Audit faults DHS over grants, ventilators distributed during COVID

MADISON – During their work to combat the coronavirus pandemic in Wisconsin, state health officials awarded hundreds of thousands of dollars to long-term health care and emergency medical services providers without receiving sufficient documentation to justify the payments and have not properly tracked some of the ventilators the state purchased for COVID-19 patients, state auditors have found.

Department of Health Services Secretary Kirsten Johnson defended the agency in a response to the Legislative Audit Bureau's findings, noting the decisions by state officials surrounding ventilators were made at a time of an unprecedented emergency.

"DHS was required to make quick decisions to provide funds to the long-term care, emergency medical services, and hospital providers, who needed them to continue to provide care during this critical emergency," Johnson wrote in her response to state auditors. "We operated in a collaborative, dynamic manner which allowed us to administer the supplemental funds fairly and effectively."

Johnson said the state's ventilator program was established during the emergency response "and this background impact played a significant role for the decisions made regarding the number of ventilators purchased as well as staff turnover making file location difficult."

"Auditing a program established in these conditions, but assuming optimal conditions, fails to account for the dynamic nature of the emergency that DHS staff along with other state partners navigated," she wrote.

According to an audit released Wednesday of how federal pandemic funds were used by state officials, the DHS awarded $159.6 million in grants to health care and emergency medical providers between March 2020 and June 2022. In reviewing documentation for 31 grants totaling $3.2 million, auditors questioned $518,700 that was paid to 10 grant recipients that did not submit sufficient documentation to support their grant applications or the grant amounts they requested.

Johnson, who was appointed DHS secretary earlier this year, disputed auditors' account of the agency's process to verify providers' needs for funding. She said agency officials "had significant back-and-forth communication with providers to ensure we were comfortable with the level of documentation to support funding requests."

DHS also spent $38.7 million to purchase and maintain 1,542 ventilators in the same time frame for a program that lent the machines to hospitals and other medical care providers.

Auditors found DHS did not execute loan agreements with all recipients of ventilators and did not inventory its ventilator-related equipment, according to a letter to the Legislature's audit committee's co-chairmen from State Auditor Joe Chrisman. DHS also did not regularly track whether the ventilators had been maintained by the firm with which it contracted, according to Chrisman, and did not develop a plan for the future use of the ventilators.

Six ventilators were missing as of January 2023, according to the audit.

When the coronavirus pandemic hit Wisconsin, DHS was the state agency coordinating federal assistance and responsible for overseeing the state's response.

In the first weeks of the health emergency, Democratic Gov. Tony Evers initially sought to purchase thousands of ventilators to equip hospitals in the event of an influx of patients needing respiratory assistance. Republican lawmakers pushed back against Evers, questioning whether the governor had the power to make the purchases.

Molly Beck can be reached at [email protected].