The District’s inspector general has come down hard on the Department of Health and an unnamed senior employee for signing a contract that violated the city’s procurement laws and may have been a bad deal for taxpayers.
An audit released this week revealed that a $936,000 contract for nonemergency transportation of Medicaid recipients, authorized in May 2002 by a senior official in the Medical Assistance Administration, bypassed procurement laws and left the city holding the bag for a deal no one can say was worth the money.
“No evidence was provided to us to indicate that DOH received a fair and reasonable price for the services provided by the contractor,” the audit reported. “The document authorizing the services was prepared and signed by a District employee who did not have contracting authority.”
The employee’s name has not been disclosed. There was no evidence, auditors said, of any fraud or kickbacks, and his mistake appeared to be one of simply not knowing the rules.
The transportation audit is one in a series focused on the District’s Medicaid program as Inspector General Charles Willoughby tackles the “substantial risks of loss, waste orabuse associated with Medicaid-covered benefit programs,” according to the office’s 2005 annual report. The District wrote off more than $100 million in nonrecoverable Medicaid expenses in fiscal 2003.
Transporting Medicaid recipients is a service the city must provide to qualify for federal matching funds. But the unauthorized contract with Affiliated Computer Services was nothing more than a deal to broker rides — that is, ACS did not provide transportation, but rather operated a call center.
Procurement officers thought otherwise and later justified the price tag.
The contract was terminated in March 2004 once officials realized it wasn’t valid. The ACS bills were paid in August 2005 because the city was liable.
“There was no basis for us [to] determine whether the deal was good or bad,” said Salvatore Guli, the inspector general’s director for field operations and technical matters.
The employee who signed the ACS deal has been formally reprimanded and “will be removed from all responsibilities involving procurement related activities,” according to the Health Department’s written response to the audit.
The department has also informed all senior staff that contracting is only to be done by authorized officers.
Upcoming Medicaid audits
» Nursing homes
» Managed care organizations
» Transportation
» Medicaid Management Information System
