LANSING – The state spent $21.2 billion in federal funds during the 2012-13 fiscal year, but in some cases it did not ensure that the right people or agencies received the funds or that only the right people had access, an audit report released Monday said.

The single audit for the state for the fiscal year questioned $9.6 million in federal spending among 53 findings of insufficient controls, improper reporting or some other failure to meet program or accounting requirements.

The largest of the questioned costs was $4.6 million, the federal share of Medicaid funds spent on those who turned age 21 during the fiscal year. Auditors found that the Department of Human Services had not reviewed all the recipients in time to determine if benefits should continue after they turned 21.

DHS, along with the departments of Community Health and Technology, Management and Budget, are currently working to determine why the reviews are not being conducted on time and expect to have a corrective action plan by October.

The department also paid $1.78 million through the Energy Direct program to recipients who were not eligible for the assistance, auditors found. DHS said it had relied on energy providers to determine who was eligible and for how much but will, in the future, better track eligibility on its own.

Among other findings, DHS did not ensure that welfare recipients claiming commuting expenses were actually using the transit for work-related travel. DHS and the Department of Transportation had ridership surveys to determine the purpose of each trip, but auditors found the departments were not ensuring local transit agencies were using the surveys.

The finding questioned the $1.1 million the state spent on the program, arguing federal officials could seek proof that the state had spent the funds correctly and could demand a refund if that proof was not provided.

The auditors also found a number of places where the state had not sufficiently secured access to various records, but did not find any questioned costs related to those security lapses.

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