Minnesota will pay $3.1 million to the federal government after an audit found accounting errors in how the state Department of Human Services reported collections from overpayments in the Medicaid program.

Medicaid, a $10.6 billion program in Minnesota, is a health insurance and social service program that's jointly funded by the state and federal governments.

The program recovers overpayments in cases where Medicaid determines another third-party payer is responsible for costs initially covered by the program.

The federal government gets a share of such collections, but there were accounting errors in some cases from fiscal 2009 to fiscal 2013, according to an audit completed in May by the Office of the Inspector General (OIG) at the U.S. Department of Health and Human Services.

Auditors found the state underreported the federal share of overpayment collections by $2.8 million, and did not report collections of about $300,000.

"During the period of the five years that they looked at in this audit, we had about $333 million in collections that we reported to the federal government," said Chuck Johnson, deputy commissioner at the Department of Human Services (DHS). The sum, however, should have been about $336 million, Johnson said.

"Essentially, we mistakenly retained that $3 million in collections we had made, when it should have been sent back to the federal government," Johnson said.

The underreporting problems stemmed from an error by a new worker at DHS, wrote Lucinda Jesson, the state's human services commissioner, in an April 10 letter to OIG.

"We have more clearly documented this process from start to finish as well as established desk audit reviews in this area of reporting to ensure future problems do not exist," Jesson wrote.

Most of the $300,000 was related to business conducted before 2012, Jesson wrote, at which point the department improved its system for reporting collection tallies on overpayments.

Overpayments can occur in the portion of the Medicaid program that covers health care costs for those who live near or below the poverty line.

Twitter: @chrissnowbeck