South Carolina Did Not Report Approximately $108.6 Million of the Federal Share of Medicaid and CHIP Collections Subject to the Increased COVID-19 Federal Medical Assistance Percentage
Learn how the AI-generated research projects were createdOverall Conclusion
The OIG determined that South Carolina did not accurately calculate and report the Federal share of Medicaid and CHIP collections subject to the increased COVID-19 FMAP during the audit period, resulting in underreporting of the Federal share (approximately $99.98 million, plus $8.59 million for the first quarter) and an overall overpayment of about $108.6 million to the State agency; lack of written policies and procedures contributed to reporting errors, prompting four recommendations to strengthen controls and FMAP-change handling.
Audit Scope
Audit period January 1, 2020 through March 31, 2025; reviewed South Carolina Department of Health and Human Services' reporting of the Federal share of Medicaid and CHIP collections on CMS reports (CMS-64 and CMS-21) and reconciled to accounting records, with emphasis on the increased COVID-19 FMAP period.
Key Findings Summary
The State agency did not accurately calculate and report the Federal share of approximately $108.6 million in collections subject to the increased COVID-19 FMAP during the audit period.
With the exception of the first quarter in which the increased COVID-19 FMAP applied, the State agency calculated and recorded the Federal share of these collections in its accounting records but underreported about $100 million of the Federal share on CMS reports.
The State agency did not calculate and accurately report the increased COVID-19 Federal share of collections it received during the first quarter that the increase applied (quarter ended March 31, 2020), calculating a Federal share of about $8.6 million that should have been reported.
View the Findings tab to see all 5 findings
AI-Assisted
AI Scope Summary
This audit evaluated whether South Carolina accurately calculated and reported the Federal share of Medicaid and CHIP collections subject to the increased COVID‑19 FMAP, for the period January 1, 2020, through March 31, 2025, and found underreporting linked to missing written policies and procedures; four recommendations were issued to align CMS reporting with accounting records and to establish controls for periods of unexpected or retroactive FMAP changes.
AI-Generated Insight
The report highlights how retroactive FMAP changes and missing formal reporting procedures can lead to multi-million-dollar misstatements; implementing formal policies, reconciliations, and training is essential to reduce inaccuracies in CMS reporting.
Audit Objectives
Our objective was to determine whether the State agency accurately calculated and reported the Federal share of collections subject to the increased COVID-19 FMAP.
Audit Findings (5)
The State agency did not accurately calculate and report the Federal share of approximately $108.6 million in collections subject to the increased COVID-19 FMAP during the audit period.
With the exception of the first quarter in which the increased COVID-19 FMAP applied, the State agency calculated and recorded the Federal share of these collections in its accounting records but underreported about $100 million of the Federal share on CMS reports.
The State agency did not calculate and accurately report the increased COVID-19 Federal share of collections it received during the first quarter that the increase applied (quarter ended March 31, 2020), calculating a Federal share of about $8.6 million that should have been reported.
These errors occurred because the State agency lacked written policies and procedures for preparing CMS reports and reconciling to accounting records.
As a result, the Federal Government overpaid the State agency approximately $108.6 million for the audit period.
Recommendations (4)
Adjust future CMS reports to reflect the Federal share of $99,983,506 in underreported collections during the audit period and refund this amount.
Adjust future CMS reports to reflect the Federal share of at least $8,592,050 in collections that were not appropriately calculated and reported during the first quarter of the increased COVID-19 FMAP period and refund this amount.
Develop and implement written policies and procedures to report the actual amounts from accounting records on the CMS reports and reconcile accounting records to the amounts of Medicaid collections it reports on the CMS reports.
Establish and implement written policies and procedures to appropriately calculate the Federal share of Medicaid collections during periods with unexpected or retroactive FMAP changes.