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STATE OF MISSOURI

SINGLE AUDIT 2012 PRELIMINARY REVIEW AND OBSERVATIONS
Testimony to House Appropriations Committee for Social Services
By Dan Amsden
April 3, 2013

I have performed a very preliminary and incomplete review of the Missouri 2012
Single Audit Report and have listed observations and comments as follows,
including some comparisons to the 2011 Single Audit Report:

The report indicates that the federal government has provided funding for
355 programs in the 2012 report as compared to 349 in the 2011 report. It
would be beneficial to determine which are the six new programs and if they
were established and initiated with the following:
o Was there a baseline or current situation assessment prepared before
commencing each program?
o Were measurable verifiable success goals and milestones established
before commencing each program, and specific plans for follow up
measurements and determination of each programs future based upon
those success measures?
Page 5 of the report indicates that $12.7 Billion were expended on these
programs with $12 Billion spent on 32 programs and $682 Million spent on
323 programs or an average of just over $2 Million each for the 323 small
programs. To determine efficiencies it is needed to know what percentage of
these expenditures goes directly to end recipients and how much is spent
administering the programs, especially for the small programs. I would like to
see the organizational structure for how the departments are organized and
how these programs are managed.
Page 11 of the report states that “Our report also expressed a qualified
opinion of the basic financial statements because we were not allowed access
to tax returns and related source documents for income taxes.” This inhibits
the auditor’s ability to determine eligibility of recipients and legitimacy of
payments and is a repeated comment from the 2011 report. It seems
inconceivable that the auditors are not allowed access to the information to
allow them to do their job. Page 15 further states “the state of Missouri did
not comply with requirements regarding allowable activities or allowable
costs and cost principles applicable to the Medicaid Cluster, allowable
activities or allowable costs and cost principles and eligibility requirements
applicable to the Child Care and Development Fund Cluster, and allowable
activities or allowable cost principles, eligibility, and level of effort

requirements applicable to the Temporary Assistance for Needy Families
Cluster.” This is basically a repeat of the 2011 report which indicated
that eligibility of recipients could not be verified and would appear
to indicate little control or management of how the funds are spent.
Page 37 indicates procedures are not in place to ensure complete and
accurate information regarding inter-fund and inter-agency transactions and
this is a repeat of the 2011 report.
Page 61 indicates that “Controls are not sufficient to prevent and/or detect
payments on behalf of ineligible clients or improper payments to child care
providers. Subsequent pages stated the following:
o The DSS could not locate the child care eligibility file for 5 of 60 (8
percent) cases reviewed (Page 62).
o For child care payments, 22 of 60 (37 percent) payments reviewed
were not supported by adequate documentation and/or were not in
compliance with DSS policies. Attendance records were not provided
…………(Page 63)
o Controls and procedures over absence and holiday payments are
inadequate and, as a result, the DSS paid at least $300,000 to
providers who did not actually provide child care for the children
claimed, ……………….(Page 64)
My general impression is that very little has been done to correct
the deficiencies noted in the 2011 report and that there are
probably new deficiencies. The basic appearance, which is
consistent with all of the other studies that I have done, is that all of
the programs appear to be focused only on spending money
provided by the federal government without any concern for
program benefits, efficiencies or effectiveness. There is also no
mention of any method or concern for detecting duplication of
services from program to program, department to department, or
between the federal agencies that award the money. There also
appears to be no accountability of any kind either at the department
level or at the level of the individual who fails to perform.