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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Houston Administrative Costs Claimed for Medicaid School-Based Health Services," (A-06-02-00037)

January, 21, 2004

Complete Text of Report is available in PDF format (977 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine whether the administrative expenditures claimed by the Houston Independent School District for school-based health services for the period October 1, 1999 through September 31, 2000 were reasonable, allowable, and adequately supported in accordance with applicable Federal regulations and the terms of the State Medicaid contract.  We found that Houston's system of calculating its claim was not reliable and unallowable costs were included in the calculations.  As a result, the claim for school-based administrative expenditures was not allowable or adequately supported in accordance with Federal and State regulations.  The supporting cost documentation, the allocation methodologies, and the time studies used by Houston did not support the Federal reimbursement of $2,792,575.  We recommended that Houston make (1) a financial adjustment of $2,792,575 through the Medicaid State agency for the Federal share of costs not in compliance with Federal and State requirements and (2) procedural improvements.