Audit questions $22.4M in DHS expenditures
The Oklahoma Department of Human Services lacks proper documentation to support more than $22.4 million in federal expenditures made under a program designed to assist low-income families, according to a state audit released Friday.
Under the federal Temporary Assistance for Needy Families program, states are required to show that they spent certain amounts of state funds on families whose incomes are less than 200% of the poverty level in order to draw matching federal funds.
One area of concern is that DHS claimed federal matching funds for more than $12 million that the state spent providing prekindergarten services to children in low-income families.
Auditors said that appeared tobei nappropriate because TANF regulations state that such expenditures only qualify for a match if the services they are paying for are not generally available to other residents of the state without cost and without regard to their income. Nearly all Oklahoma school districts offer prekindergarten classes and there is no income requirement, auditors noted.
Auditors also questioned the appropriateness of DHS claiming a federal TANF match for more than $7 million that the state had spent on subsidized child care expenditures. DHS failed to document that the specific families who received the state subsidies met TAN Fin come requirements, auditors said.
After auditors called the problem to the agency's attention, DHS did gather records that could have be used to document income eligibility, but didn't have those records when it submitted its claim for federal funds, auditors said.
DHS also claimed TANF matching funds for nearly $1.6 million in state funds spent on vocational training programs at local colleges, auditors said. DHS failed to document that the funds only went to individuals who met TANF income eligibility requirements, so auditors questioned those expenditures, as well.
DHS also transferred more than $14.4 million in TANF funds to a social services block grant program without making sure the funds were only used for children of families that meet TANF income requirements, auditors found.
The audit wasn't all bad. "Based on the sample of expenditures tested, we did not find any indication of fraud ," State Auditor Cindy Byrd told The Oklahoman.
It is not currently known whether DHS will be required to pay back any of the money.
"Sometimes the federal government does require agencies to repay the funds if they were not spent in accordance with federal compliance requirements," Byrd said.
D HS issued a news release Friday that downplayed the significance of the audit findings.
"No fraud is alleged, no taxpayer dollars were misspent, and all monies have been accounted for," DHS said. "The findings indicate all money was spent appropriately, but OKDHS lacked sophisticated process and system controls."
“We appreciate the state auditor's office for their work on this audit,” said DHS Director Justin Brown. “We are aware of t he deficient processes and systems within our agency and we are working diligently to update those systems to make us more efficient and transparent while we continue to serve millions of Oklahomans who rely on us for assistance.”
Brown assumed leadership of DHS in June 2019, during the last month of the state fiscal year that was being audited.
“TAN Fist he core of the social safety net and presents a significant opportunity to invest in prevention and resilience for Oklahoma's families, and for several years has been a resource that hasn't been strategically deployed to its fullest potential.” Brown said. “The beneficiaries of TANF and child care services are some of the most vulnerable populations in the state of Oklahoma. The agency strives to do its absolute best to ensure we provide support and assistance to recipients while also maintaining as much transparency as possible.”