Gratuities Provided to Officials Responsible for the Procurement of Michigan School-Based Medicaid Consulting Services

Pursuant to a congressional request, GAO discussed the circumstances surrounding the process used by a consortium of eight Michigan intermediate school districts to contract with Deloitte Consulting LLC for medicaid consulting services.

GAO noted that: (1) it determined that Deloitte had provided gratuities, including meals and tickets to professional sporting and theater events, to the school district officials responsible for awarding the contract consulting services; (2) records provided to GAO by Deloitte show that it spent over $170,000 for the gratuities from 1997 through 1999; (3) officials receiving the gratuities included members of the school district consortium's Medicaid Program Steering Committee and Contract negotiation Committee; (4) as a result of GAO's findings, is concerned that there is a potential violation of 18 U.S.C. section 66; (5) this statute prohibits, under certain circumstances, anything of value being paid to or accepted by an agent of an organization, or of a state, local, or Indian tribal government, or any agency thereof for the purpose of influencing a business transaction involving anything of value of $5,000 or more; and (6) GAO therefore has referred this matter to the U.S. Attorney's Office for the Western District of Michigan for further action.