State budget roundup, Nov. 22

SMALL-TOWN FRAUD PERSISTS: State Auditor Mary Mosiman said Tuesday her office is conducting up to 25 investigations of small-town fraud every year. During her yearly budget request hearing with Gov. Terry Branstad, Mosiman said she issued 25 special investigation reports since Jan. 1 and has 26 special probes underway around the state that will result in more special reports on alleged fraudulent activities in Iowa municipalities.

'I'm not seeing any decrease,” she said. 'There's a need to provide these examinations that we do for the cities, and there's a need to have an investigative unit in the State Auditor's Office because if people want to perpetrate a fraud, they can.”

She said her office conducts routine audits at least once every eight years, and has surprised some cities by sending auditors back to follow up on recommendations or check financial records.

'The periodic examination works, but we want to make sure that we're not only showing up for the initial audit, but we'll be following up,” said Mosiman, who made a status-quo request for $11.5 million in fiscal 2018.

A 2014 law requires towns with fewer than 2,000 residents and a budget of more than $1 million for two fiscal years in a row to undergo audits on a more regular basis.

HUMAN SERVICE COST SAVINGS: Chuck Palmer, director of the state Department of Human Services, said Tuesday his agency now projects the state's savings from switching its Medicaid system to privately managed care will be $118.7 million for the current fiscal year. Palmer told Gov. Terry Branstad the savings are one way his agency is helping to meet the governor's goal of reducing the size and cost of state government.

'We're on track to be a little better than estimated,” Branstad said.

According to DHS calculations, the state would have spent over $1.72 billion in fiscal 2016 had it not switched to Medicaid managed care versus the nearly $1.69 billion in state medical assistance expenditures. For fiscal 2017, the projections were $1.66 billion with managed care and nearly $1.78 billion without, prompting Palmer to declare: 'We believe that we've been able to bend the Medicaid curve.”

Overall, Palmer submitted a fiscal 2018 state budget request for $1.814 billion, which DHS officials projected to be about 2.6 percent, or $45.5 million, above current state appropriations used to serve more than 1 million needy and vulnerable Iowans.