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B-164031(2) 1 (1974-11-05)

handle is hein.gao/gaobaaeji0001 and id is 1 raw text is: 



               COMPTROLLER GENERAL OF THE UNITED STATES     w    5    7
                         WASHINGTON. D.C. 2=8



B- 164031( 2.)                           NOV 5   1974       o q2oS/



The Honorable Ernest F. Hollings
United States Senate

Dear Senator Hollings:

     Your July 25, 1974, letter requested that we provide further
information on the current status of the Department of Health,
Education, and Welfare's (HEW's) actions concerning the grant made
to the Health Maintenance Organization of South Carolina, Inc.
(HMOSC). We provided you with an interim response on August 8, 1974.
We have now completed our review of HMOSC's expenditures for March 15,
1974, through August 15, 1974. The expenditures for this period
which totaled $62,360.17 are summarized in the enclosure to this letter.

     In his letter of March 15, 1974, advising HMOSC of his decision
to suspend further payments under the grant until certain conditions
were met, HEW's Acting Regional Health Administrator advised the
Project Director that no new obligations could be incurred under the
grant until certain information was submitted to and approved by the
HEW regional office. In a subsequent letter dated May 15, 1974,
advising HMOSC of his intention to terminate the grant, the Regional
Health Administrator told the Project Director that:
     * * * any new expenditures of obligations made or incurred
     in connection with the grant during the period of this sus-
     pension will not be recognized by the Government. Expenditures
     to fulfill legally enforceable commitments made prior to the
     notice of suspension in our letter of March 15, 1974, in good
     faith and in accordance with your approved project, and not in
     anticipation of suspension or termination, will not be con-
     sidered new expenditures.

The Assistant Regional Health Administrator interpreted these letters
for us as authorizing HMOSC to pay recurring costs, such as salaries,
rents, and utilities in accordance with the approved grant budget.

     Our findings with regard to certain expenditures for the period
covered by our current review are summarized below.



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