State agency found to be slow cashing checks

Updated: October 12, 2006 - 11:55 PM

The state's pharmacy contracting alliance collects fees for getting large-scale buyers and sellers of prescription drugs together.

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Thousands of dollars in checks paid to the state government lay undeposited, sometimes for months, in a pharmaceutical purchasing program of the state Department of Administration, a new legislative audit has found.

Seven checks totaling $17,898 received in 2005 were not deposited until May 1 of this year, the auditors reported. Two other checks for a combined $647,608 were held for shorter periods, but still in violation of state law requiring daily deposits of any receipts of $250 or more.

The delays increased the risk of loss or theft of the checks as well as forfeiting potential investment earnings on the money, the auditors said.

Department officials said personnel changes and other corrective steps have ensured timely deposits since May.

According to the audit, issued Thursday, the late deposits were among several shortcomings in a program that provides discount drugs to health-care facilities and collects fees from manufacturers.

Poor tracking of drug sales in the Minnesota Multi-State Contracting Alliance for Pharmacy program makes it difficult to determine whether purchasers are getting proper rebates, auditors concluded.

The alliance, established in 1985, involves 42 states and the city of Chicago. Health-care facilities pay fees to buy drugs and services at discounted contract prices from 150 manufacturers and other vendors, who also pay fees to tap into a large and steady base of buyers.

The audit found inconsistencies between the sales records of manufacturers and distributors, which threw off fee calculations. One manufacturer paid $58,000 less than it owed, the audit found.

CONRAD DEFIEBRE

The Associated Press contributed to this report.