#1Presenters: Michelle Searfus SECRETARY OF STATE Keeping Oregon Accountable F STATE 1859 OREGON Fiscal Year 2022 Audits Division#2AUDIT OVERVIEW - FISCAL YEAR 2021 ● 12 months of audit work • 25 state agencies • 17 federal programs Results published in Statewide Single Audit Report . . Current financial and federal findings Status of findings from two preceding years • Agency management's responses to findings . Schedule of Expenditures of Federal Awards (SEFA)#3FIGURE 1 5-year history of findings issued Figure 1: The number of material weaknesses identified varies from year to year 18 16 14 12 10 8 3 LO 6 4 ++ 6 2 4 0 FY 2018 FY 2019 FY 2020 6 11 FY 2021 FY 2022 Signficant Deficiency Material Weakness#4FIGURE 2 5-year history of audit adjustments Amount of proposed adjustments in millions $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 Figure 2: The dollar amount of adjustments increased in fiscal year 2022 121 118 226 62 59 $0 2018 2019 2020 2021 2022 Number of proposed account adjustments each fiscal year#5FIGURE 3 Proposed audit adjustments Figure 3: Proposed financial audit adjustments totaled $4.6 billion for fiscal year 2022 State agency Accounts affected Amount Oregon Department of Human Services / Oregon Health Authority 47 $2,030,682,661 Department of Corrections 2 492.047.828 Oregon Business Development Department 34 437,124,861 Department of Revenue 4 353.598.124 Department of Consumer and Business Services LO 6 299.889.320 Oregon Department of Transportation Oregon Judicial Department Department of Environmental Quality Department of Justice 16 293,545,574 4 208,050,380 21 190,624,510 34 91.012.991 Multiple agencies* 18 69,664,804 Oregon Military Department 2 47.800.119 Oregon State Police Higher Education Coordinating Commission 25 22 29.275,178 28,460,700 Oregon Department of Forestry 5 16,062,781 Oregon Employment Department 4 10,177,099 Oregon Housing and Community Services 2 3.333.569 Total 226 $4,601,350,499 *Note: In fiscal year 2022, adjustments were proposed to identify and track activity related to smaller agencies (e.g. Oregon Film & Video, Travel Information Council, and Commodity Commissions) that are part of the reporting entity, but optionally excluded from the financial statements.#6FIGURE 4 Progress in correcting financial statement findings Figure 4: Fiscal year 2022 saw a much higher rate of corrections compared to previous years FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Total prior year findings reviewed 19 20 16 17 15 Prior year findings, not resolved 14 13 7 7 5 Prior year findings, corrected 5 7 9 10 10 Rate of corrections 26% 35% 56% 59% 67%#7Figure 5: Seven programs expended over 83% of fiscal year 2022 COVID-19 funding Emergency Rental Assistance, $341.0,6% Education Stabilization. $431.0.8% Pandemic EBT. $568.4, 10% FIGURE 5 COVID-19 funding Supplemental Nutrition Assistance Program, $689.5, 12% Unemployment. $938.4, 17% All Other Programs, $936.9, 17% State and Local Fiscal Recovery Fund. $821.1. 14% Medicaid Cluster. $887.8, 16%#8FIGURE 6 Fiscal year 2022 federal expenditures and audit coverage Figure 6: We audited 68% of fiscal year 2022 single audit expenditures (in billions) Spent 402 programs totaling $21 billion 17 programs audited 1 program Medicaid $10.8 billion $14.2 billion total $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 $22 billions#9FIGURE 7 Fiscal year 2022 state agency federal expenditures Figure 7: ODHS and OHA account for nearly 75% of federal expenditures by state agencies, fiscal year 2022 Employment Department $1.6 billion Oregon Department of Human Service $6.7 billion Other $1.8 billion Oregon Health Authority $8.5 billion Department of Education $1.4 billion Department of Transportation $770.5 million#10FIGURE 9 History of Medicaid expenditures Figure 9: Total Medicaid expenditures increase each