Missouri State Auditor Nicole Galloway reported 18 deficiences in an audit of the state's management and spending of federal dollars administered by state agencies.
Wednesday's report marked an increase from the 14 deficiencies found last year. The audit reviewed federal programs administered by nine state agencies with expenditures totaling $8.8 billion.
The audit identified concerns with the methods the Department of Social Services uses to prevent and detect inappropriate payments to child care providers.
Auditors found cases where parents or guardians were approved for child care financial assistance, but were not working the required 20 hours per week to qualify for those subsidies, or did not have clear proof of income eligibility or other requirements. In other cases, the child care provider was not able to provide adequate records as proof of child attendance.
Auditors recommended the department implement additional procedures to ensure license-exempt child care providers comply with state law. Providers who care for four or fewer unrelated children are exempt from licensing requirements. For 43 percent of providers reviewed in that case, the department incorrectly classified some children or could not verify their relationship to the provider.
Other findings noted issues with program oversight and monitoring. Auditors found Missouri HealthNet, a division of the Department of Social Services, did not remove inactive user accounts from its Medicaid management system in a timely manner. Four of 25 active system accounts belonged to individuals who had not been employed by the department or a contractor in more than eight months.
Additionally, the Department of Mental Health failed to retain documentation to support daily rates paid to some group homes for residential services, preventing auditors from determining whether amounts paid to homes were allowable under Medicaid program guidelines. Without supporting documentation, auditors questioned federal payments of about $659,000.
In administering federal Homeland Security grants, the state Department of Public Safety did not take steps to ensure recipients of federal funds obtained independent audits when required by federal law. Similarly, the department did not adequately monitor whether recipients complied with purchasing requirements.
In previous reviews of federal money, auditors determined the Department of Health and Senior Services had failed to ensure annual reassessments were performed for recipients of certain Medicaid services. The department has implemented various changes in recent years and significantly reduced the backlog of outstanding reassessments. The current audit shows that reassessments were due for approximately 2,700 recipients, a 73 percent reduction from the previous year.
In addition to the review of federal expenditures, auditors examined Missouri's annual statewide financial statements. During an audit of the state's comprehensive annual financial report, released in January, auditors identified incorrect financial data submitted to the Office of Administration by the Office of the State Treasurer. The misstatement included $214 million incorrectly categorized as cash holdings instead of investments, and the state's bank account balances understated by over $753 million. Because the reported balances were corrected before the financial statements were finalized, there were no material misstatements in the final report and no impact on the office's opinion on the state's comprehensive annual financial report.