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EXECUTIVE SUMMARY:
The objective of this audit was to determine whether federal Medicaid payments for transportation services paid to Special Service School Districts (SSSDs) within New Jersey were allowable and made in accordance with applicable federal and state regulations and guidelines. We determined that during the period July 1, 1998 through June 30, 2001, 7 of the 8 SSSDs were improperly reimbursed for transportation services and New Jersey improperly claimed $1,223,426 of federal financial participation (FFP) under the Medicaid program for these services. In our opinion, the improper payments were primarily caused by a lack of effective administrative or prepayment controls to prevent SSSDs from being reimbursed for transportation services. We discussed this issue with state officials who agreed with our findings and instituted corrective actions consisting of the establishment of an edit to preclude SSSDs from being reimbursed for transportation services. We recommended that New Jersey refund $1,223,426 to the Federal Government, identify and return any improper FFP claimed subsequent to June 30, 2001, and periodically review the SSSD transportation edit to ensure that it is functioning as intended. New Jersey officials concurred with our findings and recommendations.