09/25/2024 - Jefferson City, MO
"With the immense amount of federal funds flowing into and
through our state budget each year, it's imperative that we closely examine how
this money is allocated and to ensure it is used in a fiscally responsible way,"
said Auditor Fitzpatrick. "Last year's single audit was able to help save
the state $10 million per year, and this year's audit has identified another
half million dollars in savings, along with several other areas where our state
departments can run their programs more efficiently and effectively, and in
compliance with federal requirements. This year's audit also provides
recommendations to the Child and Adult Care Food Program that could prevent
hundreds of thousands of dollars in erroneous reimbursements."
The audit of the
state's expenditures of federal awards for the fiscal year ended June 30, 2023
contains 18 findings, which is an
increase from the prior year's 9 findings. Six of the findings are repeat
findings from previous audits. The current audit report contains findings
related to various federal programs, including Medicaid, Children's Health
Insurance Program (CHIP), Adoption Assistance, Coronavirus State and Local
Fiscal Recovery Funds (SLFRF), Child and Adult Care Food Program (CACFP), and
Child Care.
The audit found the Department of Health and Senior
Services (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. The audit also found
DHSS subrecipient risk assessment and monitoring procedures are not sufficient
to ensure CACFP subrecipient compliance with program requirements. As a result,
significant unallowable and unsupported reimbursements are made without being
prevented or detected on a timely basis, and monitoring reviews have identified
significant issues and claim errors, including some potentially fraudulent
activity, and led to over 15 contract terminations in recent years. A
randomly-selected sample of 60 DHSS monitoring reviews conducted for 58 CACFP
facilities/sponsors during the year ended June 30, 2023, noted DHSS
disallowances (overclaims/underclaims) in 41 of 58 (71 percent) reviews for
which meal reimbursement claims were tested. Overclaims totaled $50,954 (36
reviews) and underclaims totaled $280 (5 reviews), with a net overclaim of
$50,674, or at least 11 percent 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 $74.6
million. The audit report notes the DHSS disagrees with the State Auditor's
Office recommendations and believes their procedures are sufficient and in
compliance with federal regulations. Until the DHSS acknowledges there are weaknesses
in its existing procedures, and takes action to strengthen those procedures,
significant improper payments to facilities and sponsors will likely continue.
A significant finding similar to one from last year's Statewide
Single Audit could save the state more than half a million dollars annually in
state taxpayer funds. The audit found the Department of Social Services (DSS)
did not have sufficient procedures and controls to prevent and/or detect errors
with the allocation of some administrative costs to federal programs. In total,
for Fiscal Year 2023, costs totaling approximately $1.08 million were
incorrectly allocated to six programs. The identification of this issue
will allow DSS to pay for these services with federal funds rather than state
funds - saving the state approximately $546,000 each year. The previous audit
detected a similar error that saved the state approximately $10 million per
year.
The audit also found a $1 million error made by the DSS. Because
the DSS does not have
adequate internal controls and procedures related to adoption savings
requirements, the amount of adoption savings reported in the federal fiscal
year 2022 Annual Adoption Savings Calculation and Accounting Report was
overstated by approximately $1 million. If the error had not been identified
during the audit, the DSS would have had to demonstrate approximately $1
million in additional expenditures for required services.
Of the 18 findings contained in the Statewide Single Audit, 9 are
related to the administration of the Medicaid and CHIP programs by the DSS and
the DHSS. These programs accounted for 64 percent of the state's total federal
expenditures. One finding notes how the DSS - MO HealthNet Division (MHD) does
not have sufficient controls to ensure benefits are terminated for participants
no longer eligible for Medicaid and CHIP. A review found a death match was not
operating in the Medicaid Eligibility Determination and Enrollment System during
the year ended June 30, 2023. Additionally, for 2 of 60 participant cases
sampled, the DSS received information requiring participant case termination,
but did not manually terminate the participants' eligibility in the applicable
eligibility system.
A significant finding that has appeared in three previous audits
notes the MHD has not fully implemented the Medicaid National Correct Coding
Initiative (NCCI) edits in the Medicaid Management Information System (MMIS) as
required. The failure to fully implement the NCCI edits increases the risk that
coding errors or irregularities will go undetected, and improper payments will
be made.
Additionally, the audit found the MHD did not review and remove
access rights for the MMIS in a timely fashion for users no longer employed in
positions needing access. A sample of 40 MMIS users found 2 terminated users
whose access had not been removed for 9 and 13 months.
The audit found the MHD does not have adequate controls in
place to ensure the proper management of receipts. During a count of
undeposited items and a review of related receipt records on December 11, 2023,
auditors noted numerous omitted cash control numbers. Failure to properly
account for cash control numbers increases the risk of misappropriation. The audit
also found, as it did in two previous audit reports, the DHSS did not perform Medicaid
facility survey procedures within required timeframes.
Another audit finding recommends the Department of Elementary and
Secondary Education (DESE) strengthen controls over the Child Care program's
subsidy payments to child care providers to ensure correct rates are paid. A
sampling of 60 monthly payments to providers for child care found the DESE
overpaid providers for 2 of the payments. The audit recommends the DESE
strengthen and enforce internal controls and review payments to ensure the
correct Child Care subsidy rates are paid.
Additionally, the audit found the DESE needs to strengthen
internal controls related to Federal Funding Accountability and Transparency
Act reporting; the statewide Schedule of Expenditure Awards was not prepared
timely by the Office of Administration (OA) because of insufficient controls
and procedures; and the OA has not established policies and procedures
regarding monitoring subrecipients of the SLFRF program.
A complete copy of the Statewide Single Audit for fiscal year 2023
is available here.