Audit 403816

Significant Deficiency 2025-003 Inadequate Contract Review U.S. Department of Health and Human Services Passed through NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid Cluster) ALN #93.778 Award Year 2024 and 2025 Criteria: In accordance with North Carolina Department of Social Services Fiscal Manual, any contract used for the purchase of professional services must contain the following addendums: Certification Regarding Environmental Tobacco Smoke, Certification Regarding Lobbying, Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion - Lower Tier Covered Transactions, HIPPA Business Associate Addendum or Government Associates Addendum, Certification Regarding Transportation, Certain Reporting and Auditing Requirements and IRS Federal Tax Exemption. Condition: There was one error noted during our testing procedures whereby certain required certifications were not included in the contracts used for the purchase of services. Questioned Costs: There was no known effect to allowable cost and there were no known questioned costs. Context: We examined two contracts used for the purchase of services out of a population of three contracts used for the purchase of services. One contract tested did not contain all required documents. These findings are being reported wih the financial statement audit as it relates to Medicaid administrative cost compliance audit. The sample was not statistically valid. Effect: For the contracts that were missing the required certifications, there is a chance this could have allowed unallowable cost to be submitted for reimbursement. Cause: Ineffective contract review procedures and staff turnover led to the required language being omitted from the contracts. Recommendation: Contracts should be reviewed by staff knowledgeable of the program requirements to verify all applicable certifications and provisions are included. Views of Responsible Officials: County agrees with this finding. Corrective Action Plan: The Department of Social Services will implement new review procedures to verify that all certifications and provisions are included in contracts for the purchase of services.