|(a) A political subdivision or agency of this state
may dispute information submitted by another political subdivision.
A dispute shall be initiated by filing written notice with the department
of the issue(s) disputed.
(b) A dispute may concern a political subdivision's
calculation of unreimbursed expenditures, not whether a political
subdivision is entitled to a share of the annual distribution.
(c) A dispute must be filed by December 31 of the year
in which the disputed information was submitted.
(d) An audit of the political subdivision that submitted
the disputed information may be performed.
(1) The audit shall be initiated by the department
or the comptroller. The department or the comptroller shall choose
the auditor which may be the department, the comptroller, an outside
auditor, or another state agency.
(2) The political subdivision shall fully cooperate
in the audit. The audit may include a review of any audit or financial
statement of the political subdivision.
(e) The filing of a dispute will not affect the percentage
of the annual distribution to be paid to the political subdivision
for the year for which the information that is the subject of the
dispute was submitted.
(f) A political subdivision for which an audit indicates
an overstatement may request in writing a hearing on the matter within
20 days of receiving written notice from the department of the audit
findings. The notice shall state whether a monetary penalty is proposed.
A monetary penalty may not exceed 10% of the overstated unreimbursed
health care costs. A monetary penalty may be imposed if the political
subdivision failed to exercise reasonable diligence to comply with
the requirements of these rules.
(g) If a hearing is requested, the hearing shall be
a contested case under the Administrative Procedure Act, Government
Code, Chapter 2001, and the department's formal hearing rules in Chapter
1 of this title (relating to Miscellaneous Provisions). If the department
elects to impose a monetary penalty, the hearings officer shall consider
from the parties evidence regarding, and issue findings of fact and
conclusions of law about, whether the political subdivision failed
to exercise reasonable diligence to comply with the requirements of
(h) If a political subdivision fails to timely request
a hearing or to appear at a scheduled hearing, the findings of the
audit and any penalty amount shall be considered final and reported
to the comptroller.
(i) If after a hearing the department's hearing examiner,
on behalf of the Executive Commissioner of the Health and Human Services
Commission, finds an overstatement, the findings shall be considered
final and reported to the comptroller. This section delegates to the
hearing examiner authority to make findings under this section.
(j) The costs of the audit shall be paid by the party
to the dispute (the entity which originally invoked the dispute process
or the political subdivision on which the audit was performed) which
does not prevail in the dispute.
(k) After a final decision following an audit and the
opportunity for a hearing, if a political subdivision has overstated
unreimbursed health care expenditures in the information submitted
for any year, the department shall report that fact to the comptroller
and shall reduce that political subdivision's percentage of the subsequent
annual distribution appropriately.
(l) If a monetary penalty is applied, the department
shall also reduce the political subdivision's percentage of the subsequent
annual distribution appropriately.
(m) If a political subdivision is assessed the cost
of an audit, the department shall report the amount assessed to the
comptroller, and the comptroller may withhold that amount from the
political subdivision's subsequent annual distribution. The comptroller
may use the amount withheld to reimburse the general revenue fund
for the cost of the audit.
|Source Note: The provisions of this §102.5 adopted to be effective February 3, 2000, 25 TexReg 579; amended to be effective November 20, 2003, 28 TexReg 10225; amended to be effective December 30, 2007, 32 TexReg 9631; amended to be effective October 7, 2012, 37 TexReg 7752