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EXECUTIVE SUMMARY:
The objectives of this review were to (1) assess Empire Medicare Services’s (Empire) accounting controls related to the reconciliation of paid claims and the financial activity reports, (2) verify the accuracy of financial activity that contributed to the preparation of the fiscal year 2003 combined financial statements for the Centers for Medicare and Medicaid Services (CMS), and (3) determine the status of findings resulting from the 1998, 1999 and 2001 Chief Financial Officers audits. We found that Empire’s accounting controls were generally adequate and that the reconciliation was substantially accurate, supportable and complete. We also found that accounting controls over “Do Not Forward” transactions and the reconciliation of a CMS report to Empire’s paid claims tapes needed strengthening in order to prevent misstatements of the CMS financial statements. We recommended that Empire improve their reconciliation and financial reporting procedures.