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Boustany, Coburn Question HHS Audit Revealing Mishandled Taxpayer Dollars

March 11, 2011

Washington, DC – Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-LA) and Senator Tom Coburn (R-OK) sent a letter to Health and Human Services Secretary Kathleen Sebelius late Thursday afternoon, expressing a wide range of concerns regarding the findings of an independent audit of the Department of Health and Human Services (HHS) conducted by Ernst & Young.  The audit, which was contracted through the HHS Office of the Inspector General, examined the FY 2010 financial statements of the Department.  The results of the audit revealed that taxpayer dollars were mishandled on numerous occasions and in the following ways:

  • $794 Million in Mystery Money: Accurate budgetary monitoring is essential to the identification of cost overruns and material budgetary misstatements.  As the auditors compared balances in HHS Budget Accounts to their related proprietary accounts, the audit found differences of $794 million “that could not be explained.”[1]
  • Centers for Medicare & Medicaid Services (CMS) Data Vulnerable to Improper Access:  Auditors identified a number of vulnerabilities that could result in inappropriate access to Medicare information and networks.  At one contractor site, auditors observed unauthorized wireless access to the Medicare networks.  To make matters worse, CMS did not require all Medicare contractors to review user access to sensitive Medicare data.[2]
  • HHS Processes Date Back to 1980’s, Calling Into Question HHS’s Ability to Effectively Implement Current Law: A number of policies and procedures, including accounting practices, have “not been updated since the mid-1980s.”[3]  The audit noted that “the implementation of the [health care overhaul]… will have significant impacts with financial activity totaling in the billions to the Department over the next several years,” and additional financial systems training and procedure updating will be necessary to ensure correct accounting of these programs.[4]

The Ernst & Young audit, which was completed at the end of FY 2010, also included a number of recommendations that would move the Department into fuller compliance with its obligations.  Boustany and Coburn requested that the Department’s detailed corrective action plan and an update of any corrective actions that have taken place since the audit was issued by Thursday, March 31, 2011.

The full letter can be read here

[1] Id. At II-21.
[2] Id. at II-38, 39.
[3] Id. at II-23.
[4] Id.