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Audit of CMS Contract Closeout Process

Announced on  | Last Modified on  | Project Number: A-04-24-02048
Status
Completed
Agency
Centers for Medicare and Medicaid Services

OBJECTIVE

As one of the largest contracting agencies in the Federal Government, HHS performed contracting actions (i.e., award and modifications) totaling $38.5 billion in FY 2023. CMS was responsible for $7.4 billion, or 19 percent of HHS contracting action spending, in FY 2023. Prior OIG work identified issues with HHS contract closeout processes and procedures that are required after a contracting officer receives evidence of completing a contract. The closeout process: (1) ensures that goods and services are provided as intended, (2) validates final costs and payments, and (3) frees up excess funds for possible use elsewhere. We will determine whether CMS closed contracts according to Federal regulations and HHS policies and procedures.

TIMELINE

REPORT PUBLISHED

CMS Put $11.2 Billion at Risk of Fraud, Waste, and Abuse by Not Properly Closing Contracts (A-04-24-02048)

CMS did not close selected contracts according to Federal requirements. For the 50 contracts we selected for review, totaling $11.2 billion, that were eligible for closeout between October 1, 2018, and September 30, 2023, CMS did not meet one or more administrative closeout requirements. At the conclusion of our audit, 12 contracts totaling $2.1 billion were overdue for closeout.

26-A-04-012.01 to CMS - Open Unimplemented
Update expected on 05/16/2026
We recommend that the Centers for Medicare & Mediciad Services complete the administrative closeout requirements for the 12 contracts, totaling $2.1 billion, that remain overdue for closeout.

26-A-04-012.02 to CMS - Open Unimplemented
Update expected on 05/16/2026
We recommend that the Centers for Medicare & Medicaid Services develop policies and procedures that clearly define documentation requirements, roles and responsibilities, and alternative procedures used so that contracts are closed timely.

View in Recommendation Tracker
Work Plan Type
Office of Audit Services
HHS Agencies
Centers for Medicare and Medicaid Services
Issue Areas
Contracts Departmental Operational Issues
Target Groups
-
Financial Groups
Medicare A