Auditor General Jack Wagner Says Department of Health Failed to Oversee HIV/AIDS Prevention Money

HARRISBURG, Pa., May 5 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner today said the Department of Health failed to oversee HIV/AIDS Prevention Program money, resulting in the potential for fraud, including the payment of $223,000 to one contractor who submitted duplicate invoices.

Wagner's auditors determined that the Department of Health paid a contractor $223,000 for 45 duplicate invoices that were submitted among those for which the contractor was paid $1.2 million. The duplicate invoices included payments for prevention education, outreach services, and administrative costs provided by subcontractors. In several cases, the same documentation was submitted to Health three times for payment.

The auditors spoke to the contractor because of concerns that the invoices may have been purposely duplicated. The contractor's management stated that a former temporary employee may have duplicated the invoices; however, the former temporary employee said he did not duplicate invoices and processed only what was provided to him by a clerk.

Wagner said he was referring his report to the Pennsylvania Attorney General, the Pennsylvania Office of Inspector General, and the Office of Inspector General for the U.S. Department of Health and Human Services for review.

"This is a disturbing amount of money that is not properly accounted for and in these difficult budgetary times, state agencies must redouble their efforts to make every dollar count, especially when it involves a health-related program as vital to the commonwealth as HIV/AIDS prevention," Wagner said.  

The HIV/AIDS Prevention Program, administered by the Department of Health, provides HIV and AIDS counseling, testing and education programs across the commonwealth. As of Dec. 31, 2008, 31,210 Pennsylvanians were reported to be living with HIV or AIDS according to the Department of Health.

The Department of the Auditor General reviewed the Department of Health's HIV/AIDS prevention spending during the 2007-08 fiscal year, which totaled $13.3 million. Auditors also reviewed subcontractor supporting documentation for $774,000 and found waste, abuse or potential fraud existed in $502,135, or 65 percent, that the agency paid to 10 subcontractors operating prevention programs and providing counseling services. This total included inappropriate expenditures totaling $38,131, which included a water park trip to Wildwood, N.J. costing $7,465, inadequate supporting documentation totaling $399,828 and no documentation for $64,176.

Wagner also said that his auditors found a significant lack of concern from Health's division managers and project officers with how program money was spent.

According to project officers, contractors were encouraged to spend all of the money contracted to them, Wagner said. In fact, contractors who do not spend their contracted money are not considered as having fulfilled their responsibilities.

"The Department of Health appears unconcerned with how contractors spend taxpayer money as long as a contractor fulfills its responsibilities," Wagner said. "The spending of contract money should not be the priority over the quality of services provided."

The audit also found that the Department of Health must do a better job at monitoring the activities of prevention contractors participating in the program. Wagner said Health has not established written policies and procedures on how its project officers are to monitor contracts.

Wagner made 11 recommendations to improve the oversight of the program, including that the Department of Health should:

• Seek reimbursement of $502,135 from the contractors with respect to expenditures related to waste, abuse and potential fraud
• Seek reimbursement of $223,000 from the contractor with respect to duplicate invoices
• Immediately send internal auditors to the selected contractor in which the duplicate invoices were found to assess the control environment and take appropriate corrective action
• Require contractors to provide detailed source documentation along with the summary invoice to the department
• Develop written policies and procedures for monitoring HIV/AIDS contracts
• Require all contractors to have an annual on-site visit to ensure that they are complying with their contract terms and properly invoicing Health

"The HIV/AIDS Prevention Program is a valuable resource to educate people about the risks associated with HIV and AIDS," Wagner said. "The Department of Health must take a more active role to ensure that this money is properly accounted for."

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts more than 5,000 audits per year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's Web site at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General