Over the past several months, I’ve written about the many changes coming to Missouri’s welfare programs as a result of the One Big Beautiful Bill (OBBB). One of the most impactful changes involves the Supplemental Nutrition Assistance Program (SNAP). In short, if Missouri doesn’t get its SNAP payment error rate below 6%, state taxpayers will start paying for a portion of the program’s benefit costs (the federal government currently covers 100% of benefits), which could potentially increase the state taxpayer cost to $400 million per year. A similar change is coming to Medicaid.

Despite accounting for roughly one fifth of total U.S. healthcare spending, Medicaid has until now lacked stringent federal accountability for payment errors. Just last year, more than $31 billion in improper payments were made across the program according to the U.S. Department of Health and Human Services (HHS). The OBBB requires HHS to reduce state Medicaid matching payments (more here on how Medicaid is financed) starting in 2030 when improper payment rates exceed 3% of total Medicaid expenditures.

Missouri should be particularly concerned about this change. In 2022, when the state’s Medicaid program was last audited by the federal government, its improper payment rate was 4.2%, which already exceeded the new 3% threshold. And there’s little reason to believe things have improved since then. Just last month, I wrote about the recent state audit showing that Missouri lacks systems to check enrollees against death records and that thousands of recipients went years without having their eligibility verified.

The financial implications for Missouri could be substantial. With more than one in five Missourians now on the program and Medicaid already consuming a massive portion of the state budget, even a small reduction in federal matching payments could force state taxpayers to cover millions more in costs.

The good news is that Missouri has more time to address this than it does for SNAP. The bad news? Given the state’s track record on technology modernization and the sheer volume of problems that need fixing, there’s plenty of reason for skepticism about whether Missouri will rise to the challenge.

While the OBBB’s focus on program integrity might be a nuisance for state bureaucrats, there’s no doubt that a corrective measure is long overdue. Taxpayers shouldn’t be burdened with millions (or perhaps billions) in new Medicaid costs because our state can’t get its improper payments under control.

The post Medicaid’s Wake-Up Call appeared first on Show-Me Institute.

Unfortunately, that shocking finding is only one piece of the bad news included in the report. The same audit also revealed that thousands of people have remained enrolled on Missouri’s Medicaid program for up to ten years without the state checking whether they’re still eligible. Federal law requires annual eligibility reviews, but Missouri’s outdated IT systems somehow blocked the state’s Department of Social Services from checking the information of around 10,000 recipients for up to a decade. To be fair, some of these individuals might still qualify for benefits, but many probably do not. The point is that the state doesn’t know one way or the other.

The issues outlined in the audit are a perfect illustration of the many problems with Missouri’s Medicaid program that I’ve been writing about for years. This is an enormously expensive program that is riddled with waste and relies on outdated computer systems that are only making things worse.

Given Missouri’s budgetary uncertainty, it’s even more important that Medicaid benefits only go to people who are eligible for them. Eligibility reviews aren’t just bureaucratic hurdles with no purpose. Circumstances that make people eligible to receive welfare benefits change all the time. They find a job. They get married. They might even die. It’s essential that the state’s computer systems know this information as soon as possible to ensure that tax dollars aren’t being misspent.

Perhaps the worst part of the audit report is the recognition that these troubling findings aren’t new problems at all. Previous reports highlighted both the “death match” issue as well as the recipients who weren’t getting their eligibility checked. Some might remember that Medicaid eligibility redeterminations were a hot topic while they were paused during the COVID-19 pandemic, but it’s important to point out that these issues predate 2020, so we can’t just blame the pandemic.

This is another reason why some of the reforms I outlined from the One Big Beautiful Bill are so needed. Modernizing the state’s computer systems and improving eligibility verification so that errors like these don’t happen should be a top priority. Medicaid is far too expensive, and its costs are growing at far too an alarming rate for this level of waste to continue. What’s the point of having eligibility rules if they aren’t going to be enforced?

