Not All of Colorado's Claimed State Children's Health Insurance Program Expenditures Were Allowable

Although the Colorado Department of Health Care Policy and Financing (State agency) correctly claimed State Children's Health Insurance Program (SCHIP) expenditures for fiscal year (FY) 2007, not all SCHIP expenditures claimed by the State agency during FYs 1998 through 2006 were allowable pursuant to Federal requirements. For this time period, the State agency incorrectly overdrew Federal funds totaling $2.8 million. The overpayments occurred because the State agency did not adequately track unclaimed costs, fully correct a premium collection error, or adequately reconcile quarterly draws to its submitted quarterly reports.

We recommended that the State agency refund the $2.8 million to the Federal Government. The State agency concurred with our recommendation and said that it would refund the $2.8 million.