Skip to Content

Department of Health and Human Services

Office of Inspector General -- AUDIT

"Summary Report on Nationwide Audit of Training Contract and Administrative Costs Charged to Department of Health and Human Services Supported Programs," (A-02-95-02002)

April 25, 1997

Complete Text of Report is available in PDF format (3.28 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides a summary of the results of our nationwide audit of training contract and administrative costs charged to the Department of Health and Human Services supported programs in the States of New York, Illinois, California, Missouri, Oklahoma, Florida and New Jersey. Collectively, these States claimed approximately $310 million in training costs during the audit periods.

The primary objective of the audits performed in the States other than New York was to determine if some or all of the conditions found during our earlier reviews of training practices in New York, including those reported under Common Identification Number: A-02-93-02006, also existed in other States. Specifically, the audit objectives were to determine if:

In New York, the primary objective was to provide audit assistance to the Division of Cost Allocation (DCA) in verifying that the New York State Department of Social Services (NYSDSS) did not allocate training contract and administrative costs between FP and FNP programs. This information would then be taken into consideration during DCA'S negotiations with NYSDSS to resolve this issue.

Our audits determined that:

Overall, we found improper practices for identifying and charging training and administrative costs existed to some extent in all seven States reviewed. As a result, we have recommended financial adjustments totaling $58,222,453 ($36,866,400 Federal share).

The Assistant Secretary for Management and Budget (ASMB) has been assigned the responsibility to negotiate all public assistance CAPs through which all administrative costs (direct and indirect) are normally charged to Federal programs. This responsibility also includes resolution of all government-wide accounting issues that impact public assistance programs, such as those identified in this report. Therefore, we recommend that the ASMB advise other entities involved in administering training contracts of the conditions found in this review. We also recommend that the ASMB coordinate efforts to periodically review future training expenditures claimed by the States to ensure that they continue to adhere to regulations governing the allocation and claiming of training costs.

In responding to our draft audit report, ASMB was in substantial agreement with the findings in the report and offered comments and corrective actions it anticipated taking in the future. In addition, ASMB fully concurred with our recommendations and indicated it would take appropriate action to not only notify operating agencies of the findings in the report but also coordinate efforts to periodically review future training expenditures.