Minnesota needs tighter scrutiny over federal programs that supply billions of dollars annually to help families in need, including Medicaid and child-care subsidies, according to a state audit released Thursday.
Legislative Auditor James Nobles found that the state Department of Human Services (DHS) has not adopted proper controls to ensure that recipients meet eligibility requirements. The agency also failed to properly monitor county workers when they override eligibility rules, raising the risk for fraud or payment errors, the report found.
Some of the problems were identified years ago by auditors and DHS still has not corrected them.
"We need to redouble our efforts and do a better job in getting to work on those issues so we're not seeing those findings repeat," said Chuck Johnson, DHS's deputy commissioner for policy and operations.
Other weaknesses identified in the audit include failure to properly review fraud-detection efforts in child-care subsidies and failure for several years to recover roughly $139 million in Medicaid payments the state was due from the federal government.
Human Services Commissioner Lucinda Jesson said in a written response to Nobles that she agreed with the nine audit findings and that her agency "is working hard to resolve the issues noted." The agency is developing new data analysis tools to identify patterns of fraud in all the programs, Johnson said.
Auditors concluded that the DHS is "generally complying" with certain requirements of the federal programs. But efforts to resolve some of the oversight problems have been delayed, in part, because of the size and complexity of the programs, said Johnson. Medicaid, for example, costs roughly $9 billion annually in Minnesota, counting federal and state contributions, and covers more than 700,000 people.
The agency has been cited since 2009 for failing to develop a comprehensive risk assessment plan to ensure money is being spent properly in most of its major federal programs.
