McGuiness Office Granted Permission to Obtain Outside Counsel in Subpoena Case

FOR IMMEDIATE RELEASE
Feb. 10, 2022

 

McGuiness Office Granted Permission to Obtain Outside Counsel in Subpoena Case with DHSS over Requested Medicaid Records
Gov. Carney acknowledges DOJ’s conflict of interest in the case

DOVER, Del. – State Auditor Kathy McGuiness said today the State Auditor’s Office was granted permission by Gov. John Carney to hire outside counsel in its ongoing subpoena case with the Department of Health and Social Services (DHSS) over access to Medicaid eligibility records for an audit.

Kathy McGuiness State Auditor“Thank you to Governor Carney for understanding that having the Department of Justice represent both my office and DHSS in this case was an inherent conflict of interest,” McGuiness said. “Since August, I have had to represent myself and my office in New Castle County Superior Court because the DOJ refused to recognize the subpoena power granted to me in Delaware Code.”

McGuiness and her audit staff have been trying since May to obtain the necessary documents to complete a performance audit of DHSS’ Medicaid eligibility programs for three years. When DHSS refused to comply with the data requests, McGuiness exercised the subpoena power granted to her under Delaware Code Title 29 Chapter 29 Section 2910 to attempt to obtain the records and access her team needs.

McGuiness highlighted the need for outside counsel earlier in the week during the office’s fiscal year 2023 budget hearing before the Joint Finance Committee.

“Delaware Code says specifically that the Auditor ‘shall conduct postaudits of all the financial transactions of all state agencies,’” McGuiness said. “Medicaid spends about $2 billion per year in federal and state tax money – and we want to ensure that DHSS is adequately determining who is eligible to receive those benefits.”

McGuiness pointed out that the annual statewide Single Audit has had repeat findings related to Medicaid eligibility for at least three years. The Single Audit looks at a small sample of Medicaid beneficiaries but is an accurate way to determine if larger, systemic problems could exist.

“Based on the repeated Single Audit findings, as well as other risk-assessment factors, I know that a performance audit of Medicaid eligibility will be beneficial for DHSS,”

McGuiness said. “But instead of complying with my data and access requests, DHSS has chosen to fight over this in court.”

Under Title 29 Chapter 25 Section 2507, state agencies that are represented by the DOJ can request permission to obtain outside counsel from the DOJ and the governor, which is what McGuiness did. The DOJ told McGuiness last month that it would agree with the governor’s office’s decision.

“This is a great day for Delawareans,” McGuiness said. “I fight every day for the state’s taxpayers, and this is an example of a wrong that has been righted. I am grateful to Gov. John Carney and his team for their insight and wisdom in this case.”

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Contact:
Alaina Sewell, Chief of Staff
302-857-3931
Alaina.Sewell@delaware.gov


State Auditor Kathy McGuiness and Insurance Commissioner Trinidad Navarro Partner for a Fraud Town Hall

DOVER, DELAWARE – Delaware State Auditor Kathy McGuiness and Insurance Commissioner Trinidad Navarro together will host a virtual Fraud Town Hall via Facebook live on Wednesday, October 21, 2020 beginning at 3:00 pm.

The Auditor’s Office and the Department of Insurance want to jointly raise awareness of the types of fraud schemes both agencies regularly encounter and ways consumers can protect themselves from becoming victims.

“Over the past several months, we’ve seen an increase in fraud complaints brought on by the coronavirus pandemic,” said State Auditor Kathy McGuiness. “Our responsibility as a watchdog is to ensure proper safeguards and internal controls are in place to combat it.”

“As the largest consumer protection office in the state, the Department of Insurance reviews more than 525 fraud referrals a year, filing 531 civil and 15 criminal cases last year,” said Insurance Commissioner Trinidad Navarro. “With new technologies entering the insurance and healthcare arena, and Open Enrollment for Medicare and the Affordable Care Act taking place in the coming months, it is more important than ever that we work together to detect, prevent, and respond to fraud.”

Delawareans are understandably fearful of the repercussions from the health and economic crisis and rightfully want to know what their elected officials are doing to protect them from fraud and scams. The Fraud Town Hall will provide them answers.

Watch live at FB.me/DeTv302.

Learn about the Delaware Auditor’s Office and Department of Insurance online at https://auditor.delaware.gov and https://insurance.delaware.gov/.

Contact: Alaina Sewell, Executive Assistant, Alaina.Sewell@delaware.gov, 302-857-3931

 


Statewide Unit Count Agreed-Upon Procedures Report – School Year 2017–2018 – Sussex Academy

State Auditor, R. Thomas Wagner, Jr., has released the School Year 2017-2018 Statewide Unit Count Agreed-Upon Procedures Report for Sussex Academy.

The Office of Auditor of Accounts (AOA) performed procedures to determine whether Sussex Academy properly included selected students in the September 30th Unit Count.

