State audit flags gaps in oversight of opioid-recovery funds, provider quality and settlements

A legislative audit of Nevada’s opioid-epidemic response identified gaps in grant management, provider oversight, infant "care plans," and litigation-cost controls that pose risks to federal funding and program effectiveness.

The audit covered the Division of Public and Behavioral Health (DPBH), the Attorney General’s Office (AGO), and the Department of Human Services (DHS). Presenting auditors summarized broad findings: incomplete reporting and site visit follow-up for grant subawardees, deficient invoice support for reimbursements, repeat noncompliance among certified treatment providers, and weaknesses in the handling of litigation interest and law-firm invoices.

Auditor findings and examples: Auditors tested 17 contracts and 33 invoices tied to substance-use grants and found multiple instances of missing receipts, inadequate supporting documentation, charges outside contract scope and untimely reconciliation. DPBH lacked documentation of required risk assessments for many subawardees and could not show timely or consistent site visits; of 20 site visits tested, 15 had incomplete documentation and several corrective-action items were not resolved. The audit also found case-management gaps in infant care plans: nine of 20 plans lacked documented substance-use treatment referrals and 12 lacked adequate provider contact information.

Attorney General review: The audit confirmed AGO’s calculations for recoveries but found interest charges and certain law-firm invoices were incorrect or inadequately documented. After queries by auditors, a law firm refunded more than $79,000 and AGO reduced excess interest accruals previously charged to the state. "Accurate calculations and processing of settlement funding ensure the state, local governments, and law firms receive appropriate funds," an auditor said.

Agency responses and next steps: DPBH and DHS accepted numerous recommendations. DPBH agreed to improve federal-grant oversight, institute documented plans of correction and strengthen subcontractor monitoring; AGO instituted revised procedures for contingent-fee contract interest and invoice verification. DHS supplied corrections to its public reports on settlement spending and committed to stronger controls.

Why it matters: The audit covers more than $121 million received into the state's Fund for Resilient Nevada and reviews $1.14 billion+ in opioid litigation recoveries and recoveries management — funds intended for treatment, prevention and community services. Weak controls can jeopardize federal funds and reduce public trust in program effectiveness.

What lawmakers asked: Committee members probed whether DPBH had sufficient staff to manage infant care plans and emphasized the need to link grant funding with timely subrecipient oversight. Several members requested six‑month follow-ups and clearer interagency duties following the state's organizational changes (creation of the Nevada Health Authority and transfers of some functions).

The Legislative Audit Division will track agency corrective actions and request status updates, including documentation that site-visit deficiencies are resolved and that AGO’s invoice and interest‑review controls remain in place.