Ohio audit exposes mishandling of millions of taxpayer dollars by state agencies

An independent audit of Ohio’s federally supported programs for low-income residents found several issues with the state’s handling of taxpayer dollars for Medicaid, school food programs, unemployment and energy assistance programs.

The 2025 Single Audit uncovered 18 separate findings related to the federal programs at seven state agencies, including improper payments, weak oversight and other compliance issues. The agencies also failed to meet federal reporting requirements and verify eligibility for benefits.

Among the findings in the 449-page document, four included nearly $6.8 million in questionable costs–money that may have been spent improperly. The report includes 14 noncompliance issues, including control deficiencies, and 14 material weaknesses.

Although concerning, the 18 findings have dropped from a high of 38 in the 2020 audit.

Auditors tied many of these failures to the same core issues: weak management oversight, sloppy documentation, a lack of internal controls, and slow follow-up on known issues, according to Truth in Accounting.

In particular, the auditors identified concerning deficiencies with how the state verified program eligibility and paid Medicaid claims without strong guardrails in place.

This means tax dollars were doled out to people who don’t meet the income rules, and state agencies are failing in their oversight duties and reporting requirements.

“We all deserve better,” Truth in Accounting noted. “Stronger checks and balances, better technology, and real accountability aren’t “nice-to-haves”; they’re basic responsibilities when handling public money.”

The Ohio Department of Medicaid and the Ohio Department of Development each had five reportable findings. Auditors identified two significant deficiencies related to the state’s Medicaid Cluster and CHIP programs, involving third-party liability and controls against overutilization of services and excess payments.

Auditors flagged the Ohio Department of Development for several serious issues, including failing to spend low-income energy assistance funds on time and underreporting nearly $6 million in federal carryover balances.

The Department of Development was also dinged for how it handled Coronavirus State and Local Fiscal Recovery Funds. Auditors identified problems with subrecipient monitoring and reporting, including basic procedures for properly reviewing financial reports, monitoring vendors, and addressing problems when they arose.

The Ohio Department of Behavioral Health had two findings for noncompliance issues related to the timely disbursement of federal funds and timely reporting under the Transparency Act.

The Ohio Department of Job and Family Services was cited for making improper unemployment insurance payments and failing to follow up on alerts about changes in income or employment for Temporary Assistance for Needy Families recipients.

Auditors found compliance and eligibility issues in the Ohio Department of Education and Workforce’s Summer EBT program for children.

The Ohio Department of Education and Workforce also failed to properly report more than $692 million in federal school nutrition funds in accordance with the Transparency Act. That includes $180.7 million in School Breakfast Program transactions and $511.9 million in National School Lunch Program transactions.

Over 2,200 individual transactions didn’t make it into the federal reporting system because the agency lacked proper controls.

Medicaid, Ohio’s largest health program, also had several concerning findings, including deficiencies and weaknesses in internal controls related to eligibility processes.

Auditors discovered improper approvals for individuals earning too much because caseworkers used outdated wage information. In addition, there were unresolved alerts about eligibility changes, lack of federal reporting, and weak checks to verify third-party insurance coverage.

A significant deficiency involved problems with surveillance utilization reviews to identify overutilization of inpatient and outpatient Medicaid services, including the State’s psychiatric hospitals, and to recoup payments for improper claims. This was a repeat finding from a prior audit.

In September 2023, the Department suspended the processing of inpatient and outpatient hospital take back claims through the Ohio Medicaid Enterprise System Fiscal Intermediary module, which resulted in the Department postponing the recoupment of provider overpayments during the audit period.

“A lack of effective internal controls related to the over utilization of inpatient and outpatient hospital claims, increases the risk of improper and/or unnecessary medical claims going undetected,” the auditors wrote. “By not safeguarding against unnecessary or inappropriate use of Medicaid and CHIP services, there is an increased risk of provider payments being noncompliant with federal program requirements.”

The State of Ohio Annual Comprehensive Financial Report for the fiscal year ended June 30, 2025, including the Independent Auditor’s Report, has been issued under separate cover by the Ohio Office of Budget and Management. This report is also available at obm.ohio.gov.