Review of the Internal Control Structure Over the Accounts Payable Balance for the Hospital Insurance Trust Fund at September 30, 1992

This final audit report presents the results of our review of the internal control structure over the accounts payable balance for the hospital insurance trust fund at September 30, 1992. We identified problems with the design and implementation of the Health Care Financing Administration's (HCFA) internal control structure and accounting policies used to report hospital insurance accounts payable balances. The HCFA's financial reporting instructions to the fiscal intermediaries were too general causing accounts payable amounts to be calculated and reported inconsistently. Also, peer review organization adjustments were not included in the accounts payable balance, and certain benefit payment checks and contracted services were improperly included in the accounts payable balance. Recommendations provide for steps HCFA can take to help ensure the accuracy and reliability of account payable balances.