The Maryland Department of Health engaged in poor accounting practices for years, potentially causing the state to miss out on $1.4 billion in federal aid that could have ripple effects on the state budget, according to an audit released Tuesday.
The state had spent the money on a variety of health care programs, including Medicaid, but without proper documentation the department may not get reimbursed by the federal government as expected. If the state does not get paid for the $1.4 billion, it could cause a significant hole in the overall state budget, which runs about $63 billion.
The initial problem was worse: Auditors found $3.5 billion in unreimbursed expenses during their review, but state health officials were able to document them and get reimbursed for about $2.1 billion.
The 74-page audit report, produced by the nonpartisan Office of Legislative Audits, noted “pervasive deficiencies” in how the health department handled federal money that comes in for various programs. The audit covered a period of time from February 2019 through June 2022, during the tenure of former Gov. Larry Hogan.
The report covered such a long time period because a cyberattack at the Department of Health caused key documents to be inaccessible, so auditors paused their investigation for seven months and then extended their review.
“This audit report demonstrates there was a complete breakdown in oversight and management of how the Maryland Department of Health was spending and receiving funds under the prior administration,” said state Sen. Clarence Lam, a Howard County Democrat who is co-chair of the legislature’s audit committee. Lawmakers plan to hold a hearing on the health department’s accounting problems next month.
The story continues at The Baltimore Banner: Audit: Maryland could be on the hook for $1.4B due to poor health department accounting
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