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Audit Objective

Determine whether District officials properly disbursed payments for dental benefits, third-party administrative fees and utilities.

Key Findings

District officials allowed:

• The third-party administrator (administrator), and three utility vendors, who disbursed $488,545 during the audit period (for dental plan benefits, administrative fees and utilities), direct access to a District bank account to disburse these funds.
• Payment of utilities totaling $60,641 and administrative fees totaling $1,144 without audit and approval by the claims auditor.

Key Recommendations

• Discontinue allowing the administrator and utility vendors from having direct access to a District bank account and the ability to disburse funds.
• Transfer money to the administrator for the total amount payable in satisfaction of dental claims and initiate and disburse funds for all utility payments.
• Ensure that all claims are adequately supported and audited and approved by the claims auditor when required.

District officials agreed with our findings and have initiated or indicated they planned to initiate corrective action.