Category Archives: Office of Inspector General (OIG)

California Overcharged Medicaid by $20.3 Million in 2010

19 Tuesday Jan 2016

Posted by in Agency, California, Government, Office of Inspector General (OIG), Spending, Uncategorized

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A Federal investigation discovered California withdrew more funds from its Medicaid account than justified. The state also obtained funds for expenditures it failed to report. Even after a direct demand from the Feds, California has yet to take appropriate corrective actions for the $20.3 million overcharge. Instead, state agency staff moved federal funds from other accounts, erroneously claiming those actions satisfied the shortfall.

On December 17th, the Office of Inspector General (OIG) released results from an audit performed on California’s Federal Medicaid account. The investigation was sparked by an earlier audit of state Medicaid programs for 2011 after a Federal audit showing $1.3 billion in federal over-funding nationally.

In order to fund Medicaid programs, states anticipate the federal portion and submit quarterly grant requests. These funds are administered by the Centers for Medicare & Medicaid Services (CMS) and held in a Payment Management System (PMS). The states then withdraw these federal funds throughout the quarter. At the end of each quarter, states reconcile the account by either refunding back to or withdrawing from the federal account to cover verifiable expenses. They then submit a Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program, federal form CMS-64. In the case of California’s PMS account, fiscal year 2010 shows a discrepancy of $20.3 million.

Specifically, the OIG found the California Department of Health Care Services (DHCS) withdrew more funds from its Federal PMS account than expenditure reports support and it obtained funds for expenditures not reported. It also found the state did not take appropriate corrective actions for the $20.3 million.

Additionally, $88.5 million of expenditures are reported on the state’s 2010 CMS-64, although $80 million of adjustments reducing expenditures are not. Lastly, DHCS failed to withdraw Federal funds from the appropriate accounts. The OIG found the state regularly used the current fiscal year PMS account, rather than the account for the year correlating with their reports. This practice caused annual account balances to be incorrect.

Following the investigation the OIG issued the following recommendations to California:

  1. Refund to the Federal Government $20,340,232 that was not supported by net expenditures.
  2. Work with CMS to resolve the $88,465,923 of expenditures and $80,004,306 of reported adjustments for FY 2010.
  3. Ensure that it obtains funds only for reported net expenditures.
  4. Implement policies and procedures to resolve differences between the amounts awarded and obtained and the reported expenditures.
  5. Ensure that it can support the amounts it withdraws from its PMS accounts and reports as adjustments.
  6. Ensure that it reports the appropriate amounts.
  7. Strengthen procedures to obtain funds from the appropriate PMS accounts.
  8. Review the amounts it obtained from PMS accounts for FY 2011 and later years to determine whether they were supported by net expenditures and refund any amounts that were not adequately supported.

In response, the state agency agreed with OIG’s recommendations #1 through #2, and #6 through #8.

Yet, as of the release of the OIG’s investigation report, California had not addressed recommendation #5, and it had not refunded the Federal government the $20.3 over-draw. Instead, and without evidence of approval by CMS, the state transferred funds from other PMS accounts associated with years 2009, 2011, and 2012. Effectively, the state paid back the Federal government with its own money.

In addition, the state’s response to recommendation #4 failed to satisfy the OIG. During the investigation, OIG reviewed reconciliation procedures, including those implemented in March 2012. The OIG responded to DHCS claim of procedural improvements stating, “We reviewed all of those during our audit and determined that they were not adequate to prevent the issues identified in our report.”

As of yet, California has not improved processes in areas of concern, accounted for millions of dollars in Federal Medicaid funds, or offered any assurance the U.S. taxpayers will not continue to be burdened by the incompetence of government agencies with union protection against any measure of performance accountability. The final sentence of the OIG report does give some measure of comfort this will not conveniently go away:

“After reviewing the State agency’s comments, we maintain that our findings and recommendations are valid.”

This post was authored by NCPA research associate Belinda Silva.

– See more at: http://healthblog.ncpa.org/california-over-charged-federal-medicaid-by-20-3-million-in-2010/#sthash.P6GL8kBi.dpuf

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Illegal Minors: It’s Big Business!

