YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Report No. 2000-40
May 26, 2000

The State Auditor's Office has completed an audit of the federal grant programs administered by the State of Missouri. The state is required by the federal Single Audit Act and the U.S. Office of Management and Budget, Circular A-133 to have this audit conducted each year for the benefit of the federal agencies that provide federal grant funds to the state agencies. Federal grant funds expended by state agencies totaled $5.02 billion during the year ended June 30, 1999. The Single Audit noted problems in several different areas related to federal grant funding. In total, the audit questioned the use of $1,739,510 because the state did not comply with federal requirements. The federal government's share of the questioned costs was $1,218,147. The following findings are especially noteworthy.

* The Department of Social Services is responsible for determining if payments to service providers are in accordance with state regulations and the state's Medicaid plan. During fiscal year 1999, total expenditures (state and federal share) for inpatient and outpatient hospital services were approximately $1 billion. The department has not completed reviews of hospital cost reports in a timely manner, which limits the state's ability to make timely rate policy decisions under the federal Medicaid program. Although there are about 150 hospitals in the state that receive Medicaid funding, the Department of Social Services had only performed 18 final cost report settlements during the year ended June 30, 1999.

* The audit noted various problems in the eligibility of recipients of Food Stamps, Temporary Assistance for Needy Families (TANF), and Medicaid as follows:

To help support and encourage clients to obtain employment, the Department of Social Services, Division of Family Services (DFS) has available a day care vendor program that pays part or all of the cost of child care. Under this program, persons wishing to provide day care to Division of Family Services clients are able to register with the Division of Family Services and become eligible to receive direct, state payment for part or all day care provided to children of clients. One of our audit concerns was whether Division of Family Services adequately considered the income it paid to day care vendors who were themselves clients receiving Food Stamp and/or Temporary Assistance for Needy Families benefits when reviewing the vendors eligibility for these benefits. We matched benefit and day care vendor payments and found some recipients had not properly reported their income from providing child day care services and may have received Food Stamp and Temporary Assistance for Needy Families benefits that they were not eligible to receive.

Some recipients of state retirement system payments did not properly report their income and received Food Stamp and Temporary Assistance for Needy Families benefits that they may not have been eligible to receive.

Although federal regulations do not allow individuals to receive benefits in more than one state at the same time, the audit noted some recipients who were receiving benefits in Missouri and Kansas at the same time.

Some inmates were incorrectly receiving benefits, which is not allowed by federal regulation and state law.

Some recipients had not correctly reported the value of their automobiles and, as a result, had received benefits they were not entitled to.

Medicaid benefits were paid on behalf of some recipients after they had died.

The Department of Social Services is suppose to have a case file for each recipient of benefits. However, the department's local offices could not locate 23 case files we requested during our audit. Most of these missing files related to the St. Louis City and St. Louis County offices.

Some children received benefits after they became too old under federal regulations to qualify for benefits.

* The Department of Social Services (DSS), through the Division of Aging (DA), provides eligible clients with in-home personal care services. The department's in-home vendor contracts, as well as state law, prohibits vendors from employing persons listed on the Division of Aging Employee Disqualification Listing (EDL). We matched persons on the division's Employee Disqualification Listing to 1998 employment records of in-home health care providers and noted nine instances in which a person on the disqualification listing was providing these services to the elderly under contract with the Department of Social Services.

Complete Audit Report