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Auditor Logo Susan Montee

Report No. 2008-100
December 2008

Complete Audit Report

The following report is our audit of the Office of Attorney General, Medicaid Fraud Control Unit.

The State Auditor is required by state law to conduct an audit of the Medicaid Fraud Control Unit (MFCU) "…to quantitatively determine the amount of money invested in the unit and the amount of money actually recovered by such office." The MFCU needs to ensure all required information required by state law is included and accurately reported in its annual report submitted to the General Assembly and Governor. In 2007, the MFCU collected almost $6.4 million.

The MFCU reported 110 referrals that resulted in an official complaint and/or case; however, records indicated an official complaint/case was not opened for over 200 additional referrals which were not reported. State law provides the number of referrals received by the office "due to allegations of violations" be reported. All referrals, whether the referral results in a complaint/case or not, should be reported. Since the MFCU must expend time and effort to evaluate each referral, not including all referrals minimizes the MFCU's efforts.

The report does not separately indicate the total amount of overpayments identified as a result of completed investigations. The overpayments reported include applicable damages ordered by the court. Additionally, the report does not specify whether such repayment is to be made by lump sum or in installments and only includes the total installment amount remaining outstanding for the year. The amount of damages and restitution due to other entities is not separately identified.

The report does not include the total amount of monies actually collected for the year and does not separately report whether monies collected by the MFCU are retained by the state or remitted to the federal government based on an allocation process, or for multi-state cases, the amount of the federal portion remitted directly to the federal government.

The report does not include the number of arrests resulting from investigations completed during the year and the number of criminal cases reported as initiated in 2007 was incorrect.

The MFCU needs to improve its internal controls, procedures and records. There is no initial record of the receipt of monies, a summary listing of accrued costs is not maintained, the beginning balance of accrued costs plus new costs less payments is not reconciled to the individual case records on a monthly basis, and written collection procedures have not been established. Not adequately monitoring accrued costs could allow these costs to remain uncollected, resulting in lost revenue to the state and federal governments.

The MFCU does not have one comprehensive database to account for all referrals received. Currently, three separate databases are maintained and these databases are not linked with each other. The use of three databases results in additional manual data entry, as well as some duplication of effort. In addition, because certain information needs to be recorded on all databases, the databases are not always updated on a timely basis. Also, the MFCU does not account for the sequential number assigned to referrals recorded in the hotline database.

Complete Audit Report
Missouri State Auditor's Office