The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN
FRANK J. KELLEY, ATTORNEY GENERAL
Department of Community Health authority to audit county health department records
Section 2481 of the Public Health Code, 1978 PA 368, MCL 333.2481; MSA 14.15(2481), authorizes the Michigan Department of Community Health to conduct performance audits and fiscal audits of county health department records.
Opinion No. 6949
August 8, 1997
Honorable Patricia Godchaux
Lansing, MI 48913
You have asked whether section 2481 of the Public Health Code, 1978 PA 368, MCL 333.2481; MSA 14.15(2481), authorizes the Michigan Department of Community Health (DCH) to conduct performance audits and fiscal audits of county health department records.
Section 2481 provides as follows:
As a condition for the approval of funding for a service under sections 2471 to 2498, a local health department shall:
(a) Provide the required health services which the local health department is designated to provide in substantial accord with the program plan developed under part 23 and rules promulgated under section 2495, including standards as to the scope and quality of services.
(b) Report its performance and fiscal matters in a form and containing information the department reasonably requires to implement sections 2471 to 2498.
(c) Keep records and afford access to the records by authorized state, federal, and local officials for audit and review purposes necessary to verify and assure the accuracy and acceptability of the reports.
Part 24 of the Public Health Code, which includes section 2481, established an entirely new arrangement for state funding of local health departments, conditioned, however, upon local department accountability as to the use of such funding. For example, the DCH shall reimburse local health departments for the reasonable and allowable costs of required health services delivered by the local department. Section 2475(1). The DCH shall prescribe criteria for determining reasonable and allowable costs for required and allowable services. Section 2479. A local health department must report to the DCH at least annually on its activities. Section 2431(2). Local departments desiring state reimbursement shall annually submit to the DCH a program statement defining services, plus a budget reflecting the program statement. After reviewing these records, the DCH shall determine the services eligible for reimbursement. Section 2483. Local departments shall be reimbursed on the basis of their approved program performance reports (as required by sections 2481, 2483, and 2484) and on the basis of their prescribed fiscal reports reflecting costs. Section 2484. It is in this context that section 2481 requires that local health departments, as a condition for funding approval, report their performance and fiscal information to the DCH and make available their supporting records for audit and review purposes.
The goal of statutory construction is to discover and effectuate legislative intent. This goal may be achieved by examining both the language of a statute and its legislative history, including legislative bill analyses. In re Forfeiture of $5,264, 432 Mich 242, 248-258; 439 NW2d 246 (1989).
Under section 2481, local health departments must report both their performance and their fiscal matters on forms required by the DCH. In addition, local departments must maintain and make available to the DCH records necessary to verify and assure the accuracy and acceptability of their performance and fiscal reports. This system provides funding to local departments in exchange for authorizing the DCH to monitor their use of such funds. A legislative analysis of House Bill 4070, which became 1978 PA 368, supports this interpretation:
The bill would restructure state-local relations with respect to the provision and funding of public health services. The arrangement envisioned by the bill would give local units sufficient independence to serve the particular needs of their residents, while enabling the state to ensure that, on a statewide basis, the needs of the people are being satisfied. The funding of services provided by local units would also be revised, with an extensive cost-sharing program scheduled to be phased in over a 4-year period beginning 2 years after enactment of the Code.
House Legislative Analysis, HB 4070, March 21, 1977 (emphasis added).
It is my opinion, therefore, that section 2481 of the Public Health Code, 1978 PA 368, MCL 333.2481; MSA 14.15(2481), authorizes the Michigan Department of Community Health to conduct performance audits and fiscal audits of county health department records.
FRANK J. KELLEY
STATE OF MICHIGAN