Audit of Administrative Costs Claimed Under Parts A and B of the Health Insurance for the Aged and Disabled Program by Associated Insurance Companies, Inc.

This final audit report, prepared by Sheffield, Dallmann and Haley, Ltd., under contract with the Office of Inspector General, provides the results of an audit of Medicare Part A and Part B administrative costs totaling approximately $67.4 million claimed by Associated Insurance Companies, Inc. (contractor) for Fiscal Years ended September 30, 1987 through 1989. The report points out that about $3.8 million of the claimed costs were unallowable. Also, the auditors point out that the contractor failed to claim about $0.4 million to which it was entitled. The auditors recommended financial adjustments and procedural improvements to correct the weaknesses noted.