Single Audit Report for 2016

The Legislative Auditor has released the Single Audit Report for 2016. The Single Audit recaps in one report many findings related to federal programs, most of which have been previously reported by the auditor. Federal law requires the state to compile the Single Audit every year. Officials use the information to monitor whether the state has complied – or not – with the requirements of federal assistance programs.

The 2016 Single Audit identifies 38 findings, most of which already have been detailed in individual agency reports. Certain findings resulted in modified opinions (four qualified and one disclaimer on Unemployment Insurance) on five of the state’s 20 major federal programs because they did not comply with certain requirements.

The programs given modified opinions were:

· Unemployment Insurance – The Louisiana Workforce Commission (LWC) failed to properly design and implement controls to ensure that unemployment insurance benefit payments were made to eligible claimants in the proper amounts; did not have proper change management policies and procedures over the Helping Individuals Reach Employment (HiRE) system; did not adequately manage the implementation of the HiRE system to ensure its compliance with all federal, state, and financial reporting requirements, nor did it have adequate controls in place to ensure required federal reports were accurate, complete, and properly prepared. In addition, LWC did not ensure compliance with unemployment insurance regulations to improve program integrity and reduce overpayments; did not properly report unemployment claims information to other states; and did not have adequate security controls over the HiRE system.

· Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii – The Office of Community Development (OCD), Disaster Recovery Unit identified $171 million in noncompliant awards for 6,577 homeowners participating in the Homeowner Assistance Program. OCD also assigned 65 property owners with Small Rental Property Program loans totaling more than $5.6 million to loan recovery status for noncompliance with loan requirements.
· Children’s Health Insurance Program and the Medicaid Cluster – For the second consecutive year, the Louisiana Department of Health (LDH) failed to maintain required processes that identify and recover paid claims where a third party is liable to pay for medical services provided for a Medicaid-eligible recipient. In addition, for at least eight months of fiscal year 2016, LDH did not establish alternate procedures to pursue and recover previously identified instances of third-party liability (TPL) that the Department continued to report at more than $29 million. Also, LDH’s TPL recovery contractor, Health Management Systems (HMS), has identified more than $18 million in recoveries with claim service dates more than three years old.
· Research and Development Cluster – The Louisiana Board of Regents for Higher Education did not adequately monitor subrecipients of its Federal Research and Development Cluster programs. In addition, for the second consecutive year, the Louisiana State University Agricultural Center did not comply with federal equipment management regulations. Louisiana State University and A&M College also did not comply with federal equipment management regulations.