Raleigh, N.C. — Lawmakers say state health officials may be tampering with audits ordered as part of the state budget by calling for a separate review of the state's Medicaid spending.

Medicaid and related health programs are second only to education spending as a portion of the state budget. Cost overruns have plagued the state over the past decade.

As part of the budget that passed in June, the General Assembly ordered the state auditor to review the costs and potential savings associated with providing health care to the poor and disabled.

Soon after the legislative session concluded, the Department of Health and Human Services asked for private companies to bid on a review of the department's costs as they compare with other states.

"What we are looking for is very specialized, external information," Mike Watson, director of the Division of Medical Assistance, told the Joint Legislative Oversight Committee on Health and Human Services Tuesday.

The information gathered by the department's contractor would be much more detailed than the state auditor's report and compare what North Carolina does against other states, Watson said.

However, State Auditor Beth Wood told committee members the two projects would be very similar. She provided a comparison between the legislative directive and the DHHS' proposal request that showed the two projects would work on similar timelines and seek similar information.

"We have a concern we may not get all the information their vendor gets," Wood said, adding that her staff would be competing with the vendor for time and attention. 

Watson said the department could furnish information to both projects without a problem.

"This is in no way intended to delay ... the state audit," Watson said.

But lawmakers were skeptical.

Rep. Justin Burr, R-Stanly, asked Watson why the agency-requested review was necessary and "why you conveniently picked all the same dates as the auditor." To some, he said, it looked as if the department was trying to counteract any negative conclusion from the state auditor's work.

Watson said it wasn't the department's intention to try to gain a rhetorical upper hand, and he told legislators the agency-requested review had been discussed for months. That said, Watson promised to tell Secretary Al Delia that lawmakers were unhappy with what they suspected might be more a politically-motivated move.

When the legislature is out of session, it cannot order an executive agency to do or not do something. But lawmakers made it clear they were unhappy.

"There may be no delays and there may be no agenda," said Sen. Tommy Tucker, R-Union. "But it looks to me that, if there are parallel audits going on, there may be problems."