Medical Services Administration (MSA), an agency of the State of Alabama, filed a petition for review challenging a final Department of Health, Education and Welfare administrative determination to deduct $20,045 from federal funds to be paid Alabama for use in its Medicaid program.1 HEW's decision to deduct was the result of an audit report which determined that there was a two month time lag between the time ineligibility for Medicaid was determined and the time this information was communicated to Alabama's fiscal agents responsible for processing Medicaid claims. This time lag resulted in a small percentage of the ineligible persons receiving Medicaid benefits totaling $20,045. MSA, after attaining only minor adjustments in an administrative reconsideration procedure, now seeks judicial review of HEW's decision.

The threshold issue is one of jurisdiction. It centers around how we categorize the $20,045 deduction. If we determine the deduction to be a "disallowance" of a reimbursement for certain MSA expenditures, then MSA had the right to an administrative reconsideration. However, they would have no right to a judicial review of the administrative reconsideration in this Court, and we would be required to dismiss for lack of jurisdiction. In making such a determination we need not decide the availability of review in the district court. Compare State Dept. of Public Welfare v. Califano, 556 F.2d 326, 329 (5th Cir. 1977), Cert. denied, --- U.S. ----, 99 S. Ct. 78, 58 L. Ed. 2d 108 (1978) (dictum) with County of Alameda v. Weinberger, 520 F.2d 344 (9th Cir. 1975) and State of Georgia v. Califano, 446 F. Supp. 404 (N.D.Ga.1977).

HEW argues that the disallowance procedure is designed to operate in connection with a routine audit of specific claims submitted by the state to HEW for reimbursement.2 They contend therefore, where the crux of the matter concerns the accuracy of an audit, as here, then the deduction is to be considered a "disallowance." We agree. The record shows that basically this case concerns an audit dispute. While it may not be easy in some cases to determine whether a particular dispute involves a disallowance, compare, e. g., State Dept. of Public Welfare v. Califano, supra, there is no difficulty in the instant case. The decision to deny Alabama $20,045 in federal funds represented an isolated and highly focused inquiry into Alabama's ability to keep its eligibility lists current and the payment of benefits to ineligibles resulting from its failure to do so. There is no dispute between MSA and HEW as to the definition of eligibility under the Alabama plan (see, State of Georgia v. Califano, 446 F. Supp. 404, 413 (N.D.Ga.1977)). The dispute, rather, concerns the success with which payments were restricted to those eligible under the plan. Furthermore, MSA turned to the argument that the deduction was actually the result of noncompliance or a plan nonconformity only after spending approximately seven years debating the accuracy of an audit and finding that HEW's administrative reconsideration of the disallowance had proved fruitless.

In light of the forementioned facts, we conclude that the instant case involves a disallowance dispute and we therefore DISMISS for lack of jurisdiction.

DISMISSED.