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OLR Bill Analysis
HB 7105
AN ACT CONCERNING FORENSIC AUDITS CONDUCTED BY THE
DEPARTMENT OF SOCIAL SERVICES.
SUMMARY
This bill explicitly allows the Department of Social Services (DSS)
commissioner to conduct forensic audits of certain facilities and outlines
procedures for doing so. The bill requires facilities to assist with forensic
audits and subjects them to a civil monetary penalty for failing to do so.
In certain situations, the bill holds facilities liable for the costs of forensic
audits and allows DSS to withhold Medicaid funds to recoup these costs
along with the civil penalties. Under the bill, “forensic audit” means an
examination of financial records for information or evidence used to
determine compliance with applicable law.
The bill also makes a technical and conforming change.
EFFECTIVE DATE: Upon passage
AUTHORIZATION TO CON DUCT FORENSIC AUDITS
Under the bill, the DSS commissioner may conduct a forensic audit
of licensed chronic and convalescent nursing homes and their associated
chronic disease hospitals, rest homes with nursing supervision, licensed
residential care homes, and Medicaid-certified intermediate care
residential facilities for people with intellectual disabilities. The bill
requires the commissioner, before conducting a forensic audit of any
facility, to (1) give the facility an opportunity to meet with DSS
representatives and respond to any of the commissioner’s financial
concerns and (2) make a good faith determination that a forensic audit
is necessary to evaluate these financial concerns.
FACILITIES’ REQUIRED COOPERATION
The bill requires a facility that receives a written request from DSS to 2025HB-07105-R000468-BA.DOCX
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cooperate with a forensic audit and give the department any assistance
it requests within 10 business days. A facility generally must ensure that
all personnel, financial consultants, and accountants fully cooperate and
assist with the forensic audit, but is not required to divert personnel
from residential care duties and responsibilities to do so.
Penalties
The bill subjects any facility that fails to cooperate with a forensic
audit to a civil penalty of up to $1,000 per business day that it does not
give DSS the assistance it requested in writing. The bill allows DSS to
withhold Medicaid funds from a facility to recoup these penalties.
Under the bill, a facility may request a fair hearing on any penalty
assessed.
FORENSIC AUDIT COSTS
Under the bill, a facility DSS identifies as experiencing a serious
financial loss may be liable to the department for the costs of a forensic
audit, including any reports or related testimony, of up to $100,000.
These costs may be assessed against any single facility or in the
aggregate if more than one facility is subject to a single forensic audit.
The bill allows DSS to recover costs of a forensic audit if, through the
forensic audit, DSS identifies material issues with the (1) facility’s
internal financial management or (2) integrity of the facility’s financial
statements. It lets DSS withhold a facility’s Medicaid funds to recoup
these costs.
COMMITTEE ACTION
Human Services Committee
Joint Favorable
Yea 15 Nay 7 (03/18/2025)