The engagement was performed by AOA in accordance with Government Auditing standards, issued by the Comptroller General of the United States.

For the full results of the Statewide Unit Count Agreed-Upon Procedures Engagement for Sussex Academy, please see the full report available on AOA’s website auditor.delaware.gov.

If you have any questions, please contact R. Thomas Wagner, State Auditor, at 302-739-5055 or r.thomas.wagner@delaware.gov.


State Auditor R. Thomas Wagner, Jr. releases the Sustainable Energy Utility, Inc. Inspection report.

January 12, 2016

Dover, Del. – State Auditor R. Thomas Wagner, Jr.’s Office performed an inspection of the Sustainable Energy Utility, Inc. (SEU) and its relationship to the State.

All State agreements related to the SEU energy conservation measures projects ensured that the State was obligated to pay into the future without a process to measure actual energy savings or ensure that annual energy savings analyses provided by the contractors are thorough and accurate. The State also failed to include the standard funding out clause used to protect the State from over-obligating when future availability of State funds is unknown. These funding out clauses are ordinarily required by all other State contracts.

In 2011, the SEU issued energy efficiency revenue bonds that yielded $67.4 million to finance energy conservation measures for multiple State organizations. Despite representation that the bonds were not backed by the full faith and credit of the State, the bond repayment is exclusively supported by the State’s irreversible long-term payment commitments to the SEU.

“At the conclusion of this inspection I was left asking: ‘How and why was the State’s best interest subordinated to the interest of the SEU and its partners?’” said State Auditor Wagner.

The Legislative Mall Complex project alone utilized more than $4.8 million in SEU bond proceeds for construction and will require more than $8 million in repayments over a 20-year period. According to Moody’s Investors Service, the State’s failure to appropriate any portion of the repayments will cause insufficient funds to be deposited into the SEU’s Bond Fund to pay principal and interest on the bonds when due.

The report further outlines concerns with the energy conservation measures performed, including changing light fixtures and bulbs, installing new heating and cooling units that proved to be unreliable and improperly installed, and reducing water flow on sinks through the installation of faucet aerators that were eventually removed because they proved to soak employees as they washed their hands. Ongoing monitoring of cost savings for the Legislative Mall Complex project is solely based on calculations using manufacturers’ estimates of energy usage and spot measures of installed equipment. Further, the State’s accounting for the energy funding and contractual payments is so complex, the State will never know whether true cost savings is occurring.

In the end, the additional costs related to these projects, including operational disruptions during and after the energy conservation measures, were absorbed by an already overburdened State budget, especially since the State’s Energy Performance Contracting Act required State funding to participating organizations remain the same even if energy savings were achieved through this project.

Additional information about the SEU can be found at: Sustainable Energy Utility, Inc. Inspection

For more information, please contact Kathleen A. Davies, CPA-PA, CISA, CGFM, CGAP, CFE, Chief Administrative Auditor/Deputy, at 302-857-3919 or kathleen.davies@delaware.gov.


State Auditor Issues a Report on Charter School PCard and Personal Reimbursement Expenditures

Dover, Del. – State Auditor, R. Thomas Wagner, Jr., is pleased to report that MOT Charter School and Thomas A. Edison Charter School consistently got it right by establishing and following internal controls, which helped ensure compliance with rules and regulations. The same cannot be said for Delaware College Preparatory Academy (DCPA) and Kuumba Academy Charter School (KACS).

The DCPA Board President claimed she made an unrecorded related party loan to the school. As part of her response to the otherwise untraceable arrangement, she provided a letter dated August 2011 in which she approves her loan to the school. The lack of appropriate accounting and related party disclosure aside, she stated she was not aware of the “why and how’s of the [$11,252.87 in] transactions” for which she was reimbursed. The Board President’s reimbursements were highly questionable as legitimate business expenses given the nature of the transactions and the missing or poor quality supporting documentation. The Executive Director of DCPA also received $18,025.78 of which $11,740.87 (65%) lacked supporting documentation to justify the reimbursement. At one point DCPA’s Board President writes “…I am not following why DCPA needs to justify expenses incurred to run its business…”

Kuumba Academy Charter School (KACS) processed payments made in addition to the employees’ salaries for the same work already included in their job descriptions. This arrangement took place for the Head of School, the Assistant Head of School, and a custodian to provide payments for the same services they were employed to perform. In the case of the custodian, his contract was almost as much as his salary as a full-time employee. During the same period, a Managing Director of a CPA Firm held a contract to perform the “Financial Director” responsibilities for the School at a cost of $4,000.00 per month.

A copy of the complete report can be found at: Charter School PCard and Personal Reimbursements Inspection.

For more information, please contact Kathleen A. Davies, CPA-PA, CISA, CGAP, CGFM, CFE, Chief Administrative Auditor, at 302-857-3919 or kathleen.davies@delaware.gov.