“Due to the significance of the dollars and risks involved, the agency needs to take immediate action to remedy the situation,” the report said, noting that the situation increased the chances of loss or theft of funds and cost the state interest earnings.

Nebraska law requires that checks be deposited in the state treasury within three business days of receipt if they are for $500 or more.

Checks under $500 must be deposited within seven days.

HHS officials agreed with the audit findings, according to an agency response included with the report.

But the officials said that it is difficult to get checks deposited within the time frame set out by state law because of the cumbersome process used to reconcile the checks against state records.

If the checks do not match, it takes time to research and identify corrections, the officials said.

HHS staff told the auditors that the backlog built up after one accountant retired in April and a second one went on medical leave in June.

That left the department without any accountants familiar with the drug rebate program and how to process the checks.