The post Checking Medicaid’s Pulse appeared first on Show-Me Institute.

When one thinks of no-show political jobs in Missouri government, most people (at least those with a knowledge of Missouri history) would think of the infamous Pendergast political machine of Kansas City a century ago. Giving out jobs to political supporters who rarely, if ever, were required to actually show up to work was a staple strategy of that machine (and many others). Over the past decade though, there has been another job reminiscent of the well-paid, no-show jobs of political yore: the St. Louis County Auditor.

In June, the St. Louis County Council fired the county auditor, Ms. Toni Jackson, for lack of work output after her office completed only two audits in her more than three years in the position. (The county auditor is one of the only jobs in county government that reports to the council instead of the county executive.) Jackson had been hired in 2021 after the council had fired the previous auditor, Mr. Mark Tucker, also for lack of audit output. How little work have the last two auditors been doing? A quick perusal of the St. Louis County Auditor’s Office website shows that the office has released just 13 reports since 2018. Many of these reports do not qualify as “audits.” For example, three of the 13 reports were short 2018 memos about pet adoptions.

By comparison, the St. Charles County Auditor’s Office released 13 audits in 2024 alone, many of them substantial. If you are keeping score, that is 13 audits in one year in St. Charles County, and 13 reports (including a few actual audits) over eight years in St. Louis County. As frustrating as the lack of production in St. Louis County has been, one almost has to admire the audacity of it all. In Tucker’s case, he also wasn’t properly qualified for the job, so some of the blame for hiring him was on the council. In Jackson’s case, she was well-qualified, at least on paper, so the fact that she didn’t do the work is all the more frustrating.

It’s not like St. Louis County government is so clean that it has no need for auditors. I know of at least two cases of county employees embezzling large amounts of money in the past two decades. A qualified (and courageous) auditor could have raised questions about the activities of former St. Louis County executive Steve Stenger, who went to prison for various nefarious activities right when the prior auditor was busily engaged in doing nothing. A state audit of Stenger’s criminal actions as county executive identified Tucker’s lack of qualifications and actions as one of the reasons Stenger got away with his activities for as long as he did. Stenger, a CPA himself, was well aware of Tucker’s poor record as auditor. The former county executive routinely criticized the council for hiring Tucker while quietly benefitting from Tucker’s inability (or desire) to track any of Stenger’s illicit actions.

There is a pressing need for quality audits in local government. In a review of New York State comptroller audits of New York municipalities between 2003 and 2009, 234 out of the 259 audits included reports of deficiencies and recommendations for improvements in internal controls. Twenty-five percent of those cities with internal control problems had funds missing or unaccounted for (though outright fraud or theft was likely not the reason in every one of those instances). Within St. Louis County, two unsupervised clerks were charged in 2023 with stealing $650,000 from the village of Flordell Hills.

One of the recent St. Charles County audits identified several county-operated phone lines that the county was improperly paying phone taxes on. (As a government agency, it is supposed to be exempt from those taxes.) The audit identified the oversight and the matter was corrected. Have the last two St. Louis County auditors saved taxpayers money with insightful analysis and helpful digging? Since it is impossible to identify problems by audits when you don’t do any real audits, we all know the answer to that question is “no”.

Unreliable auditors have compromised the effectiveness of St. Louis County government in recent years. While outside auditors have reviewed the county’s annual financial statements for accuracy, the lack of a proactive internal auditor has deprived county residents and taxpayers of the watchdog they need and deserve.

Tom Pendergast may have mastered the use of the no-show political patronage job, but it was auditors who helped end his reign and send him to prison for tax evasion. Government auditors aren’t going to detect waste, fraud, or errors with taxpayer dollars if they don’t show up to do the job in the first place. Hopefully, that simple requirement will be understood by whomever the council hires next.

The post In St. Louis County, Who Will Audit the Auditors? appeared first on Show-Me Institute.

Secrecy isn’t standard practice. The Economic Development Corporation—which oversees the TIF Commission and other incentive bodies—does not require NDAs.

