Recommendations for Executive Action

1. Status: Closed - Implemented

   Comments: Since GAO reported, CMS has revised its procedures for preparing monthly Medicare benefit adjustment spreadsheets to include monthly reconciliations to help identify anomalies in ending balances of transfer accounts.

   Recommendation: To ensure that adequate controls are in place to safeguard Medicare assets, the HCFA Chief Financial Officer should further enhance the monthly Medicare benefit adjustments procedures to include monthly analysis of the transfer account ending balances to detect anomalies.

   Agency Affected: Department of Health and Human Services: Health Care Financing Administration: Office of the Chief Financial Officer

2. Status: Closed - Implemented

   Comments: In 2002, CMS developed and issued a comprehensive accounting procedures manual to direct staff in performing routine accounting and financial reporting activities for Medicare. This manual includes procedures for preparing the monthly Medicare benefit adjustment spreadsheets and monthly reconciliations that are intended to help identify anomalies in ending balances of Medicare trust fund transfer accounts. As a result of CMS actions, internal controls have been strengthened which should help prevent further errors in the Medicare trust funds.

   Recommendation: To ensure that adequate controls are in place to safeguard Medicare assets, the HCFA Chief Financial Officer should formalize the written procedures for preparing the monthly Medicare benefit adjustment spreadsheet and incorporate them in official HCFA policy guidance.

   Agency Affected: Department of Health and Human Services: Health Care Financing Administration: Office of the Chief Financial Officer

3. Status: Closed - Implemented

   Comments: In 2002, CMS started to use the procedures included in its comprehensive accounting procedures manual to train staff responsible for preparing the monthly Medicare benefit adjustment and reconciliations. In addition, the manual provides staff with a reference guide to use in performing the routine accounting and reporting procedures related to the Medicare trust funds.

   Recommendation: To ensure that adequate controls are in place to safeguard Medicare assets, the HCFA Chief Financial Officer should conduct training for those staff responsible for preparing, processing, and reviewing the monthly benefit adjustment and any staff whose job performance is directly related to the daily transfer account transactions.

   Agency Affected: Department of Health and Human Services: Health Care Financing Administration: Office of the Chief Financial Officer

4. Status: Closed - Implemented

   Comments: Since GAO reported, BPD has formally documented procedures to check the reasonableness of trust fund adjustments requested by CMS in its Standard Operating Procedures manual. As a result, internal controls have been strengthened which should help prevent further errors in the Medicare trust funds.

   Recommendation: To further strengthen the controls in place to safeguard Medicare assets, the Commissioner of the Public Debt formalize BPD's informal procedures for reviewing certain reports and related documents for the Medicare transfer accounts to ensure that HCFA's requests to adjust the balances of the transfer accounts and trust funds are reasonable.

   Agency Affected: Department of the Treasury: Bureau of the Public Debt

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