Key Audit Issues 2019 Summarizes $3.8 Billion in Potential Waste and Inefficiencies, and Possible Improper Payments

Louisiana's state and local governments continue to be challenged by a failure to collect all monies owed to them, a habit of paying out more money than they need to, and an inability to adhere to adequate internal fiscal controls. In calendar year 2018, these problems added up to·potentially $3.8 billion in waste, inefficiencies and possible improper payments.

There were some notable improvements as well. The Department of Children and Family Services, for instance, revamped its procedures for identifying and removing deceased participants from the SNAP program and reduced the amount of money improperly paid out from $1.3 million between 2007 and 2013 to $42,599 between 2013 and 2017. The Louisiana Department of Health also improved its process for identifying incarcerated Medicaid recipients and recovering per member per month fees paid to the managed care organizations on their behalf. As a result, between January 2014 and March 2018, LDH recovered approximately $25 million in fees. And the Louisiana Department of Education reduced the amount of potentially improper payments in the Child Care Assistance Program to approximately $24,000 in fiscal 2017.

Overall, however, the highlighted audit reports paint a picture of ongoing problems with oversight of financial operations in many agencies, municipalities, and school districts.

The audits summarized in Key Audit Issues 2019 reflect a portion of more than 4,100 reports released in calendar year 2018 and represent issues, findings, and/or problems considered important by the LLA. The $3.8 billion figure was calculated from findings reported to the Joint Legislative Committee on the Budget as required by Act 461 of the 2014 Regular Legislative Session. Act 461 requires the LLA to report all audit findings that exceed $150,000 to the JLCBquarterly and annually; the money identified is not necessarily recoverable, available to be spent, or required to be paid back.

The more than $3.8 billion identified in the Act 461 Reports for 2018 is an increase over the nearly $622 million outlined in 2017 and represents at least:

· $3.3 billion in potentially improper Medicaid payments;
· $469.3 million that could be lost if the federal government requires repayment of funds;
· $30.2 million the State paid or potentially paid out when it didn't need to;
· $8.4 million that could be lost because of the failure to keep track of movable property;
· $5.4 million owed to the State that was not collected;
· $4.9 million in possible lost revenue because of weak internal fiscal controls;
· $3.1 million paid in error;
· $643,000 used to purchase software that could not be implemented.
For more information contact:

Legislative Auditor
225.339.3800