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Central Regional tightens watch on non-controlled drugs and residents' hours after audit

A new state audit of Central Regional Hospital in Butner says the hospital needs to keep better track of non-controlled drugs and hours logged by residents it pays universities for work.

There was no evidence that a physical count had ever been performed for the drug dispensing machine in the state psychiatric hospital, the audit said.

The auditors did not look at inventory procedures for controlled substances.

The state Department of Health and Human Services agreed with the audit finding and inventoried the drug dispenser. Procedural changes will prevent future miscounts, the department said in its written response to the audit.

The hospital is requiring medical residents to fill out time sheets in response to the audit finding that Central Regional was not keeping track of hours worked by residents provided under contracts with area universities.

State audit faults testing of new Medicaid billing system

The state Department of Health and Human Services' testing program for the new Medicaid billing system was seriously flawed, a report from State Auditor Beth Wood's office said.

The state is preparing to launch a new, expensive, and long-delayed Medicaid billing software on July 1. DHHS did not have adequate tests and evaluations in place to make sure the system, which DHHS calls NCTracks, is ready, the audit says.

In its response, DHHS agreed with the recommendations and is acting on them.

Even though DHHS was moving to plug holes in its preparations, the audit includes an ominous warning.

"The complexity of the NCTracks system makes it impossible to predict all of the scenarios that could impact the project, even after it is tested in accordance with industry best practices."

In other words, providers should expect things to go wrong.

Audit: Hospitals overcharged for inmate care

A state audit found the Department of Public Safety spent too much on inmate care when hospitals overcharged the prison system.

The audit looked at the 10 largest hospital claims during the 12 months that ended June 30, 2012 and found that half overbilled the state. The amount paid for the 10 claims came to about $1 million. The Division of Adult Correction paid about $105,000 too much.

Because the audit was limited to 10 claims, the results cannot be used to draw conclusions about the 893 hospital claims the Division of Adult Correction reported it paid, the audit said.

The audit recommends the division try to get the money back and hire a professional audit firm. In its response, the Public Safety Department said it is looking to hire a claims management contractor that can prevent overpayments.

Audit says DPI employee padded mileage

An employee at the state Department of Public Instruction collected $3,270 in undeserved  travel reimbursements over the 12 months ending June 2011, according to a state audit.

The state Auditor's office found the employee had overstated miles driven by 6,474.
DPI said in response that the employee will be disciplined and the department will get the money back. The employee works for the DPI division responsible for helping schools improve.

State audit finds problems in DENR permitting system

The data used by the N.C. Department of Environment and Natural Resources to process permits is incomplete and inaccurate and the timeframe to issue permits is skewed, according to a new state audit.

The extensive report issued Tuesday also finds fault with the express permitting system, suggesting it delays standard permits, costs more than it derives in fees and gets inordinate attention from experienced staffers. It also questioned whether the agency met its performance standards, though couldn't make sweeping conclusions on this point because of incomplete data.

DENR, however, rejected the audit's findings. In a blunt, three-page letter Secretary Dee Freeman, said he "regrets the countless hours of limited DENR staff resources ... to provide information for this report did not lead to well-grounded conclusions."

It prompted State Auditor Beth Wood's office to issue a point-by-point response suggesting DENR misinterpreted its findings. "We understand reviews ... often generate a lot of emotions, we want to make sure the reader stays focused on the issues," it stated.

Audit reveals spotty contract oversight

The state Department of Health and Human Services sought to downplay criticism of its oversight of the Medicaid claims system contract calling it old news,  but a draft state audit provides new details on problems that doubled the cost and led to a nearly two-year delay.

- DHHS assessed the contractor, Computer Sciences Corp., $10 million for delays. But DHHS could not provide documents showing how it reached that number. The contract was changed so neither side can get more money if the estimate is wrong. DHHS secretary Lanier Cansler said the department will write down such things in the future.

