in Fiscal Year 2025.
The audit identifies weaknesses in monitoring procedures in the Coronavirus
State and Local Fiscal Recovery Funds (SLFRF) program and for the Child and
Adult Care Food Program (CACFP), while also finding the SEMA completed only 25%
of the required number of subrecipient monitoring reviews for disaster assistance
program subrecipients.
As similarly noted in the Fiscal Year 2024 and 2023 audits, the
report found the DHSS, which oversees the CACFP, does not have sufficient
controls and procedures to ensure reimbursements to child and adult care
facilities and sponsors are allowable and supported with sufficient
documentation. Over the last 3 years the error rate has increased so that erroneous
and unsupported reimbursements now represent 12% of meal reimbursements tested.
The audit also found DHSS subrecipient monitoring procedures are not sufficient
to ensure CACFP subrecipient compliance with program requirements. As a result,
significant unallowable and unsupported reimbursements continue to be made
without being prevented or detected on a timely basis, and monitoring reviews
identified significant errors, noncompliance, disallowances, and overclaims.
A randomly-selected sample of 60 DHSS monitoring reviews conducted
for 60 CACFP facilities/sponsors during the year ended June 30, 2025, noted
DHSS disallowances (overclaims/underclaims) in 50 of 58 (86%) reviews for which
meal reimbursement claims were tested and errors quantified. Overclaims totaled
$72,561 (43 reviews) and underclaims totaled $4,275 (7 reviews), with a net
overclaim of $68,286, or at least 12% of claims tested by the DHSS. While the
DHSS adjusted subsequent claims to recoup or reimburse for the identified
overclaims/underclaims, unallowable costs could be significant if similar
errors were made on the remaining population of CACFP meal reimbursements
totaling approximately $69.9 million. The recommendation to enhance procedures
related to identification and recoupment of overclaims, as required by federal
regulations, and expanded testing when significant errors are identified has
been in included in the audit report for the last 3 years, but the DHSS has continued
to ignore the recommendation, which will likely allow significant improper
payments to subrecipients to continue.
As similarly noted in 2 previous Statewide Single Audits, the OA
had not established policies and procedures regarding monitoring subrecipients
of the SLFRF program. As a result, the OA and 2 other state agencies did not
comply with the requirements regarding identifying and monitoring subrecipients
of the SLFRF program. For the year ended June 30, 2025, approximately $302
million was passed through to subrecipients of the SLFRF program. Similar to
the finding in last year's report, the SEMA did not fully comply with
subrecipient monitoring requirements for the Disaster Grants - Public
Assistance (Presidentially Declared Disasters) (DGPA) program. The SEMA did not
communicate all required federal award information to subrecipients, completed
only 25% of the required number of subrecipient monitoring reviews, and did not
perform supervisory reviews of some monitoring reviews.
Of the 16 findings contained in the Statewide Single Audit, 8 are
related to the administration of the Medicaid program and the Children's Health
Insurance Program (CHIP) by the Department of Social Services (DSS) and the
DHSS. One finding notes how the DSS does not have sufficient
controls to ensure participants of the Medicaid program and the CHIP are not improperly enrolled in more than one
eligibility system. As of May 2025, there were 9,834 participants dually
enrolled in both eligibility systems.
As noted in 2 previous audits, the vital records death match was
not operating in the Medicaid Eligibility Determination and Enrollment System during
the year ended June 30, 2025. As a result, there is no assurance that all
participants in the Medicaid program and the CHIP are eligible for benefits and
there is an opportunity for improper benefit payments to be made. The failure
to implement and enforce adequate internal controls to ensure participants are
not improperly enrolled in more than one eligibility system increases the risk
that improper Medicaid program and CHIP payments may be made or claimed at the
incorrect federal/state share.
The audit report also identifies the
DSS continues to not have sufficient controls to ensure eligibility
determinations are performed within required timeframes for participants of the
Medicaid program and the CHIP. As noted in 3 previous audits, significant application processing delays
continued during the year ended June 30, 2025. A test of compliance with
eligibility requirements noted 19 of 120 eligibility determinations were made 7
to 115 days after the required timeframes and averaged approximately 40 days
late.
The audit also finds the DSS does not have
sufficient controls to ensure compliance with eligibility redeterminations are
completed as required for certain Medicaid programs and the CHIP participants whose eligibility is based on their Modified
Adjusted Gross Income. As of December 31, 2025, the DSS had a backlog of
approximately 85,000 participants, for which redeterminations had not been
completed. As noted in 2 previous audits, the MHD lacked adequate controls over
Medicaid and CHIP receipts totaling approximately $1.4 billion.
Four other findings in the report focus on the insufficient
controls and procedures in various agencies to ensure accurate and timely
submission of Funding Accountability and Transparency Act (FFATA)
reports. During state fiscal year 2025, the Division of Finance and
Administrative Services within the DSS, did not timely submit FFATA reports for
1 subrecipient of the Medicaid program and 3 subrecipients of the Social
Services Block Grant program. Additionally, the SEMA did not fully comply with
FFATA reporting requirements for 6 of 17 DGPA subawards reviewed, and the Department
of Economic Development did not fully comply with FFATA reporting requirements
for 18 of 27 Community Development Block Grant program subawards. The FFATA
requires comprehensive reporting for certain federal awards to promote
transparency and accountability over the use of the federal funds.
A complete copy of the Statewide Single Audit for fiscal year 2025
is available here.
