Audit finds multiple instances of improper usage of federal funds - Schweich disappointed in DESE

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Missouri News Horizon
JEFFERSON CITY, Mo. -  As Missouri continues to rely more and more on federal funding to help make ends meet, the state auditor has found 26 instances of federal dollars being mismanaged by state government.

Pictured left is Auditor Tom Schweich.

On Monday, Auditor Tom Schweich, released the findings of his department’s annual Statewide Single Audit – the culmination of 25,000 man-hours spent reviewing all programs that receive federal funds.

It is the single largest audit that Schweich’s office performs annually, a reflection of the increased level of government funding, particularly since the 2008 financial crash and resulting stimulus program.

“Missouri received $14.23 billion in federal dollars last year,” Schweich said at a press conference in his Capitol office on Monday. “Many people may not realize that the majority of the state budget doesn’t actually come from state tax revenues.”

Schweich expressed disappointment at the number of errors his office uncovered, though he noted only one instance of deliberate abuse of funds. Most of the errors, which cover a number of state agencies, stem form issues like ineligibility of program recipients and the lack of oversight concerning funds that are given to private contractors.

The auditor was particularly hard on the Department of Elementary and Secondary Education, which continues to audit federal spending only after the end of the fiscal year.

“There’s no sense in reviewing those funds after they’ve already been spent – you can’t change anything after the fact,” the auditor said.

Overall, the audit sites $184 million in improperly recorded transaction in the Office of Administration’s accounting division, with Schweich saying that transactions were recorded twice after a change in federal disbursement procedures. This led to revenues and expenditures both being overstated.

The audit also found mistakes in the Department of Social Services’ children’s division, which Schweich said lacks proper control to make sure families receiving benefits are actually eligible. Of the 60 child-care and development fund cases the auditor’s office reviewed, 15 percent lacked the documentation to prove their eligibility.

The auditors also questioned $189,423 used by the Department of Labor and Industrial Relations to managed unemployment benefits. They also raised issue with the State Emergency Management Agency’s procedures for using Social Services Block Grant Disaster Funds – although Schweich did concede to the unusually time pressures that last year’s disasters imposed on SEMA.

Of the nine departments audited, Schweich’s office found no errors in three: the Department of Mental Health, the department of Natural Resources and the Department of Transportation.