Appendix F - Management Report on Final Action
October 1, 2003 - September 30, 2004
Background
The Inspector General Act Amendments of 1988 (P.L. 100-504) require Departments and agencies to report to Congress on the actions they have taken and the amount of funds recovered or saved in response to the Office of Inspector General's (OIG) audit recommendations. This annual management report provides the status of OIG reports in the Department and summarizes the results of actions taken to implement OIG audit recommendations during the reporting period.
Departmental Findings
For the fiscal year covered by this report, the Department accomplished the following:
- Initiated action to recover $755 million through collection, offset, or other means (see Table I);
- Completed action to recover $518 million through collection, offset, or other means (see
Table I);
- Initiated action to put to better use $1 billion (see Table II); and
- Completed action that over time will put to better use $1 billion (see Table II).
At the end of this period there are 287 reports over 1 year old with uncollected balances or unimplemented monetary findings. The reasons these reports are still pending are found in the notes to the tables.
|
The
HHS Process
|
|
Four Key Elements
to the HHS Audit Resolution and Follow-up
Process
|
-
The HHS Agencies have a lead responsibility
for implementation and follow-up on most OIG and
independent auditor recommendations;
-
The Assistant Secretary for Budget,
Technology, and Finance establishes policy and monitors
HHS Agencies’ compliance with audit follow-up
requirements;
-
The audit resolution process includes the
ability to appeal disallowances administratively under
such programs as Head Start, Foster Care and Medicaid
pursuant to the Board’s regulations in 45 C.F.R.
Part 16; and
-
If necessary, the Assistant Secretary for
Budget, Technology, and Finance or the Deputy Secretary
resolves conflicts between the HHS Agencies and the
OIG.
|
Departmental Conflict Resolution
In the event that the HHS agencies and OIG staff cannot resolve differences on specific report recommendations, a conflict resolution mechanism is available. During FY 2004, there were no disagreements requiring the convening of the Conflict Resolution Council.
Status of Audits in the Department
In general, HHS Agencies follow up on OIG recommendations effectively and within regulatory time limits. The HHS Agencies usually reach a management decision within the 6-month period that is prescribed by P.L. 100-504 and OMB Circular A-50, Audit Followup. For the most part, they also complete their final actions on OIG reports, including collecting disallowed costs and carrying out corrective action plans, within a reasonable amount of time. However, the Department continues to monitor this area to improve procedures and ensure compliance with corrective action plans.
Report on Final Action Tables
The following tables summarize the Department's actions in collecting disallowed costs and implementing recommendations to put funds to better use. Disallowed costs are those costs that are challenged because of a violation of law, regulation, grant term or condition, etc. Funds to be put to better use relate to those costs associated with cost avoidances, budget savings, etc. The tables are set up according to the requirements of Section 106(b) of P.L. 100-504.
|
TABLE
I
Management Action on Costs Disallowed in OIG
Reports
As of
September 30, 2004
(in thousands)
|
|
|
Number
|
Disallowed
Costs
|
|
A. Reports for which final action had not been
taken by the commencement of the reporting period.
See Note 1.
|
435
|
$838,943
|
|
B. Reports on which management decisions were
made during the reporting period. See Note 2.
|
322
|
$754,809
|
|
Subtotal
(A+B)
|
757
|
$1,593,752
|
|
C. Reports for which final action was taken
during the reporting period:
-
The dollar value of disallowed costs that
were recovered through collection, offset, property in
lieu of cash, or otherwise.
-
The dollar value of disallowed costs that
were written off by management.
|
370
2
|
$518,345
$175
|
|
Subtotal
(i+ii)
|
372
|
$518,520
|
|
D. Reports for which no final action has been
taken by the end of the reporting period. See Note
3.
|
385
|
$1,075,232
|
|
Notes:
-
Includes adjustments of amended
disallowance and disallowance excluded from the previous
reporting period.
-
Represents the amount of management concurrence with the OIG’s
recommendations. For this fiscal year, the
OIG’s reconciliation with the HHS Agencies showed a
variance that represents the two organizations having
different cut-off dates.
