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Audit (A-02-11-01007)

07-23-2012
U.S. Department of Health and Human Services Did Not Fully Comply With Executive Order 13520 When Reporting Fiscal Year 2010 High-Dollar Improper Payments

Executive Summary

Executive Order 13520 required the Office of Management and Budget (OMB) to identify Federal programs with the highest dollar value or majority of governmentwide improper payments (high-priority programs).

Within the U.S. Department of Health and Human Services (the Department), OMB identified nine programs as susceptible to significant improper payments. These programs were Medicare fee-for-service (Parts A and B), Medicare Advantage (Part C), and Medicare Prescription Drug Benefit (Part D), which are administered by the Centers for Medicare & Medicaid Services; Head Start, which is administered by the Administration for Children and Families; and Medicaid, Children's Health Insurance Program, Foster Care, Temporary Assistance for Needy Families, and Child Care Development Fund, which are administered by State agencies (State-administered programs).

Our review found that the Department did not fully comply with Executive Order 13520 in its fiscal year 2010 quarterly reports on high-dollar improper payments. Specifically, the Department did not report all identified high-dollar improper payments made by the Medicare Parts A and B programs. In addition, for Medicare Parts C and D, Head Start, and five State-administered programs, we were unable to determine whether the Department reported all high-dollar improper payments. As a result, the Department's quarterly reports were incomplete and cannot be used to adequately assess the level of risk of each of the Department's programs or to determine the extent of necessary oversight.

We recommended that the Department (1) consider developing a comprehensive list of overpayments for all of its high-priority programs that takes into account each potential source of an improper payment and that can be analyzed to determine whether the thresholds for reporting high-dollar improper payments have been met and (2) determine whether there are any high-dollar improper payments for the five State-administered programs that should be reported. The Department disagreed with our findings and provided reasons for why it believed it had complied with the Executive order's reporting requirements.

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