Louisiana audit finds $5M in questionable spending with federal funds

Photo courtesy DepositPhotos

A review of Louisiana’s basic financial statements and federal award spending uncovered more than $5 million in questioned costs from nearly three dozen findings, including nearly two dozen repeated from prior years.

The findings involve spending at 16 state entities, from the Acadiana Area Human Services District to the University of Louisiana at Lafayette, with the largest questioned costs at the Louisiana Office of Community Development and Southern University at Baton Rouge.

Louisiana Legislative Auditor Mike Waguespack issued Louisiana’s Single Audit Report on May 31, following a review of state spending and federal awards in fiscal year 2022 across various departments, agencies, universities and other organizational units included in the Annual Comprehensive Financial Report.

“A total of 35 findings were reported within this year’s Single Audit Report. This total includes 23 (66%) findings that were repeat findings from a prior audit,” the report read. “The 2022 Single Audit Report discloses federal questioned costs of $5,888,572. … The resolution of these questioned costs will be determined by the respective grantors.”

The findings include two repeats at the Louisiana Office of Community Development totaling $2.7 million in questioned costs associated with Small Rental Property Program loans for nine property owners who did not comply with loan requirements.

“Since LOCD has not recovered these loans, we consider these amounts totaling $2,635,609 to be questioned costs,” the report read. “In addition, 1,147 noncompliant loans identified in previous years totaling $104.5 million remain outstanding.”

Another two repeat findings at Southern University at Baton Rouge involved $1,878,773 in questioned costs stemming from COVID relief spending through the Higher Education Emergency Relief Fund.

“For the second consecutive year, SUBR’s calculation of lost revenue under the HEERF was not consistent with guidance provided by the (U.S. Department of Education),” auditors wrote. “Failure to adequately review and follow lost revenue guidance provided by the USDOE caused SUBR to overdraw funds in fiscal year 2022 by $1.9 million; however, SUBR had a $2.5 million under draw from fiscal year 2021 to offset this, resulting in a net under draw of approximately $600,000.”

A total of 10 issues, including eight repeat findings, totaling $843,547 in questioned costs came from the Louisiana Department of Health. They mostly questioned costs related to noncompliance with National Correct Coding Initiative Requirements for Medicaid claims, and inadequate internal controls over eligibility determinations for Medicaid and CHIP programs.

Other questioned costs included $90,136 at the Department of Education, $148,669 at the Department of Children and Family Services, $128,236 at the Office of Juvenile Justice, $29,397 at the Louisiana State University Health Sciences Center – Shreveport, $30,704 at the Louisiana Workforce Commission, $105,567 at the Southern University Law Center, and $4,520 at the University of Louisiana at Lafayette.

The roughly $5.8 million in questioned costs in 2022 was significantly less than recent years, with totals of $12.3 million in 2021 and $37.4 million in 2020 and $9.9 in 2019. Of those totals, $11.7 million from 2021, $36.2 million from 2020, and $1.4 million from 2019 remain unresolved, according to the LLA.

l