By John Dobberstein, Editor
OKLAHOMA CITY — A yearly audit of how Oklahoma government administers federal funding cast another shadow on financial controls in some state departments.
Oklahoma State Auditor and Inspector Cindy Byrd released the “Federal Single Audit” for fiscal year 2024 covering about $14 billion of expenditures.
The FSA audit is federally-mandated examination of whether the state spent federal grant money in compliance with federal regulations.
According to Byrd, this year’s audit found “questioned costs” totaling almost $25 million. Questioned costs are any expenditures that don’t comply with the law, cannot be documented and/or appear unreasonable or unethical. Byrd said the combined questioned costs from the last five FSAs stands at more than $200 million.
“This is the fourth Single Audit in a row in which we have warned lawmakers and agency directors about the consequences of mishandling federal money,” Auditor Byrd said.
“While the amount in questioned costs has decreased from the previous year, Oklahoma still has improvements to make to ensure good financial management. The debt is piling up, and Oklahoma taxpayers could be forced to refund millions of dollars to the federal government.”
Byrd noted the federal government has the authority to demand all of that money back from the state.
According to Byrd, the latest audit reveals “particular problems” at the Department of Human Services (DHS), the Office of Management and Enterprise Services (OMES) and the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS).
DHS failed to provide proper oversight of its Child Care Desert Grant Program (CCD), its Low-Income Heat and Energy Assistance Program (LIHEAP), the Low Income Household Water Assistance Program (LIHWAP), and the Supplemental Nutrition Assistance Program (SNAP).
For the child care grant program, Byrd said DHS failed to monitor attendance records and as a result, 23% of the facilities tested by her department were claiming children attendance that significantly exceeded each facility’s licensed capacity.
Approximately 95% of all CCD dollars tested for this year’s report, $12.6 Million, are labeled as questioned costs.
“The risk of fraud remains extremely high as DHS does not have adequate controls to identify fraudulent activities at child-care centers,” Byrd said.
DHS also failed to provide oversight which allowed a former employee to misappropriate almost $2 million from the LIHEAP and LIHWAP programs. That employee was the primary administrator with final approval authority over LIHEAP applications and appears to have accessed expired applications and approved payments under the names of former LIHEAP recipients. He also had the ability to modify banking information.
Starting in October 2027, the federal government will slash SNAP benefits for states with an error rate of 6% or higher. Oklahoma’s error rate is currently 11%, and if DHS fails to rectify this problem, Byrd said, Oklahoma taxpayers stand to lose more than $236 million in federal funding each year.
OMES has $3.8 Million in questioned costs for the Emergency Rental Assistance program (ERA) in addition to the $15.8 million in questioned costs identified previously in the ERA program.
ODMHSAS spent $6.2 Million on designs and planning for the proposed Donahue Behavioral Health Campus. ODMHSAS failed to evaluate the feasibility or long-term funding requirements for the facility. The project was later abandoned and taxpayers got nothing in return for their $6.2 Million.
Byrd said stopping fraud, waste and abuse, “should be a non-partisan issue.
“Taxpayers work too hard for their money — money that the government takes from their paychecks — to tolerate this level of irresponsible spending. A poorly managed state government does incredible harm to its own citizens. Mismanagement scares away outside investment and capital. Mismanagement loses federal funding. Oklahoma must get its act together.”
The full FY 2024 FSA is posted here on the Oklahoma State Auditor & Inspector’s official website.
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