Auditor questions spending, lack of oversight for Medicaid, child care programs

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JEFFERSON CITY – Missouri State Auditor Nicole Galloway issued the first report in the Budget Integrity Series related to budget oversight, accountability and the state’s budget crisis.

The Statewide Single Audit looks at the state's management and spending of $8.4 billion federal dollars.

The review found lack of accountability in the Department of Mental Health and the Department of Social Services, which are two agencies that administer federal funds.

Five of the six findings in the report were repeated issues from previous audits.

“With the Department of Mental Health, we found they were approving payments to group homes that weren’t supported by any documentation and that added up to about a one million dollars," Galloway said. "And the Department of Social Services, we’ve found questionable payments, we found inadequate oversight, poor handling of cash and potential for child care providers to get payments they weren’t eligible for really putting a strain on taxpayer dollars.”

Taxpayers share concern over the findings.

“I’m retired army, and I opened my own business, so the taxes that I do pay, I want it to go to the appropriate places and be spent well and not wasted,” business owner Jason Allabaugh said.

The Department of Mental Health released a statement responding to the audit finding.

“In Fiscal Year 2014, the DMH Division of Developmental Disabilities began transitioning to a new reimbursement process.  Some of the rates sampled by the State Auditor were from historic reimbursement rates. The current rates being paid to providers are below market levels. The Division’s Medicaid Waiver was updated in July 2016 and reflects the new reimbursement process,” said Debra Walker, with the Missouri Department of Mental Health.

A new issue this year shows the Department of Social Services did not meet federal requirements to review eligibility for certain doctors, hospitals and health care providers.

“The Medicaid and Children's Health Insurance Program (CHIP) requirements were put in place to determine whether existing health care providers are eligible to receive reimbursement from the state," a statement from Galloway's office said. "Although the department had at least five years to prepare for the new requirements, 87 percent of providers had still not been reviewed, creating a total backlog of approximately 28,000 providers pending review. The growing backlog also increases the possibility that tax dollars will go to unauthorized health care providers.”

The Department of Social Services released a statement saying it partially agrees with some of the audit findings, disputing certain issues within the report.

Galloway also found reoccurring concerns with safeguards to stop inappropriate payments through the Department of Social Services child care program. According to the release, the program helps pay child care costs for around 64,000 children and costs more than $135 million annually.

For the seventh year, auditors are unsure of the department's capacity to prevent or detect payment to ineligible clients and child care providers.

“The audit also found 39 closed pharmacies that were still enrolled and authorized to receive Medicaid and CHIP payments,” according to the release.

Galloway said, in programs where the state and federal government pay for the cost of providing services together, inappropriately-spent tax money can potentially add stress on a state budget that is already facing a shortfall next year.