Maryland Emergency Medical System Operations Fund: Audit Report
Maryland Emergency Medical System Operations Fund: Audit Report
February 2021
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February 19, 2021
Senator Clarence K. Lam, M.D., Senate Chair, Joint Audit and Evaluation Committee
Delegate Carol L. Krimm, House Chair, Joint Audit and Evaluation Committee
Members of Joint Audit and Evaluation Committee
Annapolis, Maryland
Our audit disclosed that COM did not ensure that agencies reverted unspent
MEMSOF funds resulting in the failure to identify one agency that did not revert
a total of $697,000 during fiscal years 2018 and 2019.
Respectfully submitted,
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Background Information
MEMSOF Revenues
MEMSOF Expenditures
State law provides that MEMSOF shall be used to provide funding for the
following five operations of Maryland’s Emergency Medical Services (EMS)
program (see Table 1 on page 5):
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appropriations (non-medically oriented). Based on our review of certain
MSPAC data, this allocation appears to be reasonable.
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Audit Coverage
The 2016 Joint Chairmen’s Report required OLA to perform a financial audit of
MEMSOF and expressed the intent of the General Assembly that MEMSOF be
added to the standard audit cycle. A letter from the Joint Chairmen, dated May 6,
2016, clarified the periodic audits should primarily focus on year-end closeout
transactions to ensure proper maintenance of the fund. As a result, our audit
focused on related closeout transactions for fiscal years 2017, 2018, and 2019 at
the five agencies using MEMSOF funds and GAD’s maintenance of the fund. In
addition, based on our assessment of materiality and risk, we performed certain
testing for MSPAC such as of the cost allocation of expenditures between
MEMSOF and the General Fund.
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Our audit did not include reviewing other aspects of these agencies including
procurement, disbursement, payroll, and cash receipts, which were subject to
audit during our fiscal compliance audits of the respective agencies. In addition,
the collection and disposition of surcharges by the MVA and Judiciary is subject
to audit as part of the respective audits of these agencies.
On September 23, 2019, we issued a fiscal compliance audit report on DSP which
included a finding (Finding 5) related to procurement of helicopter maintenance
services and aviation fuel. The audit found that DSP did not comply with State
procurement regulations when procuring helicopter maintenance services and
aviation fuel. Specifically, we noted that DSP did not consolidate the
procurements of helicopter maintenance services or obtain appropriate control
agency approvals. In addition, DSP purchased aviation fuel without conducting
competitive procurements, executing written agreements, and did not ensure
DSP’s exemption from federal and State excise taxes under applicable law was
applied. We recommended that DSP comply with State procurement regulations
when procuring helicopter maintenance services and aviation fuel.
During our current MEMSOF audit, DSP advised us that it was working on
implementing the recommendations. This finding, and eventual implementation
of the related recommendation, will be followed up during our next fiscal
compliance audit of DSP.
Finding 1
The General Accounting Division (GAD) did not ensure agencies reverted
unspent Maryland Emergency Medical System Operations Fund (MEMSOF)
funds resulting in the failure to identify one agency that did not revert funds
totaling $697,000 during fiscal years 2018 and 2019.
Analysis
GAD did not ensure agencies reverted unspent MEMSOF funds resulting in the
failure to identify one agency that did not revert funds totaling $697,000 during
fiscal years 2018 and 2019. Although GAD maintained records of the revenues
and expenditures at each agency allocated MEMSOF funds, GAD relied on the
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agencies to revert any unspent funds as part of the year-end closing process. Our
review of fund balances and related closing documents at the Maryland Institute
for Emergency Medical Services Systems (MIEMSS) and Maryland Department
of State Police – Aviation Command (MSPAC)1 for fiscal years 2018 and 2019
noted that collectively $697,000 had not been used by MIEMSS ($298,000 for
fiscal year 2018 and $399,000 for fiscal year 2019).
MIEMSS reported to GAD that the funds were retained and indicated that it had
the legal authority to retain the funds. GAD did not verify MIEMSS’ assertions
and therefore, did not identify that MIEMSS in fact did not have the statutory
authority to retain the funds. After our inquiring about the status of the reversion
of unspent funds in August 2020, MIEMSS reverted $1.3 million to MEMSOF,
which included the fiscal years 2018 and 2019 amounts noted above and unspent
funds from 2020.
Recommendation 1
We recommend that GAD work, in conjunction with MIEMSS and other
entities receiving MEMSOF funds, to ensure all unused MEMSOF funds are
reverted timely, when required by State law.
