Audit of Indian Health Service Headquarters Cost Statement for Fiscal Year 2005, A-09-07-00054

Page 2 – Yvette Roubideaux, M.D., M.P.H. We recommend that IHS: • adjust a future Headquarters cost statement for $3,362,387 of unallowable section 103 scholarship obligations that were reported in the FY 2005 cost statement, • review Headquarters cost statements before and after FY 2005 and adjust a future cost statement for section 103 scholarship obligations that were reported, • discontinue reporting section 103 scholarship obligations in its Headquarters cost statements, • work with the Centers for Medicare & Medicaid Services to determine the appropriate credits to offset $9,998,438 of sections 104 and 112 scholarship obligations that were reported in the FY 2005 cost statement and adjust a future cost statement for these credits, • implement procedures to ensure that it identifies and reports appropriate credits in its cost statements for sections 104 and 112 scholarships for which recipients had not fulfilled their service obligations, • adjust a future Headquarters cost statement for $349,999 of unallowable obligations related to construction, and • strengthen its policies and procedures to ensure that it does not include obligations reimbursed by other governmental entities in Headquarters cost statements. In its comments on our draft report, IHS disagreed that the section 103 scholarship obligations were unallowable under Medicare and did not explicitly address our recommendation to adjust a future Headquarters cost ...