State Auditor Nicole Galloway, D, says changes to Missouri’s Unemployment Insurance system used the wrong calculations and had inconsistencies that led to $2 million in potential mistakes. Galloway says a new $40 million system within the Missouri Department of Labor was not fully developed or tested before implementation – affecting at least $134,000 in overpayments to claimants who had exceeded their maximum unemployment benefit. The errors went undetected for about one year.
“Businesses throughout Missouri pay millions into the unemployment system, which is why it is so disconcerting to find that there are funds being managed without proper oversight or accountability,” Auditor Galloway says. “Even simple checks and balances have not been implemented, leaving the Department of Labor unable to accurately provide basic financial information.”
Galloway says the annual audit also found an increasing number of concerns throughout state agencies and identified hundreds of millions of dollars in questionable costs in social safety net programs, like Medicaid. The 2016 report had six findings, while this year’s report found 17 areas of concern.
The review identified a lack of accountability in two additional agencies that administer federal funds: The Department of Mental Health and the Department of Social Services. Multiple findings included in the report related to these two departments were repeat issues identified in prior year audits.
“The state spends billions in federal dollars each year that must be managed properly and spent appropriately on programs and services Missourians depend on,” says Galloway. “Failing to properly account for that money can put those dollars, and the programs they support, at risk. ”
A complete copy of the audit report is available online.