The objective of our review was to determine whether Billings maintained its accounts receivable for fiscal years (FYs) 2003-2005 pursuant to certain Federal requirements. We found that Billings did not maintain its accounts receivable for FYs 2003-2005 pursuant to certain Federal requirements. Specifically, Billings did not reconcile its general ledger to the subsidiary ledger or perform a thorough investigation of the differences. Additionally, Billings did not include Medicaid accounts receivable in its automated subsidiary ledger. On September 30, 2003, differences between the general and subsidiary accounts receivable balances totaled approximately $6.1 million. Although the U.S. Department of Health and Human Services (HHS) and IHS had developed policies and procedures to perform the required reconciliation, Billings did not follow them. As a result, Billings did not adequately safeguard the accounts receivable.
We recommended that Billings: (1) follow HHS and IHS policies and procedures that require it to reconcile its accounts receivable subsidiary and general ledgers monthly, and (2) maintain Medicaid accounts receivable on its automated subsidiary ledger system. IHS concurred with the audit finding and recommendations. IHS’s comments are included in their entirety in the Appendix.