Audit of the Medicaid Drug Rebate Program in the State of South Carolina

EXECUTIVE SUMMARY:

This final audit report points out that the South Carolina Department of Health and Human Services did not have adequate accounting procedures and internal controls with regard to the Medicaid Drug Rebate Program as of June 30, 2002.  However, the State had addressed the majority of the problems we initially encountered and noticeably enhanced its ability to monitor and report drug rebate information as of December 31, 2002.  Nevertheless, improvements over drug rebate accountability are still needed in the following areas: (1) interest accrual and collections, and (2) data integrity, including records retention.  The State agreed with our findings and recommendations.