Legislative auditors report fewer long‑running open findings but flag foster‑care and travel control gaps

April Renfro, director of Legislative Audits in the Legislative Services Office, told the Joint Finance‑Appropriations Committee on Jan. 7 that the office’s annual uncorrected findings report now covers four years of open issues, down from roughly five in recent years.

The report, Renfro said, is intended to give legislators advance notice of agency problems that may affect budgeting decisions and to provide links to audit reports so workgroups can follow up. “Seventy percent of our uncorrected findings are from the current reporting period,” Renfro said, noting that most of those remain open only because follow‑up procedures have not yet been completed.

Why it matters: Open audit findings can indicate weaknesses in internal controls or compliance that affect how agencies spend appropriations. The committee’s co‑chairs underscored that persistent or high‑risk findings can influence future appropriations, and in some cases the committee has withheld funding until an agency implements corrective action.

Renfro described the office’s portfolio and timing: the auditors perform the annual audit of the state’s comprehensive financial report (ACFR), an annual single audit that covers federal award expenditures, and accountability (management review) reports that visit every agency at least once every three years. The ACFR opinion is typically due Dec. 31 and the single audit by March 31; Renfro said delayed delivery of agency schedules — in particular delays tied to the state’s LUMA system transition — has pushed the office’s projected opinion date into mid‑March and may also delay the single audit.

Renfro outlined common finding types and follow‑up practices. Accountability reports focus on internal‑control weaknesses and compliance at a level where materiality for the ACFR may not apply. For accountability follow‑up the office typically conducts a 90‑day check, a first annual follow‑up and a second annual follow‑up, and classifies status as corrected, partially corrected or uncorrected.

Examples cited: Renfro gave examples of specific open or significant findings. One older uncorrected accountability finding at the Department of Fish and Game involved noncompliance with state travel policy and insufficient travel documentation; after initial partial corrective action the finding reverted to uncorrected because auditors could not get sufficient documentation following the agency’s July 1, 2023 transition to the LUMA centralized payroll/financial system.

Renfro also described findings in the Department of Health and Welfare’s 2023 accountability report tied to qualified residential treatment program (QRTP) foster‑care placements. In a sample of 19 QRTP placements auditors found: 10% lacked a completed placement assessment; 5% omitted required placement details; 21% had no readily located court order; 5% were not placed within 60 days of the placement start; 84% did not retain a court notice identifying placement date and level of care; and 42% lacked evidence that required 30‑day case consultations occurred. “That is qualitatively significant because we’re talking about youth being placed in a higher level treatment facility,” Renfro said.

Information‑system and program‑control issues were another focus. Renfro said systemic risks commonly arise when system controls allow segregation‑of‑duty gaps or when annual updates to program benefits (for example, a Low Income Home Energy Assistance Program benefits matrix) are not documented or approved; those weaknesses increase the risk that errors will go undetected even if no error is found in a given audit cycle.

Follow‑up and next steps: The audit office will deliver the uncorrected findings report to the committee the same day; Renfro said five accountability reports were still pending issuance and the audit office planned to complete the ACFR audit in mid‑March. She said the office would contact the federal cognizant agency (HHS) about single‑audit timing and noted there are no automatic federal extensions since pandemic‑era waivers expired.

Committee reaction: Committee members asked about reasons findings remain open beyond one year; Renfro said causes include annual reporting cycles, the need for statutory or program changes, training and policy development, and technical constraints tied to new systems. Co‑chairs said withholding funds or requiring corrective action are tools the legislature has used when audits show persistent noncompliance.

Ending: The audit review framed several budget‑year considerations for workgroups: items with outstanding or systemic findings should be tracked when the committee reviews agency budgets, and delayed financial statements may compress audit follow‑up into the summer accountability schedule.