In conflict with state policy, some businesses hired the 23 caregivers even though they had past legal problems involving assault, theft, drug charges, abuse and financial exploitation, according to the audit. Officials said it wasn't clear whether the caregivers had unsupervised access to the clients -something that would violate state law - but assumed it happened in some cases within the supported living program.
Auditors said the state does not have the staff to review the results of all background checks.
"We recommend strengthened monitoring processes to prevent caregivers who fail background checks from working with vulnerable populations," said State Auditor Troy Kelley in a statement.
State officials said in response to the findings that 100 percent compliance "is the only acceptable result for this process." Officials said they are working to conduct background check training for service providers, reviewing background check compliance and updating policies.
The supported living program, within the Developmental Disabilities Administration, provides services to about 3,700 developmentally disabled people in the state at a cost of about $280 million in federal and state money under Medicaid. The state contracts with businesses, which hire caregivers to aid people in maintaining their homes, preparing meals and other basic needs.
Along with the issue of background checks, auditors also raised questions about $17 million in program payments - about 6 percent of all spending. The audit identified $500,000 in overpayments and $5.5 million in payments that weren't properly authorized. Officials said those problems were linked to a paper-based process that is being replaced by an electronic system.
The audit also identified more than $11 million in questionable payments in which businesses did not have proper documentation, such as time sheets and schedules, to support the payments they received.
The state said in response that it is working with a consulting firm to evaluate the payment process and examine strategies to improve efficiencies and compliance.