LOUISVILLE, Ky. (WDRB) — Some Kentucky nursing homes weren't inspected for years, and Kentuckians who had already died were still listed as eligible for Medicaid, according to a new state audit.
Kentucky Auditor Allison Ball released the second part of the state's annual audit for the 2025 fiscal year Monday.
"This audit, once again, represents serious problems the Commonwealth must address to ensure it is protected from waste, fraud and abuse," Ball said in a news release. "But the hard work of our auditors is paying off, as Kentucky is finally making strides toward completing overdue inspections of nursing homes after our office first brought this issue to light two years ago. This shows that all of the problems uncovered in our report can be fixed by following our recommendations."
The audit found the Cabinet for Health and Family Services failed to complete required health and safety inspections of nursing homes within mandated time frames. Of 190 inspections conducted, 162 were late — some by as much as 51 months, far exceeding the federal requirement of no more than 15 months between surveys.
State officials said, as of March 2026, all of Kentucky's 268 facilities received compliance surveys within the proper deadline. The state said 268 facilities in Kentucky are required to receive this federally mandated inspection every nine to 15 months.
The Auditor's Office said the inspections were completed after the issue was raised over the past two years and CHFS hired contractors to address the backlog.
According to the audit, CHFS also failed to identify inaccurate information used to determine Medicaid eligibility. The audit found 358 people died before Jan. 1, 2024, but were still listed as eligible for Medicaid during the 2025 fiscal year.
"This failure jeopardizes the health and safety of Kentuckians in those facilities," Ball said in a news release. "After being a repeat finding for over three years now in SSWAK II, CHFS has finally taken steps to rectify the backlog of long-term care facility inspections it had allowed to linger."
The audit said that means CHFS wasn't in compliance with federal law. The state said a change to its eligibility and enrollment system will be implemented in October 2026, along with a program to prevent duplicate Social Security numbers.
In addition, 22 Kentuckians received temporary Medicaid coverage more than once during the year, which isn't allowed under the state plan. The state said it will add internal controls to prevent this from happening.
The audit states CFHS wasted Medicaid dollars by making 844 duplicate payments for Kentucky residents.
"CHFS has once again failed to ensure that multiple people cannot use the same social security number to obtain Kentucky Medicaid benefits," Ball said in a news release.
According to the audit, CHFS incorrectly reported $3,327,599 in federal expenditures as state and local share expenditures.
"CFHS failed to comply with earmarking and level-of-effort tracking requirements to keep the public and federal government aware of its spending of MaryLee Allen Promoting Safe and Stable Families Program funds and efforts to promote the goals of that program," Ball said in a news release.
The audit said Kentucky's Department for Local Government and Department of Workforce Development failed to submit federally required transparency reports about how federal dollars were distributed.Â
The Kentucky Transportation Cabinet (KYTC) failed to monitor the payroll submissions of construction contractors and other contractors to ensure they were doing the required work and being paid federally required wages, according to the audit.Â
A spokesperson for Gov. Andy Beshear's Office released the following statement regarding the audit:
"Volume two is just the latest installment of the auditor continuing to play political games while Gov. Beshear continues to stay focused on moving us forward, together. Just last week, the governor announced that Kentucky has celebrated the best first quarter in our history for economic investment, building on the three best years for economic development and the best year for new wages for our families. The governor has also secured the commonwealth’s three highest budget surpluses and garnered upgrades from all three major bond rating agencies, while also cutting income and property taxes. His management of the state is delivering positive results so Kentuckians can live better lives.
"There is no chance the state will lose federal Medicaid funding, despite the auditor’s dangerous and baseless claims. The Beshear administration worked hard to access this necessary data, and after months of waiting, the Centers for Medicare and Medicaid Services (CMS) finally provided states with the information requested to determine Medicaid eligibility for individuals who may be enrolled in more than one state program at one time. As the federal government has acknowledged in the past, no state has access to the data necessary to identify when beneficiaries are concurrently enrolled in a Medicaid Managed Care program in another state.
"CMS’ data identified 21,330 individuals who needed further verification. From that, we were able to account for all but 7,026 records. From that number, we requested more information from the individuals and have already verified residency for 872 people and disenrolled 5,199 individuals. Simply because an individual is disenrolled, it doesn’t necessarily mean they were not properly enrolled in Kentucky Medicaid in the past."
The second full report can be viewed below:
Part 1 of audit
In the first report released last week, Ball detailed the mismanagement of funds across the state's executive branch.
The 120-page annual audit for Fiscal Year 2025 cites more than $1 billion in financial reporting errors, including a failure to report an additional $170 million more in state Medicaid expenditures.
The audit flagged $33 million in overcharged taxes, finding 4,000 taxpayers were charged twice. The state said it refunded $33.7 million for the error.
The audit also found the Cabinet for Health and Family Services didn't secure people's social security numbers and personal information.
For many of the problems, the administration said it has acknowledged, corrected and listed changes to prevent further mistakes. But one area in particular is still a fight: computer logins in the Kentucky Transportation Cabinet.
Illegal driver's licenses being issued to immigrants, highlighted in a WDRB report last year, is also mentioned in the report. Ball said oversight failures in KYTC, "in part, led to the circumstances which resulted in the federal indictment of Transportation Cabinet temporary workers."
The report also found major gaps in protecting Kentuckians' personal information from potential fraud. Ball's report found the state's Department of Revenue "failed to address security concerns" raised by the Commonwealth Office of Technology after a routine hacking test "showed the systems were vulnerable." The test found that the state's tax information system could have been hacked within minutes.
Ball said these findings reveal widespread carelessness and risk.
The first full report can be viewed below:
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