- The Washington Times - Thursday, February 19, 2004

A D.C. government audit has faulted the city’s public school system for failing to submit annual Medicaid cost reports and for giving bonuses to administrators without oversight by the Board of Education.

Auditors for the Washington-based firm KPMG LLP issued the findings in a recent report to the D.C. Office of Chief Financial Officer.

According to the audit, the D.C. public school system has failed to submit annual cost reports to the city’s Medicaid Assistance Administration for 1999 through 2002.

“Failure to submit prior-year cost reports … has resulted in the use of local dollars to fund what might otherwise be federally reimbursable costs,” auditors wrote.

Under the law, school systems can receive federal funding for certain special-education costs, including counseling, social work, and physical and speech therapy. But cost reports documenting the expenditures are required for school systems to receive accurate reimbursement under Medicaid.

“We have filed reports up through 2000, and by this June, it is our goal to be up-to-date with all reports,” said Ray Bryant, chief of special-education reform for the school system.

“We have done a lot of things to bring our Medicaid house in order,” he said.

Mr. Bryant said the school district began overhauling its Medicaid operations after taking over from the Office of the Chief Financial Officer in 2002.

He said the school district expects to submit all overdue cost reports this summer.

“I want us to be in a position to have the best Medicaid operation in the country,” said Mr. Bryant, who was hired in August 2002.

One obstacle, he said, has been that the school system cannot obtain a list of all Medicaid-eligible students from the Medicaid Assistance Administra- tion.

“We’re currently working to try to find a solution to that,” Mr. Bryant said.

He also said local dollars would not be lost because of the late reports.

“The fact that the reports weren’t done on time doesn’t mean the window closes,” Mr. Bryant said. “I expect that we will still get one-time payments settling the cost of those prior years.”

The Jan. 23 report to the . Office of the Chief Financial Officer does not indicate how much funding has been lost or stands to be lost as a result of the nonsubmission of Medicaid cost reports.

“Resolving the record-keeping issues will allow the District to maximize its federal reimbursement and ensure that local dollars are used only to the extent necessary,” auditors wrote.

Mr. Bryant said the school system also is working toward a more streamlined process to provide Medicaid through a fee-for-service system.

In a separate finding, the KPMG audit report suggested changes in the school system’s policy of giving bonuses to employees.

“Supplemental payments, such signing and performance bonuses, were approved by the superintendent without appropriate oversight by the school board,” auditors wrote.

The report recommended that the school system require “all special payments made to employees and approved by the superintendent, be approved by the school board.”

The report does not state which employees received bonuses last year or how much the bonus payments cost the school district.

However, salary records obtained this week through an open-records request show that several top administrators are eligible for signing bonuses of at least $5,000.

Some contracts also include stipulations that allow employees to be eligible for signing bonuses on the anniversary of their start date.

“Your annual salary will be $151,050 with an annual signing bonus of $10,000. Your salary will be reviewed annually, and you will also be entitled for consideration of a bonus up to $5,000,” reads a letter summarizing the employment contract for Elfreda W. Massie, who was hired in April 2003 as chief of staff for former Superintendent Paul L. Vance. She took over as interim superintendent after Mr. Vance retired in December.

Records show that Mr. Vance also signed off on $22,500 in retroactive signing and performance bonuses for former chief information officer Linda Wharton Boyd and for Louis Erste, former chief operating officer.

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