State agencies scramble after auditors reveal billions in unsupported federal aid

(WBFF) — Maryland is grappling with a $1.4 billion budget deficit, and state auditors have uncovered an additional financial challenge.

A year-end report from Maryland’s Office of Legislative Audits revealed that eight state agencies have billions in federal funds that were not properly recorded. In some instances, agencies spent federal funds before they were received.

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“Some of it is…we’re counting on grant funding that hasn’t come from the feds so we’re forward funding with state dollars expecting those federal dollars will come through at some point,” Del. Ryan Nawrocki said. “We may never see those kinds of dollars so there’s potential here for extreme risks and we may never see any of these funds.”

The audit found $425 million in unsupported funds at the Department of Health, $1.31 billion at the Department of Human Services, $176 million at the Department of Education, $600 million at the State Highway Administration, $755 million at the Maryland Transit Administration, $86 million at the Department of Emergency Management, and $63 million at the Labor Department. In total, auditors uncovered $3.42 billion, mostly in federal funds, that could not be supported on state documents.

The auditors’ report stated, “To the extent these unsupported revenue entries are uncollectible, they may represent deficit balances that require State general funds or other State funds to resolve.”

Nawrocki emphasized the gravity of the situation, saying, “Those kinds of numbers are absolutely unsustainable. They are absolute budget busters. We do not have those monies to cover that…” He predicted that taxpayers would bear the burden of the unsupported funds, potentially jeopardizing future state projects. “Why would I give the state of Maryland billions to build a bridge when there’s no indication we can manage those funds,” Nawrocki questioned.