13 Wednesday Jan 2016

Posted by in Agency, Government, Government Accountability Office (GAO), Illegal, Immigration, Office of Inspector General (OIG), Spending, Uncategorized

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BCFS

1,000’s Unaccompanied Illegal Minors and Millions of Dollars Delivered to Texas

The U.S. Department of Health and Human Services (HHS) Office of Refugee Resettlement (ORR) has facilitated the transfer of hundreds of Unaccompanied Alien Children (UAC) to Ellis and Rockwell Counties in Texas.  According to the U.S. Customs and Border Protection Service, a flood of nearly 10,600 minors has inundated the border in the past two months, shattering the already elevated numbers of the recent years, and overwhelming the U.S. Border Patrol.

Agency reports identify the UAC’s are majority male teenagers from countries other than Mexico.  County officials reported they received notice of the transfer late Tuesday, just one day prior to the arrival of the first bus.  Though public leaders voiced compassion for the children, many criticized the federal government for failing to provide adequate notice.

The Lakeview Camp and Retreat Center near Waxahachie, the Ellis County facility, is expected to house 500 minors and 200 support staff.  The Rockwell County site, Sabine Creek Ranch near Royce City, will accommodate 200 minors and 100 staff.  In a public letter, Jaroy Carpenter, Lakeview’s Executive Director, referenced the event as a “youth camp of orphaned children (ages 13-18) from South Central America.”

Sabine Creek Ranch (SCR) original written statement said they had not received a formal request to house the UACs.  However, the following day, December 11th, they revised their statement to say they will receive the minors. SCR also praised the leadership of BCFS Health and Human Services’ Emergency Management Division (BCFS-EMD), describing the organization as, “people you would really enjoy knowing and working with individually.” With that statement, it begs the question, “What is BCFS?”

BCFS Health and Human Services, (formerly Baptist Child & Family Services), is a Houston-based 501(c)(3), specializing in residential child care service to secure emergency shelter for abused and neglected children.  Recent financials show a 2015 operating budget of nearly $56.9 million for residential child care, $16.2 million for community-based service, and $119,890.00 for international services.  These are astounding numbers, but even more so when compared to the organization’s previous years.

UAC

In a 2014 letter to the Secretary of HHS, Senator Chuck Grassley pressed the department for answers regarding the funds provided to BCFS.  Grassley requested the department justify the outrages spending per child, and explain the nearly $450,000 salary for the non-profit’s Chief Executive Officer (CEO).  In addition, Grassley wanted answers to the lack of transparency for an organization that receives 95.9% of their revenue from public support.  But, BCFS is only one of many recipients of a massive financial windfall from the government’s new children’s program.

With its $3.7 billion budget and recent classification changes by the Obama Administration, the UAC program has created the incentive for illegal immigrants to make the harrowing trip from their homeland to the promise land.  Through HHS, the Administration has infused massive amounts of federal funds into organizations like BCFS.  As demonstrated by the above example of BCFS, funding for housing and care has burgeoned since 2011.  Also, the amended classification rules for a UAC creates a misleading image of kids making a solitary, dangerous journey.

According to program changes, a person younger than 18 years, not traveling with a verified parent or legal guardian, is to be documented as a UAC.  For example, a 17-year-old, traveling with a sibling, aunt, grandparent, or unverified parent, is classified as unaccompanied, although program rules require the minor to be housed with the accompanying family member, at a rate of 2 minors per adult.  To maintain the 2:1 ratio, the program provides paid attendants.  Additionally, if their home country is not Mexico or Canada, the minor may be eligible for refugee status.  They are then reclassified from an Unaccompanied Alien Child (UAC) to an Unaccompanied Refugee Minor (URM), at which point they may qualify for lifetime federal benefits.

There is no arguing the U.S. is compassionate and charitable.  As so, federal programs should provide aid when events warrant as opposed to creating humanitarian crises.  A more thorough consideration of the impact of such programs is crucial.  A true humanitarian, and cost effective approach to the migration would be to work with international agencies within the countries of exodus, as opposed to enticing their youth to leave.  Enhanced opportunities, education, and safety at home would alleviate the desire to embark on a perilous journey to an unknown future.

