Inspector General: HHS Failing to Conduct Due Diligence Over $402 Billion in Annual Grants
The Department of Health and Human Services (HHS) is failing to share grant information in order to assess risk and mitigate misuse of federal dollars, according to a recent report by HHS Office of Inspector General (OIG).
In 2014, 13 agencies within HHS awarded nearly $402 billion in grants. The Centers for Medicare and Medicaid Services (CMS), the agency responsible for administering Obamacare, awarded 77 percent of grants, or nearly $310 billion.
As the report notes, officials responsible for grants use various tracking methods in order to mitigate risk of misuse. Nevertheless, in many cases agencies are failing to properly track funds and mitigate risk:
“Grant officials review reports to mitigate grantee risks, but these reports may be late and do not include descriptive information.”
In addition, many agencies do not share grantee information with other agencies, which creates further barriers to ensuring responsible use of taxpayer dollars:
“Less than half of awarding agencies share grantee information with other agencies; however grant officials report that they would like to receive information.”
Since 2010, CMS has awarded $5.4 billion in grants to states to construct Obamacare exchanges. Many states have misused these funds and failed to build a working exchange. Oregon and Massachusetts are under investigation for misuse of funds, Hawaii has shut its exchange down, and Vermont’s exchange remains unfinished.
In addition, a Government Accountability Office (GAO) draft report obtained by Reason Magazine found that CMS failed to track billions of dollars in grants given to state exchanges. As a result, neither the federal government nor the states are able to say how much of the $2.78 billion in Medicaid matching funds were improperly used to construct state exchanges.
The HHS OIG audit reviewed department directives available at the time and not information on specific grants. As a result, the report could not conclude to what extent grant funds were spent inappropriately. However, given the lack of controls present it seems likely that significant waste occurred.