The compliance division's Audit section conducts audits and reviews of health and
human services system contracts and grants to:
- Determine contractors' and grantees' compliance with federal, state and agency requirements,
- Reduce the potential for waste, abuse and fraud of federal and/or state funds.
The Audit section includes several functional units, including Sub-recipient Financial
Reviews, Medicaid/CHIP Audits, Contract Audits, Cost Report Reviews, and Outpatient Hospital/Managed Care Organization (MCO) Audits. Each unit
performs specialized compliance audits and reviews. The Audit section and its units
ensure compliance with state/federal requirements and laws.
Contractors, grantees or their employees should be referred to the Audit section
when suspected of waste, abuse or fraud activities including but not limited to:
- Claims for:
- Unallowable expenditures
- Expenditures not made
- Services not provided
- Services provided to ineligible clients
- Improperly licensed or contracted facilities
- Inappropriate expenditures of patients personal funds including trust funds
- Over-collection of applied income or co-payment amounts, and/or
- Questionable preparation of cost reports.
Sub-recipient Financial Reviews Unit
The Sub-recipient Financial Reviews unit performs three primary responsibilities:
desk reviews of Single Audits submitted by sub-recipients; quality control reviews
of Certified Public Accountant (CPA) firms that conduct sub-recipient Single Audits;
and limited scope audits of sub-recipients.
Desk reviews are conducted to ensure state and federal funds granted to sub-recipients
are properly and accurately accounted and reported in accordance with applicable
federal and statutory requirements. Audit reports submitted by sub-recipients are
reviewed for completeness, accuracy, and reasonableness.
Quality Control Reviews of CPA Firms
Quality control reviews are conducted to ensure CPA firms that perform sub-recipient
Single Audits are complying with the Quality Control Review requirements of the
Texas State Board of Public Accountancy. These reviews involve a study, appraisal,
or review of the professional accounting work by CPA firms performing attest services
for sub-recipients, and ensure the quality of work is acceptable. On-sight reviews
and evaluations of the CPA firms’ working papers are conducted.
Limited Scope Audits of Sub-recipients
Limited scope audits are conducted to ensure sub-recipients are receiving timely
limited scope audits of their financial records, operational activities, and compliance
with laws, regulations, and contractual agreements. These audits involve a limited
scope review of financial and non-financial information of sub-recipients to ensure
validity and accuracy of reported information, and compliance with state and federal
requirements. On-sight audits of sub-recipients are conducted on areas of identified
Medicaid/CHIP Audits Unit
The Medicaid/CHIP Audit unit provides oversight of HHS Medicaid/CHIP activities,
Medicaid/CHIP administrators, Medicaid/CHIP providers, and Medicaid/CHIP recipients
through compliance and enforcement activities designed to identify and reduce waste,
abuse, or fraud. The unit also works to improve efficiency and effectiveness of
the State of Texas' Medicaid/CHIP system.
The Medicaid/CHIP Audit unit develops a risk-based system for auditing Medicaid/CHIP
contracts and grants, responds to legislative requests and makes waste, abuse and
fraud referrals. Activities include but not are limited to performance audits, attestation
engagements, financial and compliance reviews, and/or other activities.
Audits and reviews may be conducted in coordination with the Medicaid Provider Integrity,
Office of Attorney General Medicaid Fraud Control Unit, and any related organizations.
Contract Audits Unit
The Contract Audits unit provides oversight and ensures accountability for vendor
contracts not audited in other OIG Audit units. The unit performs audits based on
a risk assessment approach of vendor contracts across all HHSC programs. The audits
are performed to ensure compliance with contract terms and accuracy of payments
under the contract. The unit also monitors Medicaid client trust funds maintained
by Intermediate Care Facilities for Mental Retardation to ensure that all fiduciary
requirements are met and that the client funds are protected from fraud and abuse.
Cost Report Review Unit
The Cost Report Reviews unit provides oversight and ensures accountability to the
provider cost reporting process. The unit performs desk reviews and field audits
of the following provider cost reports: Intermediate Care Facilities/Mental Retardation;
Home and Community Based Services; Community Based Alternatives; Community Living
Assistance and Support Services; Day Activity and Health Services; Primary Home
Care, Residential Care; 24 Hour Residential Child Care; Deaf Blind Multiple Disabilities
Waiver; and Nursing Facilities.
Outpatient Hospital/Managed Care Organization (MCO)
The Outpatient Hospital/MCO Audit Unit (OHMAU) was established to perform audits of the Medicaid Costs as reported in the Medicare Outpatient Hospital Cost Reports. In FY 2009, desk reviews and/or field audits will be completed for FY 2004 through FY 2006. OHMAU will also perform reviews of the Managed Care Organization’s Special Investigations Unit’s Fraud, Waste and Abuse Plans.
The purpose of our audit is to determine whether the provider’s request for reimbursement in the annual Medicare Cost Report includes only reasonable, necessary, and allowable costs incurred in providing outpatient services under the Texas Medicaid program and that the costs were reported in a format required by the Texas Health and Human Services Commission (HHSC). The audits are conducted in accordance with performance audit standards contained in Government Auditing Standards issued by the Comptroller General of the United States.
The audit includes obtaining an understanding of relevant controls, compliance criteria, and processes related to the preparation of the Medicare Cost Report. Accounting records, transactions and supporting documentation were reviewed to determine that only reasonable, necessary, and allowable costs were submitted.
The purpose of our Performance Reviews are to determine whether the provider’s Fraud Waste and Abuse Plans includes the required elements and relevant controls and processes to prevent, and reduce waste abuse and fraud in accordance with Title 1, Part 15, Chapter 353, Subchapter F, Rule 353.501 of the Texas Administrative Code. The reviews are conducted in accordance with Performance Audits contained in the Government Auditing Standards issued by the Comptroller General of the United States.