Purpose

The objective of our examination was to determine whether payments made to American Academy of Pediatrics, District II (AAP) for various immunization initiatives under contracts C028275, C018189 and C022937, were bona fide and made in accordance with the contracts.

Background

The Department’s Immunization Bureau receives grants from the Center for Disease Control and Prevention (CDC) for outreach activities that provide information on immunizations to pediatric providers and the public. To carry out these immunization initiatives, the DOH entered into contracts with the AAP.

We examined approximately $1.5 million in select payments made during the period February 16, 2006 through August 13, 2013 from the Department to the AAP under contracts C018189, C022937, and C028275. Our objective was to determine if these payments were for expenses incurred in accordance with the work plans and were free of fraud, waste and abuse.

Key Findings

We found that overall, Department officials did not provide appropriate oversight to ensure the AAP’s vouchers included only actual and allowable expenses. This resulted in findings of $252,009.81 in expenses never incurred, $9,695.23 in expenses not allowed under the contracts, and $235,319.82 in expenses which cannot be substantiated due to lack of supporting evidence.

As a result of our examination, AAP former Executive Director, George Dunkel, pled guilty in February 2014 to Offering a False Instrument in the First Degree (a class E Felony) and paid $111,044 in restitution.

Key Recommendations

• From the total $252,009.81 paid to the AAP for expenses never incurred, recover the remaining $140,965.81 which has yet to be paid back to the State ($252,009.81 less $111,044 restitution paid by George Dunkel).
• Recover up to $9,695.23 paid to the AAP for expenses not allowed under the contracts where AAP does not provide sufficient, appropriate evidence to support payment.
• In the absence of sufficient, appropriate evidence to support legitimacy and relevance to contract objectives, recover $235,319.82 in payments for unsubstantiated expenses.
• Ensure Department staff obtain, sustain and demonstrate the knowledge, skills and ability necessary to effectively monitor contracts and ensure future payments are just, due and owing prior to payment.
• Require vendors to provide documentation to support expenses billed, as this may deter certain types of fraud and may also provide the Department the information necessary to validate a request for reimbursement with a third party.