Federal Reports

Financial Statement

Of the $27.6 billion in Federal Medicaid funds that the California Department of Health Care Services (State agency) obtained for fiscal year (FY) 2010, $20.3 million was not supported by net expenditures. Specifically, the State agency (1) refunded less to its FY 2010 Payment Management System (PMS) accounts for certain adjustments to reduce its expenditures than it reported for those adjustments on the CMS 64s and (2) obtained funds for expenditures that it did not report on the CMS 64s. After reconciling the FY 2010 PMS accounts, the State agency did not take appropriate corrective actions for the $20.3 million because it did not have specific policies and procedures to resolve the differences identified or because it chose not to take action.

We found that OESE did not close audits timely and did not adequately maintain documentation of audit followup activities. From October 1, 2008, through September 30, 2013, OESE closed 86 external OIG audits. Of the 86 closed audits, 59 (69 percent) were closed more than 2 years after resolution and 34 (40 percent) were closed more than 5 years after resolution. The total of the monetary recommendations associated with the 86 audits was more than $587 million. Further, we found that OESE did not always adequately maintain documentation of audit followup activities. This included not maintaining supporting documentation of corrective actions in the official audit file and not maintaining documentation that supported that auditees actually took requested corrective actions before audit closure.