OIG recommends South Carolina reconcile $108.6 million federal-share collections
Oct 4, 2026 edition · GC-2026-0193 · Published 2026-10-04 · Version 2 · Final
OIG recommended South Carolina reconcile and refund about $108.6 million in underreported federal-share collections affected by increased COVID-19 FMAP; the state concurred with three recommendations.
What happened
OIG issued its South Carolina collections audit September 30, 2026 and posted it October 2. The audit found that South Carolina did not accurately calculate and report approximately $108.6 million in federal-share Medicaid and CHIP collections subject to the increased COVID-19 federal medical assistance percentage. This is a reconciliation and federal-share reporting finding, rather than a finding that every underlying provider claim was fraudulent. The amount describes the audit's calculated underreporting, not a court-imposed settlement.
Among four recommendations, OIG called for adjusting future CMS reports and refunding the federal share of the underreported collections, including $8.6 million associated with the first quarter affected by the enhanced FMAP. It also recommended written procedures that reconcile reports to accounting records and address unexpected or retroactive FMAP changes. South Carolina concurred with three recommendations and described completed or planned steps. The summary therefore should not be characterized as disagreement with every recommendation or as proof that the entire refund had already been completed. Finance and program reporting teams need to reconcile the collection period, applicable federal share and supporting ledger together.
Scope and timing
- Authority status
- Final
- Applicability
- Operationally relevant
- Audience
- Health systems, Provider networks
- Jurisdiction
- Federal
Why it matters
Retroactive or unexpected FMAP changes can affect federal-share collections even when the underlying cash receipts are recorded correctly.
Recommended action
Reconcile collections, applicable FMAP periods and CMS reporting to accounting records. Document exceptions and review the exact recommendations and state response before characterizing repayment status.
Case details
- agencies
- HHS OIG
- entities
- South Carolina Medicaid and CHIP
- action Type
- Audit
- event Date
- 2026-10-02
- alleged Conduct
- OIG reports South Carolina did not report approximately $108.6 million in Medicaid and CHIP federal-share collections subject to the increased COVID-19 FMAP. The report contains refund and reconciliation recommendations, not an adjudicated settlement.
- resolution
- OIG audit recommendations, not a settlement or court judgment.
Operational lessons
- Assess documentation and allocation controls relevant to the organization. Distinguish disputed audit recommendations from an established refund obligation.
Sources
- OIG recommends South Carolina reconcile $108.6 million federal-share collectionsOfficial · HHS OIG · 2026-10-02 · Source review 2026-10-04
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