1
The remaining three agencies were not tested as they did not need to revert any unspent funds
either because State law authorizes the agency to retain the funds or the agency had fully
expended all MEMSOF funds by year-end. Based on our review, unspent funds for MSPAC
had been reverted as required.
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Audit Scope, Objectives, and Methodology
We have conducted a fiscal compliance audit of the Maryland Emergency
Medical System Operations Fund (MEMSOF) for the period beginning July 1,
2016 and ending March 31, 2020. Funds are collected by two agencies, the Motor
Vehicle Administration and the Judiciary, and funds are used by the following
five agencies:
The Senator William H. Amoss Fire, Rescue, and Ambulance Fund was subject to
audit within our Military Department audit report issued June 10, 2020. Our audit
procedures during the Military Department audit included inquiries of appropriate
personnel, inspection of documents and records, tests of transactions, and
observations of the respective agencies operations.
Our assessment of internal controls was based on agency procedures and controls
in place at the time of our fieldwork. Our tests of transactions and other auditing
procedures were generally focused on the transactions occurring during our audit
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period of July 1, 2016 to March 31, 2020, but may include transactions before or
after this period as we considered necessary to achieve our audit objectives.
We also performed various data extracts of pertinent information from the State’s
Financial Management Information System (such as revenue and expenditure
data). The extracts are performed as part of ongoing internal processes
established by the Office of Legislative Audits and were subject to various tests to
determine data reliability. We performed various tests of the relevant data and
determined that the data were sufficiently reliable for the purposes the data were
used during the audit. Finally, we performed other auditing procedures that we
considered necessary to achieve our objectives. The reliability of data used in this
report for background or informational purposes was not assessed.
Our reports are designed to assist the Maryland General Assembly in exercising
its legislative oversight function and to provide constructive recommendations for
improving State operations. As a result, our reports generally do not address
activities we reviewed that are functioning properly.
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This report includes a finding relating to conditions that we consider to be
significant deficiencies in the design or operation of internal control that could
adversely affect the agency’s ability to maintain reliable financial records, operate
effectively and efficiently, and/or comply with applicable laws, rules, and
regulations. This finding is also a significant instance of noncompliance with
applicable laws, rules, or regulations. Another less significant finding was
communicated to the applicable agency that did not warrant inclusion in this
report.
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APPENDIX
Peter Franchot
Comptroller
Sharonne R. Bonardi
Deputy Comptroller
Enclosed is the Comptroller’s response to your report on the Maryland Emergency Medical System
Operations Fund (MEMSOF) for the period beginning July 1, 2016 and ending March 31, 2020.
We have carefully reviewed the finding, and we believe that our response fully addresses the
recommendation contained in the report. Should you need additional information or clarification,
please contact Lindsay Welsh, External Audit Manager, Office of Risk Management by email at
[email protected] or by telephone at 410-260-6156.
The Comptroller appreciates your objective appraisal of our operations and your recommendations
for continuous improvement and commends your auditors for their professionalism and thorough
review.
Sincerely,
Sharonne R. Bonardi
Deputy Comptroller
Sandra L. Zinck
Director, General Accounting
Louis L. Goldstein Treasury Building • 80 Calvert Street • P.O. Box 466 • Annapolis, Maryland 21404-0466 • 410-260-7806
MRS 711 (MD) or 1-800-735-2258 • TTY 410-260-7157 • [email protected]
Comptroller’s General Accounting Division
July 1, 2016 to March 31, 2020
Comptroller’s General Accounting Division
July 1, 2016 to March 31, 2020
Finding 1
The General Accounting Division (GAD) did not ensure agencies reverted unspent
Maryland Emergency Medical System Operations Fund (MEMSOF) funds resulting in the
failure to identify one agency that did not revert funds totaling $697,000 during fiscal years
2018 and 2019.
Recommendation 1
We recommend that GAD work in conjunction with MIEMSS and other entities receiving
MEMSOF funds to ensure all unused MEMSOF funds are reverted timely, when required
by State law.
Agency Response
Background / Factually Accurate
Analysis
Please explain any
concerns with factual It is GAD’s position that by following its long-standing accepted
accuracy. practices, it was meeting the statutory definition for administering the
MEMSOF funds. However, GAD accepts OLA’s recommendation that it
will in collaboration with the agencies ensure that all unused MEMSOF
funds are reverted timely. To comply with this recommendation, GAD
has the following comments in support of its position:
AUDIT TEAM
Catherine M. Clarke, CPA, CIA, CFE
Audit Manager
Sporthi J. Carnelio
Gary B. Staples
Staff Auditors