Wisconsin’s highly-acclaimed Legislative Audit Bureau (LAB) has released two audits about the Wisconsin Health Insurance Risk-Sharing Plan (HIRSP) Authority. The HIRSP Authority offers medical and prescription drug insurance for those unable to obtain coverage in the private market or who have lost employer-sponsored group health insurance.
Financial records of the HIRSP Authority for the final six months of 2006 and all of calendar year 2007 were reviewed. The LAB did not find what it called, “significant concerns,” but it does advise that the HIRSP Authority work with the federal government to settle a federal cash management issue.
Every quarter, the HIRSP Authority should remit to the federal government interest earned on advances of federal funds. The LAB found that a $4,422,935 grant was awarded to Wisconsin for HIRSP during September 2006 by the Centers for Medicare and Medicaid Services (CMS) in the U.S. Department of Health and Human Services under a grant program. The entire amount was drawn by the Wisconsin Department of Administration (DOA) during November 2006 and transferred through the Wisconsin Office of the Commissioner of Insurance (OCI) to the HIRSP Authority during the first week of January 2007.
The LAB reports the HIRSP Authority had spent only $2,333,710 of the federal grant when it received the funds during January 2007. The remaining $2,089,225 was spent from January through June 2007. The HIRSP Authority did not remit to CMS any interest earned on the federal funds it received.
How could that happen? The LAB explains that there was a change in the administration of HIRSP effective July 1, 2006. Control was transferred from the Wisconsin Department of Health and Family Services to the HIRSP Authority effective July 1, 2006. Prior to that time, OCI received federal funds to be paid to the HIRSP Authority. State law was then changed to allow federal grant funds to go directly to the HIRSP Authority. As a result, the LAB reports, “the HIRSP Authority may owe interest to CMS on the advance of $2,089,225 it received in January 2007. Potential interest earnings on those funds are estimated to not exceed $33,000 for the period January through June 2007.”
The LAB writes that when the administration of HIRSP changed, staff members at the HIRSP Authority were unaware of and not informed about the cash management requirements. The audit recommends that the HIRSP Authority work with CMS, DOA, and OCI to resolve this issue and take measures to meet federal cash requirements in the future.
I commend the LAB for their consistently outstanding work. You can read their audits here and here.