year Billions $16 $14 $3.3 $12 $3.0 $10 $3.1 $2.9 $2.6 $8 $6 $9.4 $10.8 $8.4 $4 $7.3 $7.6 $2 $0 FY 2018 FY 2019 FY 2020 FY 2021 FY2022 Federal Medicaid Expenditures State Medicaid Expenditures#11FIGURE 10 Oregon Housing and Community Services skyrocketed from fiscal 2020 to 2022 Figure 10: Oregon Housing and Community Services experienced a surge of pandemic funding, fiscal years 2020 to 2022 (in millions) Millions $600 $500 $400 $300 $200 $122 $100 $1 $63 $63 짬 $0 2020 2021 Federal Funds ■COVID Federal Funds $519 $62 2022#12FIGURE 11 Details of fiscal year 2022 audited federal programs Figure 11: We audited 17 programs expending $14.2 billion in federal funds for fiscal year 2022 Federal Program 2022 Findings Federal Program Expenditures $ 10,791,893,892 Medicaid Cluster Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 1 821.066.498 Highway Planning and Construction Cluster 2 634,606,478 Pandemic EBT Food Benefits (P-EBT) 1 568.371.920 Education Stabilization Fund (ESF) 3 430.993,443 Emergency Rental Assistance (ERA) 6 341.001.099 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) 5 120.518,861 Temporary Assistance for Needy Families 6 94,030,779 Immunization Cooperative Agreements 3 85,832,059 Low-Income Home Energy Assistance (LIHEAP) 3 69,516,809 Adoption Assistance 0 54.868.805 Emergency Solutions Grant (ESG) 7 36,758,183 Workforce Innovation and Opportunity Act Cluster (WIA/WIOA) 3 35.496,616 Disability Insurance/SSI Cluster 0 30,049,681 Social Services Block Grant 1 25,631,944 Block Grants for Treatment of Substance Abuse (SABG) Block Grants for Community Mental Health Services (MHBG) 5 27.469,090 5 15.290.215 55 $ 14,183,396 Two findings for non-major program (Opioid STR [State Targeted Response]) are not included in this chart. One ELC finding is shared with Immunization and counted twice. Three SABG findings are shared with MHBG and were counted twice. One other SABG finding is shared with MHBG, ELC, and Immunization and is counted four times.#13State Agency Oregon Department of Human Services Pandemic EBT Social Services Block Grant (SSBG) Temporary Assistance for Needy Families (TANF) Oregon Housing and Community Services Emergency Rental Assistance (ERA) Emergency Solutions Grant Oregon Health Authority Federal Program Expenditures Questioned Costs $ 568,371,920 25.631.944 $ 17,246.881 1.308.457 94,030,779 933,616 341.001,099 11,210,437 36,758,183 245,362 FIGURE 12 Questioned costs in fiscal year 2022 audited federal programs Epidemiology and Laboratory Capacity 120.518.861 1,017,603 Immunization Cooperative Agreements 85,832,059 36.783 Block Grants for the Prevention and Treatment of Substance Abuse 15,481,475 2,793,693 Oregon Health Authority/ Oregon Department of Human Services Medicaid Cluster 10,791,893,892 396.022 Higher Education Coordinating Commission Workforce Innovation and Opportunity Act Cluster (WIOA) Total 35.496.616 $ 12,115,016,828 47.523 $ 35,236,377#14FIGURE 15 Ongoing federal program findings history Agency Program Figure 14: History of ongoing findings Finding Summary Origination Years Year Ongoing ODHS Temporary Assistance for Needy Families Accurate reports 2010 13 ODHS/OHA Medicaid Provider eligibility 2012 11 ODHS Child Care and Development Fund Incorrect copays 2014 9 ODFW Fish & Wildlife Cluster Monitoring real property 2017 6 ODHS Temporary Assistance for Needy Families Accurate report calculations 2019 4 OHA Opioid STR Subrecipient monitoring 2019 4 OHA Opioid STR Report review 2019 4 ODHS/OHA Medicaid ODHS - Oregon Department of Human Services; OHA - Oregon Health Authority: ODFW - Oregon Department of Fish & Wildlife Return questioned costs 2019 4#15QUESTIONS?#16Michelle Searfus, Audit Manager Audits Division, Oregon Secretary of State [email protected] Kip Memmmott, Director Audits Division, Oregon Secretary of State [email protected]