By Charlie Hayward
State auditors found “unsatisfactory” accountability and compliance levels within the highest management echelons of the Department of Health, the state’s largest agency.
The auditors’ “unsatisfactory” designation is reserved under state law to a few large state agencies who demonstrate chronic inability to maintain a reasonable level of internal control, and cannot fix problems identified in past audits. Major problems have persisted over multiple years and several governors.
The Health Department’s current operating budget is $14 billion, or 32% of total state spending. The audit covers 2013 to 2016, the last two years of the O’Malley administration and the first year of Hogan’s.
The Office of Legislative Audits (OLA) looked at expenditures within MDH’s executive and leadership budget units that spend about $55 million annually, The audit didn’t evaluate all MDH operations.
Of the 17 major findings, six were repeated from previous audits that had gone uncorrected.
Auditors made 49 recommendations, and MDH agreed with 46 of them. In its response to the audit, the department said fixes had been made for more than half the audit recommendations before auditors issued their final report last month.
Under-billing, over-billing the feds
MDH performs a substantial part of its work under reimbursable agreements with various federal agencies. During fiscal year 2016, MDH processed federal fund reimbursement requests totaling about $6.4 billion.
Auditors found MDH continues to send out millions of dollars of erroneous reimbursement requests due to poor internal controls and ineffective supervisory oversight. Auditors found a 20% error rate in a small sample of transactions, with $25.9 million of under-billings and one over-billing of $23.5 million.
This is a repeat finding by both state and federal auditors.
Contractors went unaudited
MDH maintains agreements with 24 local health departments…