Pre-Spinning The Medicaid Audit

It has been interesting to watch the pre-spin of an audit report due out on Friday which is expected to find some major issues with the state’s Medicaid program.  The somewhat predictable reaction from the Arkansas Department of Human Services tells me they are highly concerned over what will be in the report – focusing on the sampling methodically used by the auditor rather than the problem that they discovered.

I do admit to being a bit surprised by the strong initial response from Gov. Beebe’s office, although today they sound a bit measured in their comments to me and in this AP story this evening.

In this morning’s paper, the Arkansas Democrat Gazette quoted Governor’s spokesman Matt DeCample as saying that the Governor found the methodologies and procedures in the audit report “troubling and alarming” and he said it was “unusual to see that from an esteemed operation like Legislative Audit.”

As a former auditor, I can tell you that is a pretty big slam to question the methodologies and procedures the auditors use.  So I followed up with DeCample to see exactly what the Governor was taking issue with in regards to the audit.

His response in full is below. I asked DeCample if the Governor’s complaints are more directed at the audit process or if they are saying there was a departure from GAAS (Generally Accepted Auditing Standards).  He told me they have not yet seen the report, but were sharing the concerns expressed by DHS.  As for the audit itself, they will wait to see the final report.

Beebe’s comments were even more measured.

“I think the bottom line here though is if there are problems, fix them,” Beebe told the AP. “If there are errors, fix them. I don’t think anybody should run from criticism. I think it needs to be fair criticism and if it’s not, I think that needs to be pointed out. But to the extent that there’s fair criticism, fix it.”

Republican Speaker of the House Davy Carter was highly complimentary of Legislative Audit today.

“Roger Norman and his group are very professional. He and his staff would not be involved in any political stunt,” said Carter. “Any inference that that’s the case, I want to stick up for them. They’re a class act. They would not be involved in anything like that.”

I will also withhold final judgement until I read the report, but I share Carter’s high opinion of Legislative Audit.

I will add that it is very telling that DHS is this worried about what might be in the report.

Full response from Matt DeCample…

First and foremost, this administration and executive state agencies will work to correct any legitimate concerns raised by audits.

However, there are unprecedented steps being taken by Legislative Audit regarding this Medicaid audit that we find troubling.

Finalized audits from 2009, 2010 and 2011 are being revisited, and preliminary materials from those audits that had been successfully refuted by DHS are being re-introduced.

DHS has been denied an appropriate exit conference regarding 2012 Medicaid materials, which is the opportunity for an agency to sit down with Legislative Audit and review the accuracy of the findings before they are made public. We have never heard of any entity under the purview of Legislative Audit being denied this opportunity.

These concerns are in addition to the strong objections DHS has expressed about methodologies used and demands made through this audit process.

We are not going to speculate as to the motives of these unusual actions. We find them troubling because they do not seem consistent with the tradition of professionalism exemplified by Legislative Audit.