Summary

This operational audit of the Agency for Health Care Administration (Agency), for the period July 2005 through February 2007, focused on contract management.  Our audit disclosed:

Finding No. 1:     The Agency should enhance its contract monitoring policies and procedures to ensure that contract monitoring is adequately conducted.  In addition, the written policies and procedures required updates to reflect current practices.

Finding No. 2:     The Agency needed to significantly improve oversight of Health Maintenance Organization (HMO) contracts.

Finding No. 3:     Contract managers’ files did not always contain adequate documentation demonstrating the performance of contract monitoring, including adherence to established standards and criteria, communication of deficiencies to the contractor, and follow up on the contractor’s corrective actions.

Finding No. 4:     The Agency needs to enhance its contract management policies and procedures by requiring individuals taking part in the contract award or contract monitoring processes to attest in writing that they are independent of, and have no conflicts of interest with respect to, entities selected or monitored.

The Secretary's response is included at the end of this report as Appendix A.