The lack of effective internal controls at the CNMI Medical Referral Services Office has led the entity to spend $27 million over its budget from fiscal years 2018 to 2019, according to the Office of the Public Auditor.
Also, according to the OPA audit report released on Sept. 23, the Office of the Attorney General has determined that Executive Order 2013-09 had no legal authority to reassign the office from the Commonwealth Healthcare Corp. to the Office of the Governor.
The OPA report noted that the MRSO operation has incurred a large variance between the appropriated amount and its reported expenditures. OPA showed a table that reflects the increase of expenditures for each fiscal year and have raised significant concerns regarding MRSO’s budget control and cash management.
This suggests, the auditor said, that the program has either been underfunded by the Legislature and/or overspending its allocation.
The MRSO is intended to provide CNMI residents with the means to obtain medical care and treatment that are not available in the Commonwealth for conditions that are life-threatening.
In its audit on MRSO for fiscal years 2018 to 2020, OPA intended to determine if effective internal controls are in place to ensure proper cash management, issue and enforce promissory notes, and ensure compliance with applicable laws, rules and regulation when determining patient and escort eligibility.
OPA noted that MRSO provides financial assistance for medical expenses, air transportation, lodging, ground transportation, and subsistence allowance. Yet OPA has found that MRSO does not have standard operating procedures for any of its three offices on Saipan, Guam, and in Hawaii.
“The lack of internal controls, such as standard operating procedures, to ensure an affordable, effective, and equitable program poses an ongoing potential risk for fraud, waste, and abuse,” OPA said.
At OPA’s request for an opinion, the Office of the Attorney General provided an opinion dated June 16, 2021, indicating that MRSO has no legal basis to execute promissory notes to medical referral patients for medical financial assistance.
Yet last May 3, OPA received a listing of promissory notes executed from 1995 to 2020. OPA said that based on that, about 630 promissory notes amounting to an estimated $12 million were executed. However, OPA found that about 270 promissory notes reflect only partial or full payment equating to an estimated total of just $420,000. OPA said the remaining estimated $11 million is outstanding as of May 3, 2021. The issuance and execution of promissory notes is at the discretion of the MRSO director.
OPA said upon reviewing the data provided by MRSO last May 3, they noted that an estimated $2 million promissory note was executed for one patient and signifies patients are able to avail of more than one promissory note and with potentially unlimited amounts.
OPA said they have been notified that the promissory note in question was executed in 2010, however, the estimated $2 million was erroneously entered in the listing provided to OPA for review.
“This indicates that promissory notes are not reconciled for accuracy and completeness,” OPA said.
OPA said audit procedures revealed that MRSO is not enforcing its process for collection as stated in its promissory notes.
Saipan Tribune will publish other findings, recommendations, and more details of OPA’s report.