These agencies also hold more public meetings, solicit community input, and include representation from schools and libraries. Mayoral appointments to the TIF Commission must be confirmed by the city council. In contrast, the mayor appoints PortKC board members unilaterally.

This lack of transparency disserves the public. While developers might prefer NDAs when pursuing public subsidies—which is a separate concern—here, it’s the public agency itself insisting on secrecy. That’s even more alarming.

PortKC has other problems, some of which I detail in a recent column for The Kansas City Star:

A series of audits from 2021 through 2024 flagged serious internal control problems, including one where the finance director had full authority over journal entries, deposits and account reconciliation — with no oversight. Port KC has repeatedly promised to fix these issues and repeatedly failed to act.

PortKC’s transparency problem is compounded by persistent failures in oversight. A string of audits from 2021 through 2024 flagged major internal control issues. In one case, the finance director had sole authority over journal entries, deposits, and account reconciliation with no checks in place. PortKC acknowledged the problem and pledged reform but never followed through.

The 2024 audit revealed yet another compliance failure: the agency hadn’t verified whether its development partners were barred from receiving federal funds—a basic federal requirement known as “Suspension and Debarment.” Given PortKC’s increasing intake of federal money, this oversight is especially serious.

These aren’t isolated lapses. PortKC also failed to properly vet Lux Living in 2022. The pattern is clear and ongoing. With long-standing problems still unaddressed, the question is no longer whether something will go wrong, but when.

These issues matter more than ever. At the time of my Star column, I noted PortKC might be involved in financing a downtown park for the Royals. That’s now more likely: the Kansas City Business Journal reports that tax-free bonds via PortKC are under discussion.

Meanwhile, city officials are exploring ways to approve deals without a public vote. Combine that with PortKC’s built-in secrecy, and the result is troubling: public funds deployed without public oversight.

The post Why Is PortKC Keeping Secrets? appeared first on Show-Me Institute.

Back in 2016, I noted that Jackson County Executive Frank White said of the tax at its renewal: “Anything that we can do to help our citizens in terms of prevention, and being proactive in what we do, is really what this (tax) is about.”

I pointed out at the time that the DARE program, funded by the COMBAT tax, has failed to show positive results in the research studies that have examined its effectiveness.

Four years later, in 2020, I mentioned an audit of the tax by then-Auditor Nicole Galloway. She wrote: “The county has not developed a plan for ensuring that performance evaluations of the programs funded by COMBAT are performed annually as required by county code.”

Now, in 2024, precious little seems to have changed. In a column for The Kansas City Star, I noted:

COMBAT doesn’t appear to measure outcomes. The closest it comes is a Community Impact Report, which relies chiefly on anecdotes and testimonials — many from people with financial interests in supporting COMBAT. A clue COMBAT doesn’t monitor program effectiveness is a note in the report indicating the number of those served by various programs are based on “grant application projections.” Not only is this relying on self-reporting by those receiving funds, but doing so at the moment they apply, when their plans are the most optimistic and least tested.

Kansas City’s homicide rate reached a record high in 2023. It has been a little lower so far this year, which is good. Unfortunately, it’s not clear that anyone knows why. Maybe it’s just a matter of chance.

While the lower homicide rate is great news, if we don’t measure the effect of the money we are spending, we risk not doing enough of what is working. That assumes any of it is working. We just don’t know, and that isn’t good enough for policymakers or the families of those lost.

If Kansas City leaders want COMBAT to be taken seriously, we must measure the effectiveness of the program and focus funding on what works.

The post Jackson County COMBAT Is Still a Failure appeared first on Show-Me Institute.

For a long time, the county had a county auditor. That part is the history. In 2017, the county hired a new auditor who, unfortunately, had no experience with auditing. That part is the tragedy. In the ensuing four years, the auditor has not 1) demonstrated growth in the job, nor 2) hired talented assistance, nor 3) resigned, but has continued to serve as the auditor of the largest county in Missouri without performing any audits. Let me repeat this, the auditor’s office does no audits. This, obviously, has been the farce.

