Review of California's Medicaid Management Information System Expenditures for the Period July 1, 2003, Through June 30, 2005,'

Of the $183,179,805 (Federal share) of California's Medicaid management information system (MMIS) costs that we reviewed, $180,906,594 was allowable. The remaining $2,273,211 consisted of $2,009,782 of unallowable costs that were not equitably allocated to all benefiting programs, were not related to the Medicaid program, or were claimed twice and $263,429 of postage, administrative, and subcontract costs claimed at the incorrect reimbursement rate. 

We recommended that the State agency (1) refund $2,273,211 to the Federal Government; (2) strengthen internal controls and procedures to ensure that MMIS costs claimed for Federal reimbursement are allowable, equitably allocated to all benefiting programs, and claimed at the correct Federal reimbursement rate; and (3) review MMIS costs claimed for Federal reimbursement after June 30, 2005, to ensure that the costs claimed were allowable, equitably allocated to all benefiting programs, and claimed at the correct Federal reimbursement rate.