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Arkansas Health Department Audit Identifies $350,000 in Mismanaged Expenses in AIDS Division, Preliminary Findings Show

December 20, 2004

Auditors from the Arkansas Department of Health have identified almost $350,000 in "questionable, inappropriate or insufficiently documented" expenses, according to initial findings from an audit of the department's AIDS division, the Arkansas Democrat-Gazette reports (Smith, Arkansas Democrat-Gazette, 12/17). The health department earlier this year began investigating its AIDS division to determine whether some of the $8.2 million it receives in federal funding for medications and other services was mismanaged by division employees. The investigation -- prompted by questions from the Democrat-Gazette about a travel account audit that showed four employees were inappropriately paid more than $17,000 without full receipt documentation -- already has caused the group to make staff changes and tighten policy. The health department in October terminated the contract of one organization that received federal funding because the group could not account for $53,592 of its program expenses. In addition, a Democrat-Gazette review of the division's spending found that a health department employee who coordinated the disbursement of most of the division's grant money provided funding to two organizations that employed her husband. Arkansas law forbids state employees from using their positions "to secure special privileges" for their spouses. The department also is investigating an increase in funding going to organizations that could not document their work. Health officials blame a gap in the department's grant monitoring for failing to notice problems (Kaiser Daily HIV/AIDS Report, 10/8).

Some of the preliminary findings from the audit include:

  • $39,225.45 "inappropriately" paid through two travel accounts to four health department employees;

  • $164,421.50 of expenses paid to the Arkansas HIV/AIDS Policy Task Force that lacked documentation, including more than $59,000 in reimbursements to the group for expenses before or after the grant period;

  • $30,792.91 of expenses paid to Future Builders that lacked documentation; and

  • $29,746.79 in expenses for "inappropriate" disbursements and a Christmas bonus check paid to the Fort Smith Fights AIDS group.

Auditors are giving the organizations an opportunity to provide proper receipts or other documents to "justify" expenses billed to the health department, according to the Democrat-Gazette. Without sufficient documentation, the audit recommends asking the organizations and employees involved to repay the money. Once the auditors' recommendations are finalized, health department leadership will "determine further action," the Democrat-Gazette reports. The department's grant-monitoring process "failed" to detect finance mismanagement problems in some areas, according to officials, according to the Democrat-Gazette. "One would have to assume that somewhere along the line that process broke down," Jerry Jones, the agency's infectious disease unit leader, said (Arkansas Democrat-Gazette, 12/17).

Back to other news for December 20, 2004

Reprinted with permission from You can view the entire Kaiser Daily HIV/AIDS Report, search the archives, or sign up for email delivery at The Kaiser Daily HIV/AIDS Report is published for, a free service of the Kaiser Family Foundation, by The Advisory Board Company. © 2004 by The Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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This article was provided by Henry J. Kaiser Family Foundation. It is a part of the publication Kaiser Daily HIV/AIDS Report. Visit the Kaiser Family Foundation's website to find out more about their activities, publications and services.
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