-
Includes the list of audits over 1 year old with outstanding balances to be
collected. Includes audits under administrative or
judicial appeal, under current collection schedule, and
legislatively uncollectible.
|
|
TABLE II Management Action on OIG Reports
with Recommendations That Funds Be Put
to Better Use
As of September 30,
2004
(in thousands)
|
|
|
Number
|
Disallowed
Costs
|
|
A. Reports for which final action had not been
taken by the commencement of the reporting period.
See Note 1.
|
12
|
$56,420,817
|
|
B. Reports on which management decisions were
made during the reporting period.
|
12
|
$1,331,208
|
|
Subtotal
(A+B)
|
24
|
$57,752,025
|
|
C. Reports for which final action was taken
during the reporting period:
-
The dollar value of recommendations that
were actually completed based on management action or
legislative action.
-
The dollar value of recommendations
that management has subsequently concluded should not or
could not be implemented or completed.
|
11
0
|
$1,321,165
$0
|
|
Subtotal
(i+ii)
|
11
|
$1,321,165
|
|
D. Reports for which no final action has been
taken by the end of the reporting period. See Note
2.
|
13
|
$56,430,860
|
|
Notes:
-
Includes adjustments of amended
disallowances and disallowances excluded from the previous
reporting period.
-
Includes the nine reports shown on the
following page with recommendations to put funds to better
use that were pending for more than 1 year. These
reports involve major policy questions as well as
legislative remedies that are difficult and time consuming
to resolve.
|
|
Reports Containing Recommendations to
Put Funds
to Better Use Pending More Than 1
Year
As of September 30, 2004
|
|
Audit
Number
|
Auditee
|
Date
Issued
|
Amount
|
Explanations
|
|
OEI-12-92-00460
|
Inappropriate
Payments for Total Parenteral Nutrition (TPN)
(ES#921222-1330)
|
Jun-93
|
$69,000,000
|
CMS currently is
determining the actual amount of the savings.
|
|
A-06-92-00043
|
BC/BS of Texas, Inc.
-- GME Costs
|
Mar-94
|
$4,078,960
|
Corrective action
cannot be implemented pending the resolution of an
objection lodged by the providers' legal counsel with
the OIG and the Office of General Counsel.
|
|
A-04-95-02110
|
SC BC (Hospice of
Lake & Sumter, Inc.) – ORT
|
Nov-96
|
$2,500,000
|
CMS is reassessing
whether seeking the identified OIG hospice overpayment is
the appropriate action to take.
|
|
A-06-95-00095
|
Palmetto Gov. Ben.
Admin. (Fam. Hospice/Dallas)-ORT
|
Jan-97
|
$69,648
|
CMS is reassessing
whether seeking the identified OIG hospice overpayment is
the appropriate action to take.
|
|
A-05-95-00060
|
WI Department of
Health and Social Services
|
Feb-97
|
$2,400,000
|
The State of
Wisconsin plans to establish a work group to meet and
review HMO financial data related to Medicaid HMOs to
determine the actual amount of the savings.
|
|
OEI-03-99-00200
|
Medicare Payouts for
Services After Death
|
Mar-97
|
$4,800,000
|
CMS is in the
process of determining the amount of savings.
|
|
A-06-01-00053
|
Medicaid
Pharmacy
|
May-02
|
$470,000,000
|
Actual acquisition
costs of generic prescription drug products.
|
|
A-09-01-00109
|
Medicare Part B Fee
Schedule Amounts
|
Dec-02
|
$171,500,000
|
CMS is in the
process of determining the amount of savings.
|
|
A-03-00-00216
|
Medicaid Enhanced
Payments
|
Nov-01
|
$55,497,000,000
|
Review to local
public providers and the use of intergovernmental
transfers.
|
|
Total
9 Reports from CMS
|
$56,221,348,608
|
|
|
HHS
Audit Reports Over 1 Year Old With Outstanding Balances To
Be Collected
As
of September 30, 2004
|
|
HHS
Agency
|
Audit Report #
|
Auditee
|
Issue Date
|
Amount
|
Note
|
|
ACF
|
02-00-64555
|
Utica-HS
|
Oct-01
|
$166,880
|
6
|
|
ACF
|
02-02-69503
|
Puerto
Rico
|
Feb-03
|
$507,667
|
25
|
|
ACF
|
02-02-71356
|
2nd St
Youth Ctr.
