Wisconsin Legislative Audit Bureau: Review State’s administration of federal funds

For More Information Contact:

Senator Cowles ~ 800.334.1465

Representative Kerkman ~ 888.529.0061

MADISON – Today, the nonpartisan Legislative Audit Bureau (LAB) released its Single Audit (report 19-3), which evaluated state agencies’ administration of $11.9 billion in federal financial assistance during fiscal year (FY) 2017-18. Although state agencies generally complied with federal requirements, LAB made 14 recommendations to improve the administration of federal programs at the Department of Administration (DOA), the Department of Children and Families (DCF), the Department of Health Services (DHS), the Department of Public Instruction (DPI), the University of Wisconsin System, and the Wisconsin Technical College System (WTCS).

“I appreciate the work of the Legislative Audit Bureau in producing the Single Audit,” said Rep. Samantha Kerkman (R-Salem Lakes). “This yearly look allows us to monitor state agency success in administering federal dollars and alerts us to problems that if left uncorrected, could result in a loss of federal funds.”

LAB found DOA did not always minimize the time between when the State requested and received federal funds and when the State disbursed the funds for federal program purposes, as required. Due to the significance of this finding to two programs administered by DPI, LAB issued a qualified opinion on compliance related to cash management requirements for those two programs.

The Medical Assistance (MA) Program is the largest federal program administered by the State. LAB identified claims paid for inmate medical services that were not eligible under the State MA Plan, and also identified $69,970 in improper payments for claims paid to terminated providers.

LAB found that DCF did not collect $259,308 in child care provider overpayments it identified from January 2017 through June 2018. LAB also identified that DCF did not monitor all health and safety requirements annually for child care providers. In addition, LAB found that DHS, DPI, and WTCS were each noncompliant with requirements for monitoring subrecipients of federal funding.

LAB first reported concerns with IT controls related to the Student Financial Assistance Cluster in its FY 2014-15 single audit and made recommendations for UW System Administration to develop systemwide IT security policies and procedures. However, LAB found UW System Administration did not make significant progress as of June 30, 2018, in the development of IT policies and procedures.

“Maintaining oversight and upholding security over students’ financial assistance information should have been dealt with over the past several audit findings. This is a repeated finding that the UW System has left hanging too long. I want to work with the UW System to fix this deficiency and move towards eliminating this finding once and for all,” said Senator Robert Cowles (R-Green Bay).

LAB also audited the State’s FY 2017-18 financial statements and issued an unmodified opinion, which was included in the Comprehensive Annual Financial Report (CAFR) issued in December 2018 by DOA. This audit work is a required component of the Single Audit. In report 18-20, LAB made 10 recommendations related to internal controls over financial reporting and identified a material weakness related to the reporting of capital assets at the Department of Transportation.

Copies of LAB’s report (report 19-3) may be obtained from its website at www.legis.wisconsin.gov/lab or by calling (608) 266-2818. Report concerns related to state government activities to LAB by calling the toll-free hotline at 1‑877‑FRAUD‑17.

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