Audit Bureau Examines Use of Federal Funding

The nonpartisan Legislative Audit Bureau (LAB) has released its Single Audit, which evaluates state agencies’ administration of federal financial assistance received by the state. LAB found state agencies generally complied with federal grant requirements and took steps to resolve concerns identified in prior audits. However, LAB did question more than $510,000 in federal reimbursements state agencies received and provided 65 recommendations to improve the State’s administration of federal grant programs.


During fiscal year (FY) 2011-12, state agencies administered $12.9 billion in federal financial assistance through more than 2,000 federal programs and grants, including approximately 1,170 research and development grants awarded to the University of Wisconsin (UW) System. This federal financial assistance consisted of $11.5 billion in cash; $1.2 billion in noncash assistance, such as food commodities; and $216.5 million in outstanding federal loan balances. These funds included approximately $1.1 billion the State received under the federal American Recovery and Reinvestment Act (ARRA) of 2009.

LAB’s audit identified over $4.5 million in additional reimbursements and overpayments for state agencies to claim from the federal government. The audit also found both new and continuing internal control deficiencies and areas of federal noncompliance.

LAB identified concerns with rate-setting practices related to payments to adoptive parents by the Department of Children and Families, inadequate monitoring of 3 federally funded transit services programs by the Department of Transportation, and inadequate oversight of certain Community Development Block Grant (CDBG) funds by the Department of Administration (DOA) through the Wisconsin Economic Development Corporation. LAB again recommended changes in the process used by DOA to charge other state agencies for certain centralized services, such as mainframe computer processing. Twenty-one of the LAB’s recommendations concern the University of Wisconsin System’s administration of federal funds.