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South Carolina State Medicaid Fraud Control Unit: 2011 Onsite Review


OIG oversees all Medicaid Fraud Control Units (MFCU or Unit) with respect to Federal grant compliance. As part of this oversight, OIG reviews all Units. These reviews assess Unit performance in accordance with the 12 MFCU performance standards and monitor Unit compliance with Federal grant requirements.


We based our review on an analysis of data from seven sources: (1) a review of documentation, policies, and procedures related to the Unit's operations, staffing, and caseload; (2) a review of financial documentation; (3) structured interviews with key stakeholders; (4) a survey of Unit staff; (5) structured interviews with the Unit's management; (6) an onsite review of case files; and (7) an onsite review of Unit operations.


Our analysis of collected data from fiscal year (FY) 2008 through FY 2010 shows that the Unit's caseload increased by 65 percent and that the amount of funds the Unit recovered nearly doubled, from $15.3 million in FY 2008 to $30.3 million in FY 2010. Although almost all Unit case files documented supervisory approval to open and close cases, the files lacked consistent documentation of periodic supervisory reviews. In addition, the Unit had not updated its policies and procedures manual to reflect its current operations or its memorandum of understanding with South Carolina's State Medicaid agency to reflect current law and practice. Finally, although the Unit maintained proper fiscal control of its resources, it did not report program income properly in FY 2010. We found no further evidence of noncompliance with applicable laws, regulations, and policy transmittals.


We recommend that the South Carolina Unit: (1) ensure that periodic supervisory reviews are documented in Unit case files, (2) complete revisions to its policies and procedures manual to reflect current Unit operations and revise its memorandum of understanding with South Carolina's single State Medicaid agency to reflect current law and practice, and (3) ensure that program income is reported properly. The South Carolina Unit concurred with all three of our recommendations.