-The state did not identify $30 million in changes CSC made to the project on its own. Because state monitoring did not catch the changes, state workers did not know that the system being built was different from the one it approved. The state agreed to pay $15 million for the changes it accepted. Cansler said the state would have been required to make those anyway.

- CSC anticipated it would use about 75 percent of the computer code it had written for New York's Medicaid claims system for North Carolina.

The state Chief Information Officer told auditors in an interview this year that he would have objected to a vendor proposal that had the contractor re-use so much code written for another state because, in his experience, companies making similar estimates were not able to deliver. It turns out that CSC can only re-use 32 percent.

Audit: Department of Correction undercharges counties

The state Department of Correction has been undercharging counties for holding local inmates in state prisons, according to a state audit.
The state Auditor's Office said Correction has undercharged counties $465,000 for the so-called Safekeeper program.
The department has been charging counties $18 a day, even though the state legislature raised the rate to $40 a day beginning July 1, 2009.
Additionally, the audit report notes that counties have overdue charges totaling $2.36 million, and Correction has not turned those over to the Attorney General's office as required by law.
Since counties sometimes hold state prisoners in local jails, the department could cancel out $1.5 million in the amount counties owe with money it owes the counties, the audit said.
The Department said it will start charging counties the higher rate on Oct. 1, will turn bills more than 90 days overdue where there is no repayment agreement to the Attorney General's office, and seek legal advice about offsetting bills to counties with money the Department owes them.

Still no audit from Adams

The N.C. Legislative Black Caucus Foundation has still not released an audit.

An article in the Greensboro News-Record today notes that state Rep. Alma Adams, who heads the foundation, had previously said she would release the results of an audit in October.

The foundation, which is tied closely to the N.C. Legislative Black Caucus, was criticized for its handling of donations to Hurricane Katrina victims and giving college scholarships to relatives of caucus members.

Now that October's over, the paper called for an update:

"They got a little bit behind on our audit so I don't have all the information I want yet," Adams said. The "they" in this case is a private auditing firm hired by the caucus. "My expectation is I'll have something to say before the month is out."

Audit: DOT overpaid for office supplies

An audit found that the Department of Transportation overpaid for office supplies.

Acting on a hotline tip, state Auditor Les Merritt's review found that the agency did not follow purchasing policies and had a conflict of interest involving a supervisor and an office supply business, Dan Kane reports.

The review found that the DOT inappropriately purchased about $175,000 in office supplies and data processing equipment over a three-year period which should have been purchased from vendors that have negotiated prices with the state.

Those contracts typically save money because vendors are willing to offer lower prices in exchange for high volume sales.

Transportation Secretary Lyndo Tippett said in a written response to the auditor that his staff would follow purchasing requirements. He said staff would receive more training, both on purchasing and ethics.

More after the jump.

Christmas bonus?

A state review released today of an Anson County nonprofit said that the former executive director was overpaid by roughly $36,000 and had spent more than $6,500 on questionable and "possibly fraudulent" expenditures such as a veterinary bill, car parts and Christmas items.

The executive director of the Anson County Domestic Violence Coalition, which has received roughly $400,000 in state funds since 2004, resigned in February as some of the expenditures came to light. The audit found that the coalition's board had "rubber-stamped" many of the expenditures and lacked internal controls to catch misspending, Dan Kane reports.

The questionable spending has also led to an overhaul of the board, with several members replaced. The new board in a letter to the state auditor does not dispute the findings and said it is taking action to recover the money. State Auditor Les Merritt has referred the findings to the attorney general's office.

Chris Mears, a spokesman for the auditor's office, said the coalition's troubles illustrate the need for better oversight of the several thousand nonprofits that receive state funds each year.

State budget proposals by the House and Gov. Mike Easley would award the state auditor's office with an additional $180,000 that would largely go toward nonprofit oversight, but the Senate budget did not include those expenditures and cut another $50,000 from the office.

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