But the latest turn is that the St. Louis County Council has finally decided to replace the auditor, and, lo and behold, it’s proving difficult to find anyone to take the position. That is the part that is yet to be named.

There are hundreds of millions of dollars coming into St. Louis County government from COVID stimulus, on top of the billion-dollar budget it already has. The county needs a qualified auditor and appropriate staff to help oversee that money and account for it. There have been at least two major embezzlement scandals in county government that I can remember, and that does not even count Steve Stenger’s various issues.

The county council offered the job to someone, but the person turned it down, even though the candidate had gone through the entire application process. Precisely why the person refused is unknown. Whatever the council has to do to attract qualified candidates, it should consider it. Raise the pay? If necessary, fine. Remove the CPA requirement? Fine (but keep the auditor certification requirements). Lower the pension vesting rules? Well, no, keep those as they are. Most importantly, just make sure whoever gets the job can document a history of doing real audits of government bodies or closely related things (such as large businesses).

But do what it takes to get someone in that office who can property do the job. Until that happens, I don’t know what to call the phase the county is in.

Perhaps “befuddlement?”

The post What Comes After Farce? appeared first on Show-Me Institute.

Numerous state audits over the past decades have identified the shortcomings of these districts. Now, the Kansas City Auditor has reviewed the use of CIDs in Kansas City and found many of the same issues. Show-Me Institute analysts have written about the problems with CIDs and TDDs for years. Common problems with these special taxing districts include financial abuses, lack of transparency, egregious boundary drawing to avoid voter participation, and much more.

The recent audit of CIDs in KC found many of the same things. From the article in the Kansas City Star (emphasis added):

In recent years, however, several CIDs have been created to benefit a single property owner or developer. In 2016, for example, the Intercontinental Hotel at the Country Club Plaza created a CID for itself to raise taxes earmarked to pay for upkeep of deterioration that the ritzy hotel argued had created blighted conditions. A similar CID was approved for the Romanelli Shopping Center in Waldo in 2019.

Both were criticized for using taxes to subsidize property maintenance. More than half of the existing CIDs in Kansas City benefit a single owner or developer, as opposed to community-based districts like those covering Westport or downtown.

The audit also noted that several CIDs — more than a third — have not submitted their annual budgets to City Hall, a requirement under Missouri law.

Legislation just passed by the state legislature makes some modest reforms to CIDs. These reforms include mandating annual financial reports, competitive bids for contracts, and requiring at least one independent board member. Hopefully, the governor will sign it. But we need to go much further and ensure these taxing districts cannot abuse the public trust for private gain, which is all many of them are good for. (Yes, there are exceptions to that.)

We need far more voter involvement, stricter reporting requirements, tougher limits on which expenditures are allowed, and total tax caps, just to name a few potential improvements. The single most important thing we need is a requirement that a full city (or county, for unincorporated areas) vote to approve all new CIDs and TDDs.  Absent greater reform, these special taxing districts will continue to just be the great Missouri tax-and-spend deception.

The post More Evidence of Failures of CIDs appeared first on Show-Me Institute.

Fast forward a decade or so, and the county has unfortunately appeared to have returned to those undistinguished roots. Several years ago, the council appointed an individual to the auditor position who had essentially no experience in large-scale government auditing functions. Over the past several years, the inability to actually do such audits has resulted in an auditor’s office almost without audits. This is not an exaggeration. It just takes a moment to compare the output of the St. Louis and St. Charles county auditor’s offices to see the striking difference. One has some very short reports over the past several years. The other (St. Charles) has real audits.

In fact, if you go to the two pages that list St. Louis County audits and reports, there is exactly one (ONE!) released financial document in all of 2020 and 2021, and that document is one (ONE!) page long.