“Green” Energy: The Color of Money

15 Tuesday Dec 2015

Posted by in Agency, Congress, Energy & Environment, EPA, Government, Government Accountability Office (GAO), Office of Inspector General (OIG), Renewable Fuels Mandates, Uncategorized

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In light of the recent legal filing for creditor protection by Spain-based, Abengoa, Inc., the viability of the Renewable Fuel Standard (RFS) is getting appropriate scrutiny and reconsideration. Through that program, the giant green-energy company received billions of U.S. taxpayer dollars in grants, loans, and subsidies. Still, last week they were forced to close their cellulosic ethanol facility in Hugoton, Kansas. The court filing for creditor protection came the day before Thanksgiving and within a week, the Kansas employees received layoff notices while many creditors received nothing.

Economic predictions suggest taxpayer losses could amount to five-times that of the 2011 Solyndra collapse. For local farmers, $5 million in unpaid, delivered product prompted their cooperative (CHS, Inc.), to file a lawsuit just two days prior to Abengoa filing for protection in a Spanish court. While some articles and blogs appear to revel in an Obama administration failure, others denounce the fact-based reporting of Abengoa’s troubles as a hit-piece against green-energy. Neither position is accurate, valid or productive.

From a free-market, smaller government perspective, the issue is not green-energy versus traditional energy sources. There is no denying the world would be a better place if everyone had access to affordable, renewable clean energy. But, consider the financial sink-hole that is the Hugoton plant and contrast that with the stunning announcement that it has sold zero gallons of cellulosic ethanol, and it is apparent that to some the label of “green” energy denotes big money as opposed to an emphasis on low environmental impact.

It should be noted that Abengoa’s demise was not a shock to everyone. Various sources have been sounding the warning sirens for years.

  • A 2009 Government Accountability Office (GAO) report warned of multiple challenges to RFS’s increasing volumes of biofuels, particularly cellulosic.
  • November 2011: Senator Jeff Sessions of the Senate Budget Committee specifically requested all documents relating to Abengoa and other solar companies from the Department of Interior (DOI).
  • 2012 GAO letter to The Honorable Dianne Feinstein, and House & Senate members of the Subcommittee on Energy and Water Development, Committee on Appropriations stating it was the sixth time GAO had reported its concerns about (DOE) loan guarantees for biofuels.
  • March 2012 GAO report to Congress restating concerns about the lack of adequate review and oversight by DOE and its $30 billion loan program, detailing Abengoa as the recipient of $1.2 billion.
  • March 2012: U.S. House Oversight Committee report specifically finds loans and resources granted to Abengoa, created excessive risk. The report reveals that “Abengoa managed to obtain a DOE loan commitment for the lowest rated project across the entire DOE Junk portfolio — which received an extraordinarily low CCC rating and was still approved by DOE for a direct loan to the project. This overinvestment in this single firm will likely cause substantial harm to the taxpayer.”
  • May 29, 2012: Letter from the U.S. House Oversight Committee threatened the Department of Interior (DOI) with “compulsory action” if they failed to release requested documents related to Abengoa and other solar companies. The Committee stated appearance of preferential treatment in taxpayer-funded loan guarantees.
  • April 30, 2013: Office of Inspector General (OIG) reported Abengoa of received $2 million dollars through The American Recovery and Reinvestment Act of 2009 (Recovery Act) for a project completed before the passing of the law.
  • May 1, 2014: GAO warned a significant threat to taxpayers in the DOE biofuels loan programs due to poor oversight and deviation from monitoring and qualifying procedures that, “pose an unacceptable risk of default.”

Highlighted above are but a few examples of serious problems with the government’s renewable fuels program. So, as presented, critics are not opposed to the concept of green energy but see the RFS as a seriously flawed mechanism to that end. The wasting of billions of dollars on infrastructure for a product that is not market ready could be better served funding advancing research projects in laboratories. The simple concept of putting the cart before the horse comes to mind. It is not Capitalism when the Federal government, through sheer financial force develops unsustainable, artificial industries.

