I'm Blake Oliver, and you're listening to The Accounting Podcast.
An independent audit of Maryland's Department of Health has revealed over 1.4 billion in questionable spending and other alarming fiscal failures during the COVID-19 pandemic.
The audit, conducted during the transition from Republican Governor Larry Hogan to newly elected Democratic Governor Wes Moore, exposed severe deficiencies in the health agency's financial practices and stewardship of taxpayer dollars.
The audit's findings have raised fears that Maryland taxpayers could end up on the hook for the $1.4 billion funding gap if efforts to recover those funds from the federal government fall short. Among the many issues uncovered, The Health Department delayed and mishandled reimbursement requests from the federal government for COVID expenses.
The agency also failed to properly track federal reimbursement payments it received. The audit also found contracting problems, including using a COVID-related contract for unrelated work without documenting over 60 million in contractor payments.
State Senator Clarence Lamb called it the worst audit he's ever seen. He compared the Health Department's lack of financial documentation to an employee failing to keep receipts and records for business travel reimbursements.
Maryland's Secretary of Health, Laura Henrietta Scott, acknowledged the severe issues raised in the audit, which covered a period before she took over the agency's leadership. She said the Department is swiftly taking steps to address the problems.
The agency has hired an outside accounting firm to overhaul its fiscal practices. It has also centralized contracting, brought in new leadership, and implemented policies to prevent similar problems in the future.
This has been a news update from The Accounting Podcast. I'm Blake Oliver. Thanks for listening.