This county auditor oversees a very small staff of just 2 or 3 people The auditor is not just overseeing audits and reports; he has to actually do the work himself. Members of the St. Louis County Council have recently asked for a state audit of county funds in light of the fact that the county auditor has not performed this vital task. The county council is also considering instituting tighter qualifications for the position.

With the enormous amount of money coming into St. Louis County over the past year from federal aid, the office of the county auditor is more important than ever. The county needs a qualified, independent auditor’s office to provide oversight on the spending. (The auditor’s office is one of two positions in St. Louis County government that reports to the council, not the county executive.)

Loyalty is a wonderful thing and calling for people to be replaced is not something anyone should ever be cavalier about, but it is well past time for St. Louis County to have an auditor who will get the job done.

The post St. Louis County Needs to Get the Auditor’s Office in Order appeared first on Show-Me Institute.

• The city’s TIF policy “does not clearly define the evaluation process or criteria to be used in project selection.” Without clear criteria, city officials have subjective power to pick which companies or developers receive hundreds of millions in tax incentives. This creates horrible incentives for companies and gives too much power to lawmakers.
• The city’s policy “does not include effective project cost limits or overall program cost controls.” The city’s TIF program has grown significantly over the years. Limits and cost controls would cap TIF usage, which would help assure that the approved projects have been carefully vetted and that only the best projects are selected.
• The audit also discovered that “projects were approved with flawed cost-benefit analyses, including overestimated revenue projections.” A cost–benefit analysis is supposed to be completed in the application process and helps to determine if TIF should be awarded. The audit found that of the thirteen projects analyzed, eight had cost–benefit analyses that contained serious flaws or were missing the cost–benefit analysis altogether.

In response to the audit, a city spokesman said that most suggested reforms are not required by state law. Just because something isn’t required by the state doesn’t mean it shouldn’t be done in order to instill fair practices and proper use of taxpayer funds. The problems with the TIF program have been talked about for years, and research suggests that incentive packages like these don’t work. How many chances do the city and this program get? How many times do these problems need to be pointed out before we start to see some real change?

The post How Many Chances Does TIF Get? appeared first on Show-Me Institute.

Our audit discovered that for almost the entire time the former mayor and former city clerk were in office, there was a pattern of blatant corruption and cover-up that cost the citizens of Parma more than $115,000,” Auditor Galloway said. “This was a betrayal of the public trust that requires accountability, and my office will continue our partnership with law enforcement to pursue justice for local taxpayers. . . .

The audit also estimated more than $7,000 in improperly recorded utility payments and adjustments to utility bills on the accounts of the mayor, water supervisor, the alderman who is the mayor’s father, an alderwoman, and a church. The city’s electronic utility system was destroyed in the city hall fire, but auditors were able to compile information for the audit from paper reports, bank statements and other documents.

The auditor’s full report can be found here.

We are hearing that among the items legislators are considering for a special session is a “Wayfair fix,” which notably would allow local governments to collect sales taxes on internet purchases. As we’ve said before, any such “fix” should be revenue neutral, but it’s become obvious that there should be another precondition: checkbook transparency. Any government wanting to tax the internet purchases of residents should be required, as a condition of such privilege, to regularly publish their transaction data with the state.

Show-Me Institute researchers have called for this transparency before, but Parma’s scandal reaffirms how pressing the initiative is, especially in these difficult economic circumstances where every dollar counts. If government can take your money through force, it should be telling you where it went. And if governments have to do that, well, hopefully we’ll have fewer Parmas in the future.

The post Parma Scandal Affirms: Mandatory Muni Checkbook Transparency Needed Now appeared first on Show-Me Institute.

SDs are political subdivisions of the state established to provide very specific services and improvements, such as sewer infrastructure, fire protection, and neighborhood security. Their narrow, singular purpose is why they are known as “special.” In Missouri, SDs can be established to impose and collect tax revenue for a wide variety of purposes. In addition to CIDs there are drainage and levee districts, sewer districts, port improvement districts, nursing home districts, and fire protection districts, to name just a few.

