Summary: GAO evaluated the Health Care Financing Administration's (HCFA) management of and control over federal funds for helping states, to acquire, operate, and enhance automated Medicaid systems by reviewing 129 automation-funding requests states made between November 1985 through July 1988.
GAO found that HCFA: (1) approved 116 automation requests, totalling about $119 million, which lacked such federally required supporting evidence as cost and benefit analyses and evaluations of alternatives; (2) did not adequately define the information states needed to include in automation requests; (3) lacked information on the status of 112 projects costing about $110 million, since it did not require states to report on approved automation projects; (4) generally did not determine whether completed automation projects were providing the expected benefits; and (5) funded automation enhancements at a 90-percent funding rate, although the applicable laws authorized 90-percent funding for automation acquisition and 75-percent funding for automation operation.
