Review of Pension Costs Claimed for Medicare Reimbursement by AdminaStar Federal, Inc., for Fiscal Years 1991 through 2002

EXECUTIVE SUMMARY:

Our objective was to determine the allowability of pension costs that AdminaStar claimed for Medicare reimbursement for fiscal years (FYs) 1991 through 2002.  AdminaStar claimed $4,833,704 of unallowable pension costs for FYs 1991 through 2002 because it did not claim pension costs in accordance with the Medicare contracts.  We recommended that AdminaStar revise its Final Administrative Cost Proposals for FYs 1991 through 2002 to reduce its pension costs by $4,833,704 and claim future costs in accordance with the Medicare contracts.  AdminaStar agreed.