As the auditor notes in his announcement, there are currently 74 CIDs in Kansas City and their use “is growing, and our past audits noted CIDs did not consistently submit required reports to the city, and also identified accountability and transparency issues.”

One problem with CIDs is that they may be created and impose taxes without a vote of the people. CIDs may be formed by nonresidential voters such as commercial landowners and developers. These districts need only a single constituent to be created. As a result, a single landowner can (1) propose a district, (2) cast the single vote to establish the district and approve its revenue sources and projects, and (3) appoint or elect the district’s board of directors, which oversees district business. In short, CID laws allow a single landowner or developer to completely control all aspects of the district.

Given the huge opportunity for abuse, it is important that Kansas City ensure that this important power to tax is respected. In our 2019 paper on these districts, Graham Renz and I suggested a number of reforms for the state legislature—one recommendation requiring the approval of the voters of the entire municipality was passed out of this legislative session. Municipalities may not be able to enact many restrictions on these districts, but they are required to approve their creation in the first place. This effort in Kansas City to shed light on city oversight is welcome and necessary, even if not sufficient by itself.

The post Kansas City Auditor to Investigate Oversight of Community Improvement Districts appeared first on Show-Me Institute.

A 2017 KCPT documentary detailed the effect of the increases in water rates—240 percent since 2000—on many Kansas Citians, and the apparent inability—or unwillingness—of local leadership to do anything about it. All of this is due to a settlement with the EPA, which cited Kansas City for multiple violations of the Clean Water Act and forced the city to agree to extensive upgrades to its water and sewer system.

Taking the violations and the need to address them at face value, it is still fair to ask what is going on with the water department. How is it spending its money and are there opportunities to be more efficient? Here there might be an opportunity. In its 2019 endorsement of Quinton Lucas’s mayoral effort, The Kansas City Star editorial board quoted Lucas as saying at a prior candidate debate, “I’m not just open to a conversation on a state audit; I think we need a state audit of the water department.” This is welcome, especially since the previous mayor denied requests by the Missouri State Auditor to conduct an audit of the water department.

It may very well be that the city-run water department is a model of efficiency and that these frequent increases are necessary. If that is the case, there may be other opportunities to address rising costs in a way that does not so burden those among us who are at the most risk of losing service. Mayor Lucas, the city council, and indeed those at the water department should all welcome an audit, be it by the Missouri State Auditor, a private and completely independent firm, or both.

The post Audit the Kansas City Water Department appeared first on Show-Me Institute.

Local taxing districts are political subdivisions that fund specific improvements and services through taxes and fees, so taxpayers should be concerned by this bad rating. The government is taking and distributing hard-earned taxpayer money through these districts, but is it doing so responsibly?

Here are the findings as summarized on page 2 of the audit report:

So, is St. Louis responsibly taking and distributing taxpayer money? The answer is no.

The state auditor found serious problems with the creation and implementation of local taxing districts. These districts take a lot of taxpayer money each year. According to the report, CIDs bring in approximately $10 million each year, and in the last fiscal year TDDs brought in $3.8 million. This is bad news for taxpayers; the last thing we want is the city playing fast and loose with our money.  

Show-Me analysts have long been critical of special taxing districts in Missouri. There have been calls for reform of these districts in the past. While it’s great that more attention is being given to this problem, the time for reform is long overdue. When it comes to handling taxpayer dollars, the city needs to be doing a lot better than “poor.”

The post St. Louis is Doing a “Poor” Job with Local Taxing Districts appeared first on Show-Me Institute.

Things are no different in government. Analysts at the Show-Me Institute spend a lot of time combing through reports and audits, and as I looked through the state auditor’s 50 or so reports for this year, I found a whole lot of dust bunnies—nasty, government failure dust bunnies.

Of the reports that received a judgment (about half of the reports are follow-ups or monthly postings without a judgment), half enjoyed “excellent” and “good” results, while the other half received “fair” and “poor” marks. In short, about 50% of the public entities audited weren’t doing a great job by any stretch of the imagination. 