|
Feb-03
|
$15,034
|
1
|
|
ACF
|
02-91-14405
|
Bedford Stuyvesanto/O
|
Mar-02
|
$34,593
|
3
|
|
ACF
|
02-97-47637
|
Puerto
Rico IV-B
|
Sep-97
|
$9,703
|
25
|
|
ACF
|
02-99-02005
|
Puerto
Rico
|
Oct-02
|
$1,214,299
|
4
|
|
ACF
|
02-99-58335
|
Puerto
Rico
|
Mar-99
|
$5,400
|
25
|
|
ACF
|
03-01-00510
|
Council Southern MT
|
Nov-01
|
$11,635
|
6
|
|
ACF
|
03-02-00550
|
Central Piedmont Act
|
Jun-03
|
$41,106
|
6
|
|
ACF
|
03-02-72227
|
State
of VA
|
Jan-01
|
$1,100,000
|
1
|
|
ACF
|
03-03-73256
|
Lawrence Cty HS, Inc
|
Jun-03
|
$148,663
|
6
|
|
ACF
|
03-03-73829
|
Preschool Dev Prog
|
Jul-03
|
$961,497
|
1
|
|
ACF
|
03-03-74041
|
Child
Advocates of Blair
|
Jun-03
|
$110,563
|
25
|
|
ACF
|
03-03-74937
|
Preschool Dev Prog
|
Sep-03
|
$448,772
|
6
|
|
ACF
|
03-97-43787
|
VA/CCDBG
|
Jun-97
|
$937,769
|
25
|
|
ACF
|
03-97-47731
|
State
of DE
|
Sep-97
|
$11,880
|
25
|
|
ACF
|
03-99-03305
|
Research Assessment State of MD
|
Jul-00
|
$4,453,336
|
6
|
|
ACF
|
04-00-60897
|
State
of FL
|
Nov-00
|
$33,397
|
25
|
|
ACF
|
04-00-64861
|
State
of NC
|
Mar-01
|
$357,591
|
6
|
|
ACF
|
04-00-66032
|
State
of FL
|
Jan-01
|
$41,989
|
25
|
|
ACF
|
04-01-68839
|
State
of FL
|
Apr-02
|
$155,973
|
25
|
|
ACF
|
04-01-68839
|
State
of FL
|
Apr-02
|
$7,519
|
25
|
|
ACF
|
04-91-06594
|
Mountain Valley/HS
|
Sep-92
|
$196,213
|
2
|
|
ACF
|
04-92-17186
|
Mountain Valley/HS
|
Sep-92
|
$203,420
|
2
|
|
ACF
|
04-94-30737
|
Mountain Valley/HS
|
Jul-94
|
$39,095
|
2
|
|
ACF
|
04-96-00105
|
Delta
Foundation
|
Apr-99
|
$1,225,291
|
4
|
|
ACF
|
04-96-00107
|
Harambee Child Level
|
Aug-99
|
$124,811
|
6
|
|
ACF
|
04-97-47475
|
Wash
Cty Opport Inc.
|
Nov-97
|
$173,151
|
4
|
|
ACF
|
04-99-56945
|
Quitman Cty Dev Org Inc
|
Jun-02
|
$6,375
|
6
|
|
ACF
|
04-99-59501
|
Chapel
Hill Carrboro
|
Jan-02
|
$11,256
|
6
|
|
ACF
|
05-01-67360
|
MI
Family Independence Agency
|
Jul-01
|
$150,000
|
25
|
|
ACF
|
05-02-70977
|
Nottawaseppi
|
Nov-02
|
$671
|
6
|
|
ACF
|
05-03-73080
|
Genesee Cty Comm Action
|
May-03
|
$14,511
|
25
|
|
ACF
|
05-03-73766
|
Family
Dev Service
|
Sep-03
|
$20,679
|
25
|
|
ACF
|
05-97-48402
|
Montgomery Co CAA
|
Nov-97
|
$79,374
|
2
|
|
ACF
|
05-98-00010
|
State
WI
|
Feb-00
|
$3,318,857
|
25
|
|
ACF
|
06-00-62531
|
NA
Five Sandoval Indian Pueblos Inc.
