Audit finds Delaware is mostly compliant spending $4.2B in federal funds; Violations found

Yahoo

14-04-2025

Delaware responsibly managed most of the more than $4.2 billion it received in federal funds during the 2024 fiscal year, according to a newly released audit from Delaware State Auditor Lydia E. York. The findings are part of the state's annual Delaware Uniform Guidance Single Audit.
However, while the audit found widespread compliance, it also uncovered serious issues and violations in several major programs.
The State Auditor's Office described the audit as a key tool for promoting transparency in how federal funds are used to deliver essential public services, especially in areas like public health, education and social welfare.
The audit examined how state agencies handled federal funding streams across 17 major federal programs, including Medicaid, food assistance, disaster relief and public health efforts. Funding from these programs covers a broad range of areas, such as education, affordable housing, clean water, child care and pandemic recovery.
Agencies included in the review were the Department of Labor, Department of Health and Social Services, Delaware Emergency Management Agency and the Office of the Governor. Some entities, such as the Delaware State Housing Authority and Delaware State University, were not part of this audit because they are subject to separate evaluations under the same federal guidelines.
Despite overall compliance, auditors flagged material weaknesses, significant deficiencies and compliance-related issues in five key programs.
The five programs with notable findings include:
Supplemental Nutrition Assistance Program cluster
Unemployment insurance
Coronavirus state and local fiscal recovery funds
Coronavirus capital projects fund
Activities to support state, tribal, local and territorial health department response to public health or health care crises
A total of nine programs were found to be out of compliance with federal audit standards, including major services such as the Children's Health Insurance Program, or CHIP, and Medicaid. The findings come as Congress debates possible budget cuts and legal battles continue over the future of federal aid programs.
In a statement, York defended the federal funding supporting these programs, emphasizing that the required audit is meant to promote service improvement, rather than drastic reductions to vital public services and jobs.
TBD: Medicaid funding battle threatens Delaware's health care system, local leaders warn
One of the most critical findings involved the state's Unemployment Insurance program. Auditors were unable to verify how funds from the Unemployment Trust Fund were spent, due to a lack of documentation from the Delaware Department of Labor.
As previously reported, former unemployment insurance administrator Michael Brittingham was found to have embezzled more than $181,000 from the trust fund, in 2023. He died by suicide shortly after an internal criminal investigation began in April of that year.
Ahead of the audit's release, the Delaware Department of Labor acknowledged ongoing issues and pledged to take action to rebuild public trust. In a statement, Secretary of Labor Lakresha Moultrie announced the department is putting corrective measures in place to strengthen internal controls and ensure compliance with both state and federal standards.
Officials also committed to providing regular public updates to maintain transparency throughout the improvement process.
You can contact staff reporter Anitra Johnson at [e-mail].
This article originally appeared on Delaware News Journal: State audit report Delaware mostly compliant in managing federal funds