For context, here is how the SAO defines “Fair” and “Poor”:

Fair: The audit results indicate this entity needs to improve operations in several areas. The report contains several findings, or one or more findings that require management’s immediate attention, and/or the entity has indicated several recommendations will not be implemented. In addition, if applicable, several prior recommendations have not been implemented.

Poor: The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management’s immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.

Now, this all is a little abstract, so let’s consider some examples.

The City of Hamilton, the subject of SAO Report No. 2019-007, received a rating of “Fair.” For what exactly? Well, among other things, for lacking a road maintenance plan, for failing to stop conflicts of interest, for not following basic payment procedures, for not complying with Missouri’s Sunshine Law, for not giving the public library its money on time, and for failing to put its budget together in a proper way. So, while ‘fair’ might not sound so terrible, it is a long shot from being acceptable.

More troubling reports come from places like the City of Miller and Madison County. 

In Miller, west of Springfield, the city raised taxes for water treatment services but still can’t pay its bills, and has violated the state’s Clean Water Act. Basic timesheet procedures weren’t followed, city credit cards were not adequately tracked, the city’s budget wasn’t put together according to the law and was inaccurate, and the city hasn’t complied with the Sunshine Law. Most troubling is that the former police used city credit cards for personal expenses and kept his brother on the city’s payroll while he was working another job.

In Madison County, in southeast Missouri, where an investigation is ongoing, it appears taxpayers would pay their property taxes and then records of the payment would be deleted from county systems. The money from these transactions appears to have never made it to the bank. In short, it looks as if taxpayer money was being flat out stolen. Bad government? I think so.

With 114 counties, nearly 1,000 cities and villages, and thousands of other public entities across the state, bad government is a constant and ubiquitous problem. A liberty-minded skepticism of government seems warranted when reports like these make news. 

The post Show-Me . . . Lots of Bad Government? appeared first on Show-Me Institute.

The post Show-Me Now! TDDs: Public Money, Private Gain appeared first on Show-Me Institute.

This fact is made all the more obvious by this story, reported last week.

Missouri’s Medicaid program could have recovered as much as $27 million from more than 30,000 estates of deceased patients but did not file claims in time, according to a statewide audit of federal programs released Tuesday.

Federal and Missouri laws allow the state to recover Medicaid funds spent on a participant as a state debt but a claim against the person’s estate in probate court must be filed within a year of their death. Of 9,321 cases closed in fiscal year 2014 by the MO HealthNet Division, an average of $15,000 was recovered from 6 percent of those, according to the audit.

The $27 million estimate is based on a similar estimated recovery rate for the 30,000 cases that were past the deadline to file. . . .

According to the audit, “MHD personnel indicated there are not sufficient staff in the Probate and Estate Unit to process all probate estate cases timely and cases are not prioritized in an effort to maximize recovery.” The department says it will work to fix the problem but that response is a recurring theme in audits of Missouri’s Medicaid program.

Indeed, there were more problems uncovered by the audit that a short news story frankly can’t get to, including documentation, oversight, payment, and coding problems. In fact, the sentence construction of “As noted in X previous audits” dots the report’s summary. In other words, many of these are enduring, not passing, problems.

If you believe in good government, the department’s semiannual refrain of “We’ll do better next time” should be intolerable. The solution isn’t growing the program; it’s fixing it. There are ways to make the Medicaid program in Missouri better. Expanding a broken status quo is not one of those ways.

The post Audit: Medicaid Program Rife With Problems appeared first on Show-Me Institute.

But the state’s school districts aren’t the only state programs that deserve a closer look from Missourians. So, too, does the state’s Medicaid program, and neighboring state Illinois serves as a good example. From the Wall Street Journal late last year:

The federal government requires states to do an annual audit of the Medicaid rolls to ensure that participants are eligible, but in most states few people are removed. Ms. Bellock wanted to use an outside, private firm, Virginia-based Maximus, to audit [Illinois’s] 1.3 million Medicaid case files—which represents about 2.7 million individuals. The company has more extensive databases than the state and would likely identify more ineligible Medicaid beneficiaries.