|
Oct-00
|
$13,958
|
4
|
|
ACF
|
06-02-70441
|
Five
Sandoval Indian Tribe
|
Apr-03
|
$67,998
|
6
|
|
ACF
|
06-02-72487
|
Kaw
National of OK
|
May-03
|
$647
|
6
|
|
ACF
|
06-03-73575
|
Hidalgo Cty TX
|
Jul-03
|
$543,541
|
6
|
|
ACF
|
06-90-00052
|
Mexican Amer/Discret
|
Apr-92
|
$74,646
|
3
|
|
ACF
|
06-97-47657
|
Five
Sandoval
|
Nov-99
|
$46,660
|
6
|
|
ACF
|
06-97-47730
|
Tri-County Head Start
|
Dec-97
|
$2,451
|
6
|
|
ACF
|
06-97-48284
|
E
Texas Family Srv
|
Nov-98
|
$9,130
|
6
|
|
ACF
|
06-97-48531
|
TX
DHS
|
Jan-99
|
$11,209
|
25
|
|
ACF
|
07-02-00138
|
State
of NE
|
Sep-03
|
$11,681,442
|
1
|
|
ACF
|
07-02-72037
|
State
of KS
|
Oct-01
|
$57,236
|
1
|
|
ACF
|
07-98-50741
|
Citizens Housing
|
Dec-99
|
$2,678
|
6
|
|
ACF
|
08-97-43975
|
Oglala
Sioux Tribe
|
May-99
|
$6,494
|
6
|
|
ACF
|
08-99-57703
|
Connejos-Costil
|
Oct-99
|
$21,145
|
6
|
|
ACF
|
08-99-59825
|
Crow
Creek Sioux Tribe
|
Jan-00
|
$26,660
|
6
|
|
ACF
|
08-99-59907
|
Crow
Creek Sioux Tribe
|
Aug-00
|
$344,504
|
6
|
|
ACF
|
09-00-63951
|
Tohono
O Odham Nation
|
May-01
|
$164,947
|
4
|
|
ACF
|
09-90-56270
|
Rinco
San Luiseno Band
|
Apr-01
|
$49,460
|
6
|
|
ACF
|
09-93-00106
|
CA
Dept. of Social Svcs.
|
May-97
|
$29,269
|
25
|
|
ACF
|
09-93-23668
|
Center
of ED/HS
|
Nov-93
|
$12,070
|
25
|
|
ACF
|
09-95-00091
|
Walter
McDonald Asso.
|
Jul-99
|
$23,553
|
4
|
|
ACF
|
09-96-40113
|
Protective & Adv Mariana
|
Apr-98
|
$80,574
|
6
|
|
ACF
|
09-96-40114
|
Protective & Adv Mariana
|
Apr-98
|
$36,988
|
6
|
|
ACF
|
09-96-40115
|
Protective & Adv Mariana
|
Apr-98
|
$56,344
|
6
|
|
ACF
|
10-00-58628
|
Kuigpagmiut, In.
|
Apr-00
|
$18,119
|
6
|
|
ACF
|
10-01-66783
|
Native
Village of Mekoryuk
|
Apr-01
|
$15,883
|
4
|
|
ACF
|
10-03-72484
|
Maniilaq Manpower, Incak
|
Jul-03
|
$44,498
|
6
|
|
ACF
|
10-98-00008
|
Siletz
River Co.
|
Apr-00
|
$27,316
|
6
|
|
|
|
Total for ACF
|
|
$29,808,390
|
|
|
CDC
|
01-00-62266
|
State
of ME
|
Feb-00
|
$138,782
|
5
|
|
CDC
|
01-00-66460
|
State
of ME
|
Jan-03
|
$363,364
|
5
|
|
CDC
|
01-02-70271
|
State
of ME
|
Apr-03
|
$561,697
|
5
|
|
CDC
|
01-02-71527
|
State
of MA
|
Apr-02
|
$29,260
|
5
|
|
CDC
|
01-02-73084
|
State
of ME
|
Sep-02
|
$188,524
|
5
|
|
CDC
|
01-96-37165
|
Haitian American Public Health
Initiative
|
Mar-97
|
$20,209
|
5
|
|
CDC
|
03-01-66421
|
American Assoc. of Community
Colleges
|
Nov-00
|
$7,474
|
5
|
|
CDC
|
03-02-72715
|
DC
Dept. of Health
|
Jul-03
|
$7,851
|
5
|
|
CDC
|
03-03-72847
|
DC
Dept. of Health
|
Oct-02
|
$12,850
|
5
|
|
CDC
|
03-98-50835
|
Nat'l Organ. of Black County
Officials
|
Jan-99
|
$19,385
|
5
|
|
CDC
|
03-98-50836
|
Nat'l Organ. of Black County
Officials
|
Jan-99
|
$27,140
|
5
|
|
CDC
|
03-98-50837
|
Nat'l Organ. of Black County
Officials
|
Mar-99
|
$1,078
|
5
|
|
CDC
|
03-98-51634
|
City
of Philadelphia, PA.
