IDAHO, USA — This article originally appeared in The Idaho Press.
An audit of an embattled grant program has found the Idaho Department of Health and Welfare was deficient in its distribution of a federal grant and found it serious enough to refer to the attorney general’s office.
The 55-page report, released Monday afternoon, listed eight findings against the health department’s distribution of the Community Partners Grant funds.
The department in the report disputed these findings. In an Aug. 11 response to the draft findings, health Director Dave Jeppesen said the department “welcomes the audit review and the transparency it affords the public in understanding” the grant program, but disagrees with the findings.
He wrote that, “IDHW used adequate controls to ensure that the Community Program Grants were awarded to recipients for eligible purposes and for eligible age groups” per state law and federal guidance.
“... IDHW is proud of the outcomes achieved as a result of the Community program grants,” Jeppesen said. “Idaho’s implementation of this federal grant was recognized by our federal partners as being innovative and aligning with federal goals for the grant. Most importantly, grant recipients brought significant benefit to the children in their communities.”
The state’s budget-writing Joint Finance and Appropriations Committee directed the Legislative Services Office to perform the audit in late February over concerns that the department distributed the federal funds to ineligible programs. The grants were provided to more than 80 organizations in 2021 and 2022.
The findings were that the department didn’t maintain sufficient documentation to support its award decisions, some recipients received more than the maximum amount allowed through statute by applying multiple times through variations of the entity name, there wasn’t enough evidence that the department ensured compliance with age requirements, staff didn’t properly review applications, reports from the recipients were inadequate to ensure funds were spent appropriately, payments distributed in fiscal year 2022 exceeded the $36 million appropriation, and payments were not made on time.
JFAC Co-Chair Rep. Wendy Horman said Monday the audit results showed a “stunning lack of fiscal oversight and risk mitigation.”
The money for the grants came from federal American Rescue Plan Act funds for the purpose of after-school programs. When the state granted the agency the authority to spend the $36 million, lawmakers stipulated that grants only go to programs that serve school-aged children ages 5 to 13.
The funds, which were distributed in two rounds, were provided to programs that appeared to serve preschool children and other children below the age of 5, which prompted questions from legislators.
Horman told the Idaho Press she is considering holding oversight hearings, which the co-chairs have the authority to do under Idaho code.
Further action would be determined by the attorney general’s office, she said.
Horman added that the committee has plans to improve the budget area of the website by adding links to Transparent Idaho, the audits, and the federal funding guidance.
“This is exhibit A of things we were already planning to do based on things we learned from this experience,” Horman said of the grant program. “It’s pretty clear we need to tighten up some budget processes and controls based on what we’re seeing here.”
OTHER LEGAL ACTIONS
Attorney General Raúl Labrador had already initiated an investigation into the Community Partners Grant program, the Idaho Press reported in March.
The office began serving civil investigative demands, which are a type of administrative subpoena, to many of the organizations that had been grant recipients. More than 30 of those organizations filed a lawsuit to put a stop to the civil demands, and later a judge allowed Labrador to move forward with the demands while narrowing the demand of some of them.
Jeppesen had also been individual served with a civil demand, and he separately filed a petition in court to block it.
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