PRESS RELEASE NO. 2019-01 from FSM Office of the National Public Auditor
The Office of the National Public Auditor (ONPA) announces the release of Audit Report No. 2019-01, a performance audit entitled MiCare Plan: Challenged by Oversight and Management Issues; New Team Optimistic About Future Prospects, which covered the fiscal years 2013 to 2017.
The Public Auditor’s authority as codified at Chapter 5, Title 55 of the FSM Code gave us the power to conduct this audit which focused on MiCare Plan’s administration, including oversight and monitoring arrangements for the health insurance plan.
The objectives of this audit included determining if (a) management and oversight systems provided adequate assurance that operational goals and objectives were achieved, and (b) MiCare Plan had implemented proper system for monitoring, reviewing and reporting including assessing priorities consistent with the aims and objectives of the health insurance plan.
Based on our audit, we concluded that the Board and Management exposed the MiCare Plan and took risks that had no corresponding internal controls to mitigate them. The risks in various processes were not mitigated by systems in place (internal controls) that should have been expected to adequately identify, measure, monitor, and most importantly, control the risks to an acceptable level. As a result, Board and Management did not adequately fulfill their responsibilities to ensure that the Plan operated in a safe and sound manner; the Plan’s overall financial condition improved rather than declining and incurring substantial financial losses; and depletion of the Plan’s capital leading to a need for a considerable capital infusion to survive. Specifically, our audit has disclosed the following weaknesses:
1. Inadequate corporate governance;
2. Inadequate annual budget linked to any strategic goals and objectives;
3. Lack of risk management policy and framework;
4. Lack of performance evaluation for the Administrator and Senior Management;
5. Lack of effective information and communication technology (ICT) controls;
6. Lack of performance results and measures to implement monitoring and reporting controls;
7. Lack of adequate internal policies to direct and guide the day-to-day operations;
8. Lack of code of ethics; and,
9. Lack of oversight and guidance to manage accounts receivable.
We offered numerous recommendations to remedy the issues and weaknesses in areas such as corporate governance, annual operational plan and budget, risk management, performance evaluation, information technology, performance monitoring and reporting, internal policies and procedures, code of ethics, and accounts receivable.
Management response to the findings and recommendations, which were mostly in agreement, is included in the final report for your perusal.
For more information please contact:
Office of the National Public Auditor
P.O Box PS-05
Palikir, Pohnpei FM 96941
Tel: 691.320.2862/2863; Fax 691.320.5842
Hotline:691.320.6768; Website: http://www.fsmopa.fm