Report on Advance Payment System Used By the Indian Health Service to Advance Cash to Contractors and Grantees

This final report addresses the audit of the Advanced Payment System (APS) used by the Indian Health Service (IHS) to advance cash to its contractors and grantees (contractor). Our review identified that APS controls did not ensure that cash advances were limited to the immediate needs of IHS contractors. As a result, contractors routinely received excess cash. We also found that contractors transferred IHS cash from designated bank accounts until it was needed to pay for expenses incurred under IHS contracts. As a result, IHS could not accurately account for its cash advances by auditing the bank accounts and could not be assured that IHS cash was only used to fund IHS activities and programs. Therefore, an important safeguard is being bypassed.