Department of Public Health And Human Services Financial-Compliance Audit for the Two Fiscal Years Ended June 30 .. 36586

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With the different Medicaid components and multiple federal fiscal periods there could be as many as 1,350 different cost centers in the accounting system. Each center's coding has an imbedded FMAP rate.
We tested 38 of these cost centers and found 18 in which expenditures were allocated at the wrong FMAP rate. The centers were established in the accounting system July 1, 1998, using the federal fiscal year 1999 FMAP rate which was not effective until October 1, 1998. This resulted in expenditu
...res for July, August, and September 1998 being allocated at the 1999 FMAP rate rather than the 1998 FMAP rate. The 1999 rate was slightly higher than the 1998 rate (71.73% vs. 70.56%) and, therefore, the federal share of program costs is overstated by S289,889. We question $289,889 of Medicaid costs processed during July, August, and September 1998.
Department personnel stated these cost centers were initially established in the accounting system with the incorrect FMAP rates.
They stated the rates were subsequently corrected in the accounting system; however, the department did not correct the expenditures already allocated at the incorrect rates.


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