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EXECUTIVE SUMMARY:
The objective of our review was to determine if intergovernmental transfers between Iowa and publicly owned hospitals included any Medicaid graduate medical education funds. We found that Medicaid graduate medical education funds were included in intergovernmental transfers between Iowa and the University of Iowa Hospitals. The University of Iowa Hospitals (a publicly owned hospital) returned Medicaid graduate medical education funds of $24.1 million to the State as intergovernmental transfers with no assurance that funds would be used for the graduate medical education program or to provide services to Medicaid-eligible individuals. Since the entire $24.1 million graduate medical education payment was returned, Iowa incurred no liability for the overall graduate medical education program and actually realized a net gain of $6.6 million. We provided the State agency with an opportunity to respond to the audit findings. Because the audit did not contain any recommendations, the State agency elected not to submit written comments on the audit results in this report.