Delaware’s 2025 Single Audit identified recurring problems across multiple state agencies, including weaknesses in financial reporting, payroll oversight, proper documentation, and federal reporting. While the report does not conclude that fraud occurred, it does show how missing records, late reviews, unsupported reports, and inconsistent internal controls can make it harder for the state to prove that taxpayer and federal dollars were managed properly.
One of the most significant findings involved Delaware’s Unemployment Insurance Trust Fund. Auditors reported that longstanding accounting deficiencies remained unresolved, and, as a result, they could not determine whether additional audit adjustments were still needed. That determination came even after the Division of Unemployment Insurance completed reconciliation efforts that resulted in a $9.7 million prior-period adjustment, suggesting that the agency’s financial reporting problems were not yet fully corrected.
In fact, the Division of Unemployment Insurance appeared throughout the audit. Auditors found:
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Missed deadlines for required Benefit Accuracy Measurement investigations
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Delays in closing unemployment claim reviews
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Unsupported federal reports
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Missing evidence that reports were reviewed and approved
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Delayed audit documentation
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Inadequate payroll oversight
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Claimant eligibility documentation problems
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Reporting discrepancies
In one case, a manual data-entry error led to an employer being assigned a 2.8 percent unemployment tax rate instead of the correct 1.2 percent rate because the incorrect liability year was entered.
Federal transparency and reporting requirements were another recurring issue. Auditors found that the Department of Education failed to report more than $2.7 million in required information for federal grant funding passed through to other organizations, while the Division of Substance Abuse and Mental Health submitted some grant reporting late, including one $79,392 subaward that was not reported at all and four others totaling more than $4.2 million that were reported between one and 118 days late. When agencies fail to report federal awards accurately and on time, it becomes more difficult for public and federal oversight bodies to track where grant money is going and whether it is being administered as required.
Payroll documentation problems also surfaced repeatedly. Auditors found missing or late supervisory approvals for employee timesheets in the Divisions of Public Health, Unemployment Insurance, Social Services, and Substance Abuse and Mental Health. In the Division of Public Health, one payroll allocation error caused $1,742 in salary costs to be charged incorrectly to a federal program. These findings do not necessarily suggest intentional misuse of funds, but they indicate that basic payroll controls were not consistently functioning as intended.
Auditors also uncovered several cases where agencies could not fully prove who qualified for benefits or which providers met program requirements. These findings included missing claimant records, incomplete participant eligibility files, missing childcare provider documentation, missing Medicaid provider health and safety records, and missing evidence that Children’s Health Insurance Program expenditures occurred during the allowable grant period.
Some conclusions focused less on direct financial losses and more on transparency and documentation failures. In one example, auditors cited unsupported financial reports, incomplete capital project justifications, incorrect square footage reporting for projects, failure to publicly post managed care audit results, and missing procurement documentation for a $22 million North Wilmington Library management and construction contract.
Delaware’s 2025 audit points to a broader pattern of weak documentation, delayed reviews, and inconsistent oversight. The report shows how staffing shortages, outdated systems, and weak internal controls can make it more difficult for agencies to demonstrate compliance with federal requirements and maintain public confidence in the stewardship of taxpayer-funded programs.