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“hundreds of millions of dollars” in mismanagement

Carolina Journal’s Dan Way provides details of the new audit of the state’s Medicaid program, which shows a debacle of government mismanagement. The audit was released Thursday by Auditor Beth Wood. Gov. McCrory and HHS Secretary Aldona Wos joined Wood for a news conference.

Wood said the 70-page audit, covering the period from 2009-12, contains 20 recommendations for improvement, many of which have to do with budget planning and forecasts.

Moreover, McCrory said another audit of the Department of Health and Human Services is under way covering more current matters. Neither he nor Wood would say what it involved because it is likely to include investigative work.

“The potential savings through improved administration and better management of the program could be enormous for our citizens, perhaps reaching hundreds of millions of dollars,” Wood said.

“For the last three fiscal years, the state of North Carolina has exceeded the certified budget in the Medicaid spending area of over $1.4 billion in each year,” Wood said. Of that, she said, $375 million each year is state dollars; the balance is federal funds.

The Division of Medical Assistance, which is responsible for Medicaid, is incapable of forecasting multi-year budgets or providing accurate information on the current budget year, according to audit findings. 

As an example, Wood said, the division provided forecasts for only five of the 14 categories in which Medicaid money is spent.

Two categories had more than $190 million in shortfalls combined due to poor budgeting, Wood said. Another had an unanticipated $127 million surplus.

“In at least one case, Medicaid program officials told us that they didn’t really know what the spending was going to be in that particular area, and so they budgeted zero dollars,” Wood said.

In the private sector, the people responsible for this would be fired.

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