YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

March 05, 2004

Report No. 2004-16

The United States Congress passed the Single Audit Act of 1996 to establish uniform requirements for audits of federal awards administered by states, local governments, and non-profit organizations.� The Single Audit includes the federal awards expended by all state agencies, except for the public universities and various financing authorities which provide their financial information directly to the federal government. �State agencies expended $7.9 billion of federal grant funds during the year ended June 30, 2003. �Expenditures of federal awards have increased significantly over the past five years.� Although all sixteen state departments and other state offices expended federal awards, six state departments expended the bulk of the federal awards (95 percent).� These six departments are: Social Services, Transportation, Labor and Industrial Relations, Elementary and Secondary Education, Health and Senior Services, and Public Safety.� Overall, the state expended federal awards in 296 different programs.

Expenditures reported on the original schedule of expenditures of federal awards prepared by the Department of Health and Senior Services (DHSS) were understated by approximately $9.5 million.� Many of the understatements resulted from the incorrect compilations of data reported on the department's internal accounting system. �In addition, the DHSS does not reconcile its internal accounting system to the statewide accounting system (SAM II).� (page 25)

The DHSS and the State Emergency Management Agency need to improve monitoring of subrecipients. Various federal regulations establish the requirements that must be met when state agencies provide federal funds to subrecipients.� (page 27 and 29)

The Department of Social Services (DSS), Family Support Division (FSD) improperly charged an employee's salary, benefits, and related indirect costs to the Refugee and Entrant Assistance-State Administered Programs grant.� We questioned costs of $30,418.� (page 30)

The DSS, Childrens' Division (CD) made Adoption Assistance payments after contract authorizations had expired.� Also, invoices or other supporting documentation for some payments could not be located.� We questioned costs of $5,996.� (page 31)

Indirect costs related to DSS-CD training expenses were charged to the Foster Care - Title IV-E grant at an incorrect rate of 75 percent rather than 50 percent, resulting in an overpayment of $34,161.� Additionally, residential treatment center training costs were improperly charged to the Foster Care-Title IV-E grant.�� The federal share of these costs

that were questioned totaled� $429,208.� We also could not locate invoices or other adequate supporting documentation for some payments.� The federal share of these expenditures questioned totaled $6,344. (page 32)

On March 18, 2003, the Missouri State Auditor's Office issued audit report No. 2003-25, Department of Social Services Foster Care Program.� The report noted concerns regarding in-home visits of foster children and the tracking inventory system for foster children.� Additionally, family support team meetings did not occur as often as required and often did not include all required parties or the foster child.� Also, the division does not always initiate termination of parental rights action on a timely basis and foster parent background checks can be improved and expanded.

(page 33)

On December 5, 2003, the Missouri State Auditor's Office issued audit report No. 2003-115, Department of Social Services Foster Care Program.� This audit found that residential facilities were overpaid $22,000 for children that had run away.� In addition, social workers did not promptly update a child's placement status in the computer system to runaway, causing overpayments.� Division workers disregarded criminal convictions documented in background checks and inappropriately licensed three foster parents.� Only one of these three foster parents received any federal funds from the state.� (page 38)

The DSS, Division of Medical Services charged salary and fringe benefit costs totaling $194,875 (federal share $97,438) for five employees to the Medical Assistance Program, even though these employees are primarily responsible for working with a state program called Missouri Senior Rx.� �As there were no time sheets or other documentation maintained to identify actual time spent on each program, there is no existing support to justify the salary and fringe benefit costs charged to the Medical Assistance Program.� (page 40)

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