By Ruth Brown, Idaho Reports
Legislative auditors claim they found flaws in grant fund distributions made by the Idaho Department of Health and Welfare and will refer the matter to the Attorney General’s Office, according to an audit released Monday.
Joint Finance-Appropriations Committee co-chairs Rep. Wendy Horman, R-Idaho Falls, and Sen. C. Scott Grow, R-Meridian, alerted Attorney General Raúl Labrador in February to their concerns over the Community Partner Grant Program and how IDHW awarded funds to the 80-plus recipients.
The legislative accountability report is publicly available on the Legislative Services Office website, and it was shared with Idaho Reports by Horman.
The audit states “Based on the evidence available, the lack of controls related to expenditures of public funds allowed for grant recipients to use the funds for ineligible purposes and for ineligible age groups that did not meet the purposes specifically defined in the appropriation laws. These findings are serious enough to report to the Idaho Attorney General pursuant to Idaho Code, Section 67-702(1)(e).”
That section of law requires auditors to “Report to the attorney general all facts which may indicate malfeasance, illegal expenditure of public funds or misappropriation of public funds or public property for such investigation or action, civil or criminal, as the attorney general may deem necessary.”
Illegal expenditure of public funds is defined as the use of funds for another use or other unauthorized purpose than that for which the appropriation was made, according to the audit.
The Community Partner Grant Program uses federal American Rescue Plan Act funds for after-school programming to address learning loss and behavioral health impacts from the pandemic.
Legislators specified in the program’s 2021 appropriation bill, House Bill 400, that none of the funds would go to preschool programs and that they must be used to serve kids ages 5-13. During the 2023 session, Horman questioned IDHW Director Dave Jeppesen about this during a JFAC hearing, saying she’d heard some of the funds had been used for younger children, in violation of the law passed in 2021. At that time, Jeppesen told the committee some of the grant recipients also served children younger than 5, but that the organizations understood the funding needed to serve their school-age children.
The audit by the Legislative Services Office issued several findings, including that some recipients received more than the maximum amount allowed by law and that IDHW did not maintain sufficient documentation to support its award decisions for the Community Partners Grants.
The audit also alleges IDHW did not properly review applications for the grants and did not provide evidence that the awardees ensured compliance with the age requirements.
The audit also claims the payments distributed by IDHW for phase 1 of the Community Partners Grant exceeded the $36 million appropriation for Fiscal Year 2022 by $427,350. The audit also found that grant payments were not made on time for four out of seven required payment periods.
In the audit, IDHW management disagreed with the findings by LSO and its statement included the following: “IDHW did properly document award decisions related to coverage areas by reviewing applications in detail and having applicants attest to their coverage area. Since the state appropriation bills did not specify how this was to be accomplished, IDHW used federal guidance for the use of ARP Act funding. That guidance said that attestations were sufficient.”
IDHW management also disagreed with the finding they distributed more money than was allocated, and argued the legislation offered no minimum cap on how much could be spent through the program, according to the audit.
“The Idaho State Legislature appropriated ARP Act funds to IDHW in the 2021 session via House Bills 395 and 400 in the amount of $106,000,000 and directed that at least $36,000,000 be used for the Community Program Grants,” IDHW management wrote in the audit. “This means that the Legislature appropriated more than enough to cover the $427,350 distributed above minimum amount of $36,000,000.”
Health and Welfare’s response
On Monday evening, IDHW Director Dave Jeppesen issued the following statement: “The department welcomes the LSO audit review and the transparency it affords the public to understand the Idaho Community Partner grants and the support they provide Idaho families and children.
“While we agree with the many factual observations in the report that recognize the diligence and thoroughness of the department’s process, the department respectfully disagrees with all of the report’s findings.
“A judge recently threw out the case involving Attorney General Raúl Labrador’s investigation into the administration of the grants due to his conflict of interest, unless the AG appoints a special prosecutor. AG Labrador’s office, through a legal opinion, validated that the funds were distributed legally, in compliance with both federal and state law, and he cannot sue his client for following the legal advice of his office. In a related case, the Idaho Supreme Court will hear on appeal a case that gets to the heart of whether AG Labrador has the legal authority at all to look into the matter.
“All along, we have welcomed independent, unbiased review of the department’s administration of the Community Partner grants. We will meet any review, audit, or investigation with cooperation because we stand by our work. We await the AG’s next step with confidence knowing the grants were distributed legally, as affirmed by his office. In addition, adequate controls were in place to ensure the grants went only to eligible purchases on behalf of eligible children.
“I am so grateful to the staff at DHW for working incredibly hard to create a successful, appropriate, accountable program that has positively impacted thousands of Idahoans, especially children. The grants are helping children across Idaho learn and stay safe, and we’re proud to be a part of it.”
Ruth Brown | Producer
Ruth Brown grew up in South Dakota and her first job out of college was covering the South Dakota Legislature. She’s since moved on to Idaho lawmakers. Brown spent 10 years working in print journalism, including newspapers such as the Idaho Statesman and Idaho Press, where she’s covered everything from the correctional system to health care issues. She joined Idaho Reports in 2021 and looks forward to telling stories about how state policy can impact the lives of regular Idahoans.
