OIG audit shows some IHS COVID-19 funds misused, recommendations issued

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Although the Indian Health Service (IHS) allocated federal COVID-19 testing funds from the Families First Act and Paycheck Protection Act to meet the needs of the communities it serves, it did not ensure that the funds were always used in compliance with federal requirements, a U.S. Department of Health and Human Services Office of Inspector General (OIG) audit has found.

Furthermore, the OIG determined that the funds were misused – or, in one case, not used before the funds expired – because the IHS did not provide clear guidance or oversight to the programs for the use of the funds or the accounting and tracking of these funds. As a result, the programs did not always have a clear understanding of how the funds should be used or accounted for.

The OIG audit concerned $29.8 million in testing funds allocated by IHS to 10 Direct, Tribal, and Urban Indian Organization (UIO) programs within the geographical region of the Great Plains Area Office (GPAO) during the period between March 27 and December 31, 2020. For the audit, the OIG conducted interviews and reviewed agreements and contracts, funding and utilization reports, testing logs, and accounting records for the funds, as well as analyzing the formulae used to determine the allocation of the funds and inclusion of community needs.

Five programs used a combined $480,437 ($19,912 from one Direct program and $460,525 from four Tribal and UIO programs) on expenses that did not support COVID-19 testing or related activities. Furthermore, one Tribal program did not spend $86,261 in Families First Act funds because Tribal officials were unaware that the funds expired on September 30, 2022. In addition, two Tribal programs and one UIO program did not track the testing funds in accordance with Federal requirements.

The OIG made nine recommendations to IHS, including that the agency recover the funds not used on COVID-19 testing and other testing-related activities from the applicable programs, as well as any unused and expired Families First Act funds. In addition, OIG recommended that IHS strengthen its review and oversight processes, as well as provide adequate guidance to programs on the proper use and tracking of testing funds.

IHS agreed with five of the nine recommendations in the draft report and described its plan to take corrective action; it provided additional documentation for two of the findings it did not concur with. OIG amended those findings after reviewing the documentation and reduced the dollar amount of the recommended amount to be recovered, but otherwise maintained the findings and recommendations of its report.

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