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July 15, 2010

DiNapoli: Improper Payments To Montgomery County Employee’s Private Business

Audit Findings Referred to Law Enforcement

Montgomery County paid almost $34,000 to a medical transport service owned by a county employee in 2008. Of this money, $4,435 was paid for duplicate billings or incorrect charges, or for trips when no medical services were provided, according to an audit released by State Comptroller Thomas P. DiNapoli. DiNapoli’s office has referred information on the questionable payments to local law enforcement officials.

“The bottom line is more important than ever, especially when that bottom line involves taxpayer dollars,” said DiNapoli. “No one should be allowed to game the system so they can stick more cash in their pockets. This money belongs to taxpayers.”

DiNapoli blamed the problem on the county’s failure to ensure payments made to vendors were appropriate.

DiNapoli’s report found that:

  • $4,435 in questionable payments were made to the employee-owned service, including $2,788 for 251 trips when no medical services were received, $1,182 for trips paid at incorrect rates, $373 for 32 trips that were cancelled, and $92 for 10 duplicate billings.
  • The county did not ensure that payments were legitimate, properly documented and accurate because it failed to establish adequate controls over the administration of medical transportation.
  • County officials did not properly segregate the duties of authorizing, dispatching and recording medical trips for Medicaid-eligible clients, or ensure that the county paid for trips only on dates when medical services were scheduled.
  • The employee’s company was paid almost $34,000 for transportation services in 2008, which accounts for almost 62 percent of the $55,000 the county paid for private sector medical transportation during that year.
  • Sixteen claims for 2,932 medical trips totaling $41,164 did not meet the county’s claims policy standards; the claims included trip logs created jointly by the medical transportation dispatcher and the employee.

DiNapoli’s auditors also found that the county’s claims process was faulty. Employees involved in claims processing had access to aspects of the county’s accounting system not necessary to perform their jobs. Auditors’ tests of 50 claims showed that 18 totaling $1.4 million were not sufficiently documented. Although no improper payments were identified, the county was vulnerable to making inappropriate payments to vendors.

DiNapoli recommended that the county:

  • Recover amounts paid to the medical transport service based on erroneous claims.
  • Segregate duties for authorizing, dispatching, recording, and auditing billed trips for medical transportation.
  • Ensure claims are sufficiently supported with proper vendor supplied bills or appropriately signed claim forms which include the vendor name, itemized services provided, total amount due, and vendor signature.
  • Require the county auditor to audit and approve social services payments.
  • Develop procedures to verify Medicaid clients received medical services at the locations and dates listed on claims prior to approving claims for transportation services.
  • Ensure mileage and rates paid to outside vendors are in accordance with established Medicaid or contract rates, and that vendors are not paid twice for the same trip.
  • Update the claims processing procedures to ensure adequate internal controls.

County officials generally agreed with DiNapoli’s findings and indicated they would take corrective action. For a copy of the audit report, click here:

If you have any questions or would like a comment from the Comptroller’s office regarding this audit, please call the Press Office at 518-474-4015, or send an email.



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