The CMS’ “pervasive deficiencies” in its internal control of contractors expose the agency to increased risk of improper payments and waste, the U.S. Government Accountability Office concludes in a new report. Based on a random sample of contract awards and modifications, the report projected that at least 84% of the fiscal 2008 actions lacked one or more key control required by federal regulations, and at least 37% lacked three or more controls. For example, according to the report, the CMS entered contracts obligating the government to reimburse costs without first ensuring the contractor had an adequate accounting system.
The GAO describes a “weak overall control environment” with poor planning and inaccurate data on “the nature and extent of its contracting.” The study is a sequel to a 2007 review of certain CMS contracts, and the new report finds that the CMS “has not substantially” addressed seven of its nine earlier recommendations. Acting CMS Administrator Charlene Frizzera wrote in a response to the GAO that its review is specific to just 11 of “literally hundreds” of internal controls required for federal contracting and “does not provide a complete picture” of the controls established by the CMS.