(a) If, after affording the provider the opportunity for a closing conference and after consideration of any additional documentation and information presented in connection therewith, the executive director or the contractor believes that overpayments have been made to the provider, a draft audit report shall be issued.

(b) The draft audit report shall contain a clear statement of the action to be taken. The items disallowed and the amount of the overpayments shall afford the provider the opportunity to object to the proposed action within 30 days and shall advise the provider that failure to object within the time provided may result in the adoption of the proposed action as the final action.

(c) The report shall be accompanied by a document identifying the person to whom objections to the report should be mailed. The provider's objections to the draft audit report must be mailed by the provider to that person within 30 days of the report. It shall include a statement detailing the specific items of the draft report to which the provider objects, and provide any additional material or documentation which the provider wishes to be considered in support of the objections.