Audit finds $39 million in questionable spending in Arkansas government

A legislative audit of Arkansas’ spending during fiscal year 2021 called over $39 million into question.

The Legislative Auditing Committee heard the State of Arkansas’ Single Audit Report Friday. The audit produced a total of 41 findings, 12 of which were repeat findings representing issues that have yet to be resolved after popping up during previous audits.

The largest chunk of money concerned unemployment insurance payments. The audit uncovered benefit overpayments totaling over $28.7 million.

“Specifically, our review of claimant data revealed numerous overpayments of benefits to claimants deemed ineligible and claimants who could not provide identification to validate their claims, as well as claims paid on behalf of deceased individuals,” said Tammy Shaw, who presented the audit report.

Another $10.5 million related to the Coronavirus Relief Fund (CRF) was also flagged. The audit produced 12 findings at four different agencies where CRF money was concerned: The Department of Finance and Administration, The Department of Commerce, the Department of Parks, Heritage, and Tourism, and the Department of Human Services.

Six of the 12 findings were tied to the Department of Human Services (DHS), including issues concerning the child health insurance program, referred to as CHIP, and Medicaid. Shaw said the most significant of the deficiencies uncovered was a lack of sufficient, appropriate financial documentation that prevented the auditors from doing their jobs.

DHS Secretary Cindy Gillespie said the repeat findings have been resolved and shouldn’t appear on future audits.

“With us, the repeat findings are areas where it has taken us several years to put in place the changes. So you have in these years part of the year where there’s repeat findings and then the change going into effect,” Gillespie said.

The state disbursed a total of $14.01 billion in money from federal programs during fiscal year 2021, according to the audit. Of that money, DHS received 55% of the funding, far more than any other agency.

Other findings concerned the Division of Workforce Services’ handling of the COVID-19 Presidential Declared Disaster Assistance to Individuals and Households. The audit found some supplemental payments for lost wages were paid to claimants who were later deemed ineligible.

It also said the state did not meet the required 25% match for the lost wages program. Total questioned costs in this area were $684,000.

Overall, Arkansas brought in $29.1 billion in revenues during fiscal year 2021. Grants and contributions made up $13.7 billion of that number, $9.7 billion was collected in taxes, and charges for services brought in $4.8 billion for the state, according to the audit.

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