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State Auditor report outlines millions...

State Auditor report outlines millions in questionable spending related to federal funds flowing to Mississippi

By: Anne Summerhays - December 6, 2022

“This audit is intended to let the taxpayers see how their money was spent, warts and all,” Auditor White said.

The Mississippi Office of the State Auditor (OSA) released their Single Audit Report for the State of Mississippi that covers federal funds spent by state agencies from July 1, 2020, to June 30, 2021.

According to a press release, State Auditor Shad White’s team discovered millions of questioned costs according to their Single Audit of federal funds flowing through Mississippi.

“This is an audit of federal money flowing through the state agencies and this audit is a bit different from the other audits that have been done during my four-year tenure as State Auditor because this involves a ton of federal stimulus money,” Auditor White said. “I think the fact that this audit involves so much money shows the importance and critical role that State Auditors around the country play in making sure that money that’s handed out to states is spent properly.”

The State Auditor said one of the big picture lessons that they learned from the stimulus dollars that flowed during the COVID-19 pandemic, is that the federal government tried to pump out a bunch of money very quickly and the nation was not prepared to disperse that money and also guarantee that no fraud would happen with it.

“The lesson from this stimulus is: we need to find ways as a country to push money out to prop up our society when that’s necessary without losing a lot of that money to fraud,” White continued.

Notable findings in the audit include:

  • The Mississippi Department of Employment Security (MDES) handled unemployment compensation and saw a 301% increase in known overpayments from the previous year. MDES made at least $473 million in improper or fraudulent unemployment payments that year. Those included unemployment payments to prisoners and people outside of Mississippi.
  • MDES also spent stimulus money on workforce training equipment unrelated to combatting COVID-19, making the spending improper under stimulus rules.
  • The Mississippi Division of Medicaid continues to provide funding to potentially ineligible recipients. A similar finding was included in last year’s Single Audit.
  • The Mississippi Department of Education (MDE) failed to follow proper procurement guidelines. Specifically, MDE allowed an eventual contract-winning vendor early access and the ability to suggest edits to the procurement specifications. The eventual winning bid was chosen due to vague product details. The winning bid was not one of the two lowest-priced bids.
  • Multiple state agencies failed to properly monitor CRF spending by sub-recipients. This means other organizations—like nonprofits—were not appropriately monitored after being selected to operate government programs. Years of similar findings at the Mississippi Department of Human Services (MDHS) preceded the conviction of 5 individuals connected to the largest public fraud scheme in Mississippi history, which was uncovered by the Office of the State Auditor.

Auditor White thanked the dedicated team of auditors and support staff for their work on the Single Audit.

“We are committed to shining a light on how the state handled the massive amount of stimulus funds that flowed through Mississippi,” White said. “This audit is intended to let the taxpayers see how their money was spent, warts and all.”

Click here to read the full Single Audit Report. 

About the Author(s)
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Anne Summerhays

Anne Summerhays is a recent graduate of Millsaps College where she majored in Political Science, with minors in Sociology and American Studies. In 2021, she joined Y’all Politics as a Capitol Correspondent. Prior to making that move, she interned for a congressional office in Washington, D.C. and a multi-state government relations and public affairs firm in Jackson, Mississippi. While at Millsaps, Summerhays received a Legislative Fellowship with the Women’s Foundation of Mississippi where she worked with an active member of the Mississippi Legislature for the length of session. She has quickly established trust in the Capitol as a fair, honest, and hardworking young reporter. Her background in political science helps her cut through the noise to find and explain the truth.