Auditors performed data analysis and tested samples of the administrative expenses that Amerigroup reported in its fiscal year 2016 financial statistical report.
That testing identified $8.7 million in unallowable administrative expenses and $78,930 in questioned costs.
In its fiscal year 2016 financial statistical report, Amerigroup reported administrative expenses that were allocated from 649 cost centers.
Auditors reviewed the definitions (activity descriptions) for those cost centers and identified approximately $6.3 million in unallowable administrative expenses.
In addition, auditors performed data analysis on the entire population of administrative expenses that Amerigroup reported in its fiscal year 2016 financial
statistical report. That analysis identified an additional $473,399 in expenses that were unallowable under the contract, such as lobbying costs, litigation expenses,
charitable contributions, entertainment costs, and employee event expenses.
Auditors also tested a risk-based sample of 60 administrative expenses allocated from the cost centers to Amerigroup.
That testing identified an additional $400,301 in unallowable expenses and $78,930 in questioned costs.
Amerigroup inappropriately included $1.5 million in unallowable executive compensation because the salaries for the top 5 executives at Anthem, Amerigroup’s parent company, that
Amerigroup reported in the corporate allocation line item exceeded the limit on executive compensation that a MCO can report in its financial statistical report.
Amerigroup reported some allowable expenses in the wrong line item in its financial statistical report.
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