Even Abengoa knew the Kansas plant would not be self-sustainable. In a 2014 report to DOE, the company presented their risk mitigation plan. The list included a push for the development of “energy crops”, continued dependence on the RFS to maintain a premium for ethanol, and to encourage the USDA to allow farmers to produce cellulosic biofuel crops on Conservation Reserve Program (CRP) lands.

The Abengoa plan does not reflect the goal of eventual self-sufficiency, but instead, details what others may contribute to help restructure market fundamentals to suit Abengoa’s projected goals. That is not capitalism. We have limited lands for food production, and the thought of more farmland to biofuel production is alarming. Also, the move would defeat one of the RFS stated goals of developing renewable energy by utilizing material currently identified as low valued waste or by-products.

To be clear, green-energy, as in renewable, eco-friendly, sustainable, and affordable, is a national security and humanitarian issue. There is little debate about the need to pursue that end. But, the government mandates and financial handouts created extremely provocative incentives to abuse the U.S. taxpayers. Through big dollar, experimental programs that ignore market impact and economic viability, coupled with extremely lax oversight, the term “green-energy” takes on a different meaning.

– See more at: http://environmentblog.ncpa.org/green-energy-the-color-of-money/#sthash.SjW9Htzf.dpuf

OIG Announces Probe of EPA’s Reporting Practices on Biofuel Impact

26 Monday Oct 2015

Posted by in Agency, EPA, Government, Office of Inspector General (OIG), Renewable Fuels Mandates, Uncategorized

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The Office of Inspector General (OIG) has announced a probe into the Environmental Protection Agency’s (EPA) adherence to reporting requirements regarding biofuel’s impact on air quality. Under the Renewable Fuel Standards (RFS), the EPA is to submit to Congress a science-based triennial report on the effect of the controversial program.

As a result of the Energy Independence and Security Act of 2007 (EISA), changes were made to the Renewable Fuel Standard program (RFS), the program that mandates the blending of ethanol with petroleum-based fuels for domestic use. The law directs the Environmental Protection Agency (EPA) to analyze lifecycle greenhouse gas (GHG) emissions from the increased use of renewable fuels in comparison with petroleum-based fuels.

The Clean Air Act (CAA), defines the term “lifecycle greenhouse gas emissions” as the GHG impact from all emissions including land use changes and other activities. The law requires EPA’s report to include,

“…all stages of production of fuel and feedstock and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.”

According to the OIG’s announcement, the goal of the review is to determine the following;

  1. Whether the EPA has complied with the law on reporting requirements of the Clean Air Act.
  2. If the EPA followed a mandate to amend its previous biofuel’s environmental impact reports to reflect the findings of a 2011 study by the National Academy of Sciences.
  3. If the EPA used the National Academy of Sciences data in subsequent reports.

In preparation for the review the OIG has asked EPA to provide:

  • Triennial Reports to Congress issued after the EPA’s first report in 2011, and any other reports to Congress on the environmental and resource conservation impacts of the RFS program.
  • RFS Antibacksliding Analysis required under Section 211(v) of the Clean Air Act.
  • Documentation of the EPA’s response to the 2011 National Academy of Sciences study and its recommendations.
  • Documented changes or planned future modifications to the RFS regulatory impact analysis or lifecycle analysis based on findings/recommendations from the 2011 National Academy of Sciences study, Triennial Reports to Congress and/or Antibacksliding Analysis (or documentation explaining why no changes were necessary).

The OIG’s investigation comes at a time when the call to cut corn-based ethanol is growing louder. Interestingly, the announcement came one day after the University of Tennessee released results of a comprehensive 10-year review which calls for a restructuring of the RFS program. The Tennessee study concludes, “We have had 10 years under the RFS and a commercially viable, next-generation biofuels technology has not emerged.”

– See more at: http://environmentblog.ncpa.org/oig-announces-probe-of-epas-reporting-practices-on-biofuels-impact/#sthash.TRDihzn8.dpuf