Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Administrative Costs Claimed Under Parts A & B of the Health Insurance for the Aged and Disabled Program - Associated Insurance Companies, Inc., Indianapolis, Indiana," (A-05-94-00080)

July 19, 1997

Complete Text of Report is available in PDF format (589 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

This final audit report points out unallowable costs of about $4 million claimed by Associated Insurance Companies, Inc. for Fiscal Years 1990 through 1993. The unallowable costs consisted of, and we recommended financial adjustments for: $2.4 million for credits due the Medicare program; $0.5 million for executive salary increases which exceeded the average increases for comparable positions, as measured by the Federal Bureau of Labor Statistics; $0.3 million for unfunded pension costs; $0.2 million for professional consultant services unrelated to Medicare; $0.2 million for indirect costs that were for non-Medicare related activities; and $0.4 million for various items which were unsupported, not in accordance with Federal regulations, or did not benefit the Medicare program.