Audit reveals problems with Alaska state agencies

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(The Center Square) – Understaffing and lack of training at Alaska’s state agencies caused a slew of errors and could lead to actions by the federal government for one agency, Legislative Auditor Kris Curtis told lawmakers Wednesday.

Staffing problems led to multiple audit findings concerning federal programs administered by the Division of Public Assistance at the Department of Health. Curtis told a joint meeting of the House and Senate Legislative Budget and Audit committees.

The audit found noncompliance with federal laws and flaws in internal controls related to Medicaid, CHIP, the Low Income Heating Assistance Program, SNAP benefits, and Temporary Assistance for Needy Families.

“Many of you might be aware of the struggles the department is facing right now with eligibility for food stamps and Medicaid, recertifying Medicaid eligibility,” Curtis said. “But we’ve identified problems with this division for many years, and it really has to do with staffing shortages, lack of staff experience, training struggles, and just a general lack of adequate internal controls within the division.”

She said problems of this nature could lead to action by a federal oversight agency.

Additionally, problems previously identified with the new Medicaid behavioral health claims processing system have persisted and led to incorrect and ineligible providers being paid and providers being paid for ineligible services at incorrect amounts, the report found.

“Auditors found the Medicaid eligibility system that interfaces into this claims processing system was not doing so accurately. And that led to expenditures being claimed for federal reimbursement at incorrect rates. And finally, certain behavioral health providers were not screened and enrolled in accordance with federal requirements, and this really is a public safety issue,” Curtis said.

The system errors might have led to ineligible people receiving benefits while eligible people did not receive benefits, according to the report.

Auditors also found errors in draft financial statements, which Curtis primarily attributed to high turnover and staffing issues at the Division of Finance.

“They really are having a hard time hiring talent and bringing that talent, especially CPA level into the division to help with the creation of the financial statements,” said Curtis.

Auditors recommended that the Department of Commerce, Community, and Economic Development work toward recovering “unallowable grant payments” identified in the COVID Small Business Relief Program.

The report also identified an increase in appropriation shortfalls at nine departments, which means they might have overspent their general fund appropriation, Curtis said.

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