Michigan
Michigan Office of the Auditor General
Published March 6, 2026

Performance Audit Report School Services Program

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Overall Conclusion

Not sufficient.

Source Document

Audit Scope

Audit scope included MDHHS's monitoring of ISD compliance with SSP requirements and the SSP contractor's RMTS administration, covering period July 1, 2022 through September 30, 2024, with related considerations of school years 2020-21 through 2024-25.

Key Findings Summary

1

Significant improvement needed in monitoring ISD staff credentials to ensure eligible staff are included in quarterly RMTS.

2

MDHHS did not have interagency agreements in place with ISDs.

3

Routine monitoring of ISD SSP quality assurance plans needed.

View the Findings tab to see all 6 findings

AI-Assisted

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AI Scope Summary

This audit builds on SSP program objectives by assessing MDHHS's oversight of ISD compliance and the SSP contractor's RMTS administration, identifying weaknesses across credentialing, agreements, QA practices, billing, and SOC controls, and highlighting actions for stronger future monitoring and enforcement to safeguard Medicaid funds and program integrity.

AI-Generated Insight

The School Services Program (SSP) audit identifies material weaknesses in MDHHS oversight of ISD credentials, interagency agreements, and the SSP contractor's RMTS process, including billing and SOC controls. The conclusions show objective 1 is sufficient with exceptions, while objective 2 is not sufficient, indicating significant risk of improper SSP reimbursements and potential impact on federal funding. Strengthening credential verification, formal interagency agreements, routine QA plan reviews, robust RMTS monitoring, itemized billing, and SOC review are essential to reduce risks and improve program integrity.

Audit Objectives

1

To assess the sufficiency of MDHHS's efforts to monitor ISDs' compliance with SSP requirements.

2

To assess the sufficiency of MDHHS's efforts to monitor the SSP contractor's administration of the RMTS process.

Audit Findings (6)

1

Significant improvement needed in monitoring ISD staff credentials to ensure eligible staff are included in quarterly RMTS.

2

MDHHS did not have interagency agreements in place with ISDs.

3

Routine monitoring of ISD SSP quality assurance plans needed.

4

Significant improvement needed in monitoring of the contractor's administration of the RMTS process.

5

Monitoring of SSP contractor's billing practices needs improvement.

6

Improved monitoring needed of the operating effectiveness of the contractor's controls and security of SSP data.

Recommendations (6)

1

MDHHS evaluate the effectiveness and efficiency of the credential review process and/or whether an alternative method(s) could better meet its monitoring objective to ensure only eligible ISD staff are included in RMTSs.

2

MDHHS enter into interagency agreements with ISDs, as required.

3

MDHHS improve its routine monitoring of ISDs by obtaining and reviewing ISD SSP quality assurance plans.

4

MDHHS significantly improve its monitoring of the contractor's administration of the RMTS process.

5

MDHHS improve its monitoring of its SSP contractor's billing practices to ensure it receives timely itemized invoices for services provided.

6

MDHHS improve its monitoring of the SSP contractor's controls through evaluation of SOC reports, as required.