EXECUTIVE SUMMARY:
Our audit showed that $7,809 or about 1 percent of the total $541,190 claimed by HPI on its FY 1998 Medicare cost report were claimed in violation of Medicare requirements. The following expenditures were unallowable:
- on call pay for Chief Financial Officer (CFO) - $5,520;
- flowers - $218;
- dry cleaning - $360;
- personal vehicle repairs - $288;
- meals - $826;
- duplicate expense account reimbursement - $43;
- personal homeowners insurance - $202;
- second telephone line at personal residence - $233; and
- excess salary payment - $119.
We recommend that HPI strengthen its procedures to ensure that costs in violation of Medicare reimbursement requirements are excluded from the Medicare cost report prior to submission. We will provide the fiscal intermediary (FI) with detail of the identified $7,809 in unallowable costs for appropriate adjustment to the HPI FY 1998 Medicare cost report and collection of the resulting overpayment.