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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of the State of Connecticut Internal Service Funds," (A-01-92-02504)

December 11, 1992

Complete Text of Report is available in PDF format (1.38 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final audit report discloses that, contrary to Federal requirements, Connecticut's Bureau of General and Technical Services' Internal Service Funds had accumulated a surplus totaling $30.5 million in excessive retained earnings as of June 30, 1990. We noted that $17.8 million was related to our five year audit period, however, we could only verify that the State made an adjustment for $9.7 million against future indirect costs. Accordingly, we are recommending that the State make a financial adjustment for the remaining $8.1 million ($1.62 million Federal share) of the excessive retained earnings associated with our five year audit period. For the $12.7 million in retained earnings generated prior to our audit period, we are recommending that the Division of Cost Allocation negotiate a settlement of the Federal share with the State.