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B-204403 1 (1981-08-17)

handle is hein.gao/gaobabkdr0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED fTATES WASHINGTON D.C. 20548 B-20h403 Augtst 17, 1981 The Honorable Richard S. Schweiker The Secretary of Health and Human Services Dear Mr. Secretary: This Office is greatly concerned with the Department of Health and Human Services' (Ei-HSJrelationship with the State of New York7under the Departmental Federal Assistance Financing System (DFAFS). A serious condition in your grant finance system has permitted the State of New York to withdraw cash from the United States in excess of that which it is authorized to receive at the time withdrawn. In April 1980, GAO brought certain irregularities in the DFAFS New York State account to the attention of HHS officials. In May 1980, HHS officials notified New York that its letter of credit, the payment mechanism for public assistance and other programs, was being reduced in order to offset cash overdraws, and did in fact reduce the letter of credit. Subsequently, New York sued the Secretary for restoration of the letter of credit and on July 11, 1980, the United States District Court in New York vs. Harris, D.D.C., Civil No. 80-1265, ordered the let- ter of credit to be restored in full on grounds that HHS had not provided due process to New York State. Following the court or- der the letter of credit was restored by HHS to the $410 million monthly level and is still set at that figure. The decision of the court in New York vs. Harris rested strictly upon the failure of HHS to provide New York with due process before the State's letter of credit was reduced. It did not settle the questions concerning the ultimate rights to the dollars in dispute. Since it appears that a serious danger exists in that New York could continue to withdraw cash in excess of amounts legally payable under the DFAFS system, we believe it is essen- tial for the Department to take aggressive action to identify and collect any overpayments and prevent further overpayments to the State. We would also remind you that responsible certifying officers may be held personally accountable and required to make good to the United States any illegal, improper, and incorrect certifications they make, as well as any payment prohibited by law which does not represent a legal obligation under the appro- priation or the fund involved. (31 U.S.C. 82c)

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