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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Resolution of Audit Findings on States' Beneficiary Eligibility Determinations for Medicaid and the State Children's Health Insurance Program," (A-07-06-03073)

May 2, 2006

Complete Text of Report is available in PDF format (967 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, as of November 1, 2005, whether CMS had resolved Office of Management and Budget (OMB) Circular A-133 audit findings for fiscal years (FYs) 2002 through 2004 on States’ Medicaid and State Children’s Health Insurance Program (SCHIP) beneficiary eligibility determinations.  CMS had not resolved all Circular A-133 audit findings on States’ Medicaid and SCHIP beneficiary eligibility determinations.  As of November 1, 2005, CMS had not resolved eligibility findings in 11 of the 22 FY 2002 audit reports submitted for resolution or in 25 of the 28 FY 2003 audit reports.  Furthermore, CMS had not resolved the eligibility findings in the 25 FY 2004 audit reports.

The Medicaid and SCHIP eligibility findings were so significant, i.e., material, that they caused some auditors to issue Circular A-133 reports with qualified opinions for six States for both FYs 2002 and 2003 and for seven States for FY 2004.  In addition, auditors disclaimed their opinions on Medicaid eligibility for Georgia’s FYs 2003 and 2004 reports and for Washington’s FY 2004 report. 

We recommended that CMS (1) resolve the backlog of unresolved A-133 audit findings and (2) resolve A-133 audit findings on Medicaid and SCHIP beneficiary eligibility determinations within 6 months of receiving the audit reports.  CMS agreed with our recommendations but stated that “the overall tone of the findings. . . misrepresents the actions taken, the degree of responsiveness, and the level of commitment by CMS in resolving A-133 audit findings.”