Maximus recommended removing 249,912 cases by the end of February 2014, according to the state. By law, state employees had to review the recommendations and decide if cancellation is appropriate. The state removed 148,283 cases—about 234,000 individuals, as many cases represent families—from the Medicaid rolls.

Many of the removals suggested in Illinois were probably the product of expected churns in incomes; as people earn a little more money, they may no longer qualify for the Medicaid program. There’s nothing necessarily nefarious about that.

But whether people receiving benefits improperly are doing so because their incomes have recently changed or because they’re unambiguously defrauding the system, that doesn’t change the fact that the money has been misspent—and misspent needlessly. No one knows for sure if the same kind of waste that happened in Illinois is going on in Missouri, but that’s sort of the point; like in the St. Joseph School District and Illinois, the only way we can prevent future problems is with vigilance today.

Wasted money hurts the people Missouri is trying to help by siphoning off limited state resources, and that’s why Illinois’s third party eligibility verification framework, which appears to have effectively identified thousands of ineligible beneficiaries in the Land of Lincoln, is one Missouri may want to consider. Our state’s auditors deserve our immense appreciation for the work they do currently, but they don’t always have the resources or data to do some of the analyses some of these private vendors can do. As a supplement to our auditors’ work—and mark your calendar, because I don’t say this often—the state should think about following Illinois’s lead.

The post In Support of An Outside Audit of Missouri’s Medicaid Program appeared first on Show-Me Institute.

Currently, only 42 cents of every dollar issued actually goes toward the construction of low income housing; the remainder goes to the federal government in the form of increased federal income taxes, to syndication firms, and to investors. State law allows claiming the same project costs under two or more tax credit programs. This “stacking” of tax credits can be lucrative for developers, but it generates no additional economic activity or state benefit.

To reiterate: Less than half of the money spent through the LIHTC program… actually goes toward the building of low-income housing. Page 16 of the audit goes through all of the auditor’s recommendations, including the idea of adding substantive spending caps to the LIHTC. That’s an excellent idea. When you have a billion-dollar budget-buster like this sitting out there, a strong cap is an obvious and common sense reform, though the Missouri House’s track record on tax credit reform issues has been abysmal.

Either way, the auditor’s report recognizes the need for reform to the LIHTC. It’s an open question whether the legislature will also recognize the problem.

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What has shocked people the most about the audit may be the salary and benefit package that the superintendent receives. The report noted:

The district’s superintendent at June 30, 2013, was Dr. David McGehee. His annual compensation was $258,660, which included a deferred compensation allowance of $19,716, family medical insurance of $15,377, and association expenses of $12,000. He was also provided a district vehicle for business and personal use.

Let me be clear. That is $258,660 plus those other benefits. None of this should come as a shock to readers of the Show-Me Daily blog. In 2010, we published a policy study detailing the actual pay of public school superintendents in Missouri and we noted that many receive significant perks.

One of the things we highlighted in that paper was that there seemed to be no correlation between academic performance of students and the compensation of the superintendent. From just a cursory glance, this seems to be the case here. From 2009 to 2013, the percentage of Lee’s Summit students scoring proficient or advanced in math and language arts has remained almost unchanged. Other districts, however, have improved and Lee’s Summit has dropped in the rankings. In 2009, the district was in the top 35 districts in terms of performance on the math and language arts exams. The district since has dropped to 90th and 53rd, respectively.

In approximately the same time frame, the superintendent’s salary has increased dramatically. In 2007, he was paid a salary of $170,000. In the seven years since then, he has received a 52 percent raise. According to data that the Missouri Department of Elementary and Secondary Education collects, this makes him the highest-paid superintendent in the state.

The post Mirror Mirror, Who Is The Highest Paid Of Them All? appeared first on Show-Me Institute.

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