A Follow-Up Audit Report on Contract Managment at the Commission on Alcohol and Drug Abuse Page: 7 of 16
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Section 3-A: Enforce rules on
spending limits and prior
approval.
Section 3-B: Enforce rules
limiting contract
amendments.
Section 3-C: Continue to
strengthen contracts to
increase provider
accountability.
Section 4-A: Review
providers' budgets and
expenditures for
reasonableness.
Section 4-B: Review
providers' cost allocation
plans and verify that
providers use them properly.
Section 4-C: Continue efforts
to simplify payments and
validate rates.
Section 5-A: Verify accuracy
of provider billing.i i i.
Implemented
Implemented
Implemented
Implemented
Partially
Implemented
Implemented
ImplementedInternal Audit
Internal Audit
Internal Audit
Internal Audit
Internal Audit
SAO
SAO,
Internal Audit,
and KPMG, LLPInternal Audit has verified that a system exists to
refuse payment to providers when expenditures
exceed limits, or do not have prior Agency approval.
Management indicates that approved requests for
remodeling and equipment expenditures are compared
to actual costs to ensure limits are not exceeded.
Internal Audit is in the process of verifying
implementation of this recommendation.
SAO Note: Internal Audit completed its verification in
June 2002.
Internal Audit verified that contract language was
amended for FY 2001 and FY 2002 contracts.
Notification to oversight agencies was considered
accomplished in management's response that was
included in the SAO December report. SAO is an
oversight agency and monitors status findings.
Internal Audit verified that oversight is conducted to
ensure providers comply with contractual
requirements. In addition, Internal Audit verified that
related-party transactions are addressed in contracts.
New contracts and contract renewals were tested
during the FY 2002 internal audit of the contracting
process, with no exceptions noted for this attribute.
Internal Audit verified that the agency reviewed cost
allocation plans for FY 2001 and FY 2002. Internal
Audit also verified that TCADA's fiscal compliance
section performs audit procedures to determine if
providers are following the plans. However, certain
internal procedures regarding the cost allocation plan
review process were not being followed at the time
Internal Audit reviewed this status. Internal Audit
plans to perform another review in FY 2003 to
determine the extent of corrective action taken.
The Agency used the Federal Validation Rate Study
along with the finance workgroup's results as a basis
for developing new rates. On July 2, 2002, the
Agency's commissioners approved the proposed new
rates for fiscal year 2003 contracts.
Agency project officers analyze the billing and
performance data quarterly to determine and
investigate variations in billing. In addition, the Fiscal
and Program Compliance areas assess providers
according to risk and then review detailed information
during their audits.
Internal Audit has verified that providers are trained
how to determine financial eligibility and how to
properly document services rendered.A Follow-up Audit Report on Contract Management at the Commission on Alcohol and Drug Abuse
SAO Report No. 02-068
August 2002
Page 3
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Texas. Office of the State Auditor. A Follow-Up Audit Report on Contract Managment at the Commission on Alcohol and Drug Abuse, report, August 2002; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth517336/m1/7/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.