FRANKFORT, Ky. (March 28, 2016) – Auditor Mike Harmon today released the second
volume of the annual Statewide Single Audit of the Commonwealth of Kentucky (SSWAK)
for the fiscal year ending June 30, 2016.
Volume two focuses on compliance with federal requirements for federal awards, and
contains a total of 18 findings regarding the Cabinet for Health and Family Services
(CHFS), Department of Workforce Investment (DWI), and the Kentucky Transportation
Cabinet (KYTC). Seven of the findings are repeated from the SSWAK Volume II audit
for Fiscal Year 2015.
During Fiscal Year 2016, Kentucky spent more than $12.3 billion in cash and noncash
awards received from the federal government, which represents a slight increase in
federal funds expended by the Commonwealth compared to Fiscal Year 2015. The 2016
SSWAK Volume II has more than $196,000 in questioned costs related to federal funds.
“We owe it to the taxpayers of Kentucky to be good stewards of state and federal
funds we receive,” said Auditor Harmon. “It is my hope the leadership in our
cabinets and agencies will review the 18 findings in our SSWAK Volume II audit for
the past fiscal year carefully, and implement our recommendations.”
Among the 18 findings in the report, four material weaknesses were identified,
including two previously reported in volume one of the Fiscal Year 2016 SSWAK, which
reported findings related to the Commonwealth’s Comprehensive Annual Financial
Report. Finding 2016-044 relates to CHFS failing to ensure that the Benefind
application was working properly and that staff had received adequate training
before it was implemented. The Benefind application is used to determine participant
eligibility for many federal programs, including Medicaid.
The other material weakness for CHFS in both volumes of SSWAK for Fiscal Year 2016
also deals with the implementation of Benefind. Finding 2016-045 cites the
inability of the cabinet to reconcile required quarterly reports in March and June
2016 because the reporting function with Benefind was not operating correctly.
The other 14 findings related to significant deficiencies within CHFS, DWI, and
KYTC. Among those findings:
* KYTC failed to gain official approval from the Federal Highway
Administration (FHWA) prior to the donation of surplus right-of-way property. For
one example, in August 2015 KYTC donated 131 acres of land to the Pike County Fiscal
Court without prior official approval from FHWA. The land was appraised in 2013 at
a value of $1.92 million.
* DWI failed to ensure the accuracy of data provided by Kentucky’s Local
Workforce Development Areas on financial reports for the federal Workforce
Innovation and Opportunity Act program.
* CHFS paid duplicate benefits to Supplemental Nutrition Assistance Program
(SNAP) and Temporary Assistance for Needy Families (TANF). This finding is also
cited in the Fiscal Year 2016 SSWAK Volume I audit.
The report, along with the responses to the findings, can be found on the auditor’s
website<http://www.auditor.ky.gov/>.
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The Auditor of Public Accounts ensures that public resources are protected,
accurately valued, properly accounted for, and effectively employed to raise the
quality of life of Kentuckians.
Call 1-800-KY-ALERT or visit our website to report suspected waste and abuse.