|
Jun-98
|
$93,690
|
5
|
|
CDC
|
03-99-56842
|
Nat'l Assoc. for Equal Opport. in
Higher Ed.
|
Feb-01
|
$33,585
|
5
|
|
CDC
|
04-00-61897
|
American Cancer Society
|
Mar-01
|
$28,654
|
5
|
|
CDC
|
04-00-65030
|
State
of SC
|
Jul-00
|
$688,633
|
1
|
|
CDC
|
04-02-72213
|
State
of FL
|
Jun-02
|
$28,612
|
5
|
|
CDC
|
04-98-51239
|
State
of AL Child Care & Dev. Fund Mand.
|
Sep-98
|
$227,200
|
5
|
|
CDC
|
05-03-73921
|
DC
Dept. of Health
|
Nov-02
|
$13,317
|
5
|
|
CDC
|
06-01-68128
|
City
of Houston, TX
|
Feb-01
|
$56,340
|
5
|
|
CDC
|
06-02-70732
|
US-Mexico Border Health
Association
|
Jan-02
|
$23,483
|
5
|
|
CDC
|
06-98-54189
|
City
of Houston, TX
|
Jul-98
|
$12,096
|
5
|
|
CDC
|
09-96-41444
|
Immigrant Center
|
Mar-97
|
$2,495
|
5
|
|
CDC
|
10-98-53018
|
Self
Enhancement, Inc.
|
May-00
|
$3,452
|
5
|
|
CDC
|
10-98-53162
|
People
of Color Against AIDS Network
|
Sep-00
|
$8,289
|
5
|
|
|
|
Total for CDC
|
|
$2,597,460
|
|
|
CMS
|
01-01-00502
|
Ambulance & Radiology Serv
|
Oct-02
|
$51,000,000
|
5
|
|
CMS
|
01-01-00542
|
Associated Hospital Serv
|
Dec-02
|
$518,981
|
5
|
|
CMS
|
01-89-00518
|
Blue Shield of
MA
|
Oct-90
|
$216,053
|
11
|
|
CMS
|
01-90-00500
|
Blue Cross of
MA
|
Sep-90
|
$7,048,076
|
4
|
|
CMS
|
01-91-00508
|
Aetna Life-Parts
A&B Adm.
|
Jan-92
|
$223,655
|
12
|
|
CMS
|
01-92-00517
|
Blue Cross of
M.
|
Apr-93
|
$160,122
|
5
|
|
CMS
|
01-92-00523
|
BC/BS of MA -Part B
Lab Tests
|
Jan-94
|
$2,250,000
|
26
|
|
CMS
|
01-93-00512
|
BC/BS of MA-Lab
Test
|
Jul-94
|
$426,817
|
26
|
|
CMS
|
01-94-00510
|
BC/BS of MS - ADM
costs
|
Apr-95
|
$130,299
|
5
|
|
CMS
|
01-95-00503
|
G/A & Capitol
McLean Ho- Adm Costs
|
Aug-95
|
$186,190
|
5
|
|
CMS
|
01-96-00513
|
Separately Billable
ESRDL Lab Tests
|
Dec-96
|
$6,300,000
|
5
|
|
CMS
|
01-96-00519
|
Nat'l Medical
Care ESRD
|
Sep-97
|
$4,319,361
|
7
|
|
CMS
|
01-96-00527
|
Clinical Lab Tests-
Hosp. Outpatient Labs
|
Dec-00
|
$43,632,767
|
5
|
|
CMS
|
01-98-00512
|
CT BC/BS
Noncompliance
|
Jun-98
|
$3,264
|
5
|
|
CMS
|
01-99-00501
| |
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