California Auditor Details Agency Flaws That Could Affect Stimulus Funding

In an April 22 letter to Gov. Arnold Schwarzenegger (R) and legislators, state Auditor Elaine Howle reported that the Department of Health Care Services and other state agencies lack sufficient internal controls to properly handle money from the federal economic stimulus package, Capitol Weekly reports. 

California is set to receive about $81.4 billion from the stimulus package, including about $10 billion for Medi-Cal, the state's Medicaid program.

According to Howle, the amount of stimulus funding and the federal requirements for tracking the funds require the state to have the most rigorous systems in place to oversee the distribution and reporting of how the funds are used.

The audit cites 46 problems related to "internal controls over federal funds."  One example Howle cites is a federal program at DHCS in which "business users had the ability to change data and disable any controls on the system, thus removing the ability to trace actions of the user." 

The audit is based on data from fiscal year 2007, the most recent information available. According to Capitol Weekly, the issues reportedly have been resolved.