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111885 1 (1980-03-14)

handle is hein.gao/gaobacxsx0001 and id is 1 raw text is: 

                               WASHINGTON,  D.C. 20548


                                                      March 14, 1980

      Mr. Richard B, Lowe, III
      Acting Inspector General                                        I
      Department of Health, Education,                            111885
        and Welfare

      Dear Mr. Lowe:

           Subject:  New York Medicaid Fraud Control Unit - Audit Exceptionsj

           For the past several months we have been evaluating the effective-
      ness of selected State Medicaid Fraud Control Units authorized by sec-
      tion 17 of the Medicare-Medicaid Anti-Fraud and Abuse Amendments (Pub-
      lic Law 95-142).  As part of our work we evaluated the reasonableness
      of each fraud unit's budget, and on a test basis, checked the validity
      of their expenditures.

           During our review of the New York fraud unit we identified the Fed-
      eral share of unallowable expenses in the amount of $52,443, and an un-
      reported Federal share of program income of $12,787.  We discussed these
      matters with officials of the New York unit who agreed with our classi-
      fication of the unallowable expenses and the unreported Federal share of
      program income.  While other matters will be discussed in our overall
      report on the effectiveness of various State fraud units, including New
      York, we believe the matters discussed in this letter should be correc-
      ted as soon as possible. Therefore,  we recommend that you initiate ac-
      tion to collect the $65,230 due the Federal Government from the New York
      fraud unit.


          The unallowable expenses consisted  of $52,443 charged by the fraud
      unit to the section 17 grant for the balances of certain imprest funds
      in its expense reports. These charges were made  during the period
      April 1, 1978,through December 31, 1979. Since  imge    f.uad5.are assets
      (cash on hand), we believe the treatment of these-funds as expense items
      is unallowable. We discussed this matter with members of your  staff who
      agreed that the charges were unallowable because the terms of the sec-
      tion 17 grant provide only for the payment of actual program expenses.


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