I think we can all agree that none of us want to be audited. We all understand that it is necessary, but we do not want to be the ones on the chopping block. The California government now shares your view. California has made a massive accounting error that is going to affect the state’s residents for the foreseeable future. The program most effected will be Medicaid. California ended up with a deficit of $1.9 billion.
There was not a single accounting error, but several that compounded on themselves. Since Medicaid is joint funded the Department of Finance did not account for the amount the state owed the federal government for their share of the drug costs. California needed to pay the federal government $487 million in rebates from drug makers. They also under costed one of their new programs and double counted their expected savings. As you might expect that is a poor combination. Unfortunately, the tax payers are going to be the ones to foot the bill for years to come all because of an accounting error. Moral of the story is always have a good accountant around they can save you a huge headache.
The Pathways Team