Wayne County Juvenile Assessment Center Audit 2004

Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit Report December 1999 – December 2003 SUMMARY AND ASSESSMENT OF CORRECTIVE ACTION PLAN

No.

Auditor General Recommendation

1.

The JAC charge the applicable rate authorized for a service only in accordance with their contract approved by the County Commission.

2.

The Department of Children and Family Services determine the amount of over-payments paid to the JAC that should be recovered, then establish a repayment plan to recoup the over-paid amounts.

Management’s Comments on Findings and Recommendation

Agree with recommendation

Management’s Action Taken or Planned

The Juvenile Agency Information System has been revised to include rates and services in accordance with the approved contract. The Juvenile Assessment Center (JAC) has also established billing procedures that occur prior to the submission of the monthly bill comparing billed services to eligible rates, service names, and any previously billed services. The JAC also compares the monthly invoices to a roll up report provided by the DCFS to ensure there are no duplications from prior invoices.

Management has or Intends to Implement the Recommendation Yes/No

Yes

Responsible Person/Area

M&B Finance Director – DCFS and Executive Director, JAC

Implementation or Targeted Implementation Date

April 2005

Auditor General’s Assessment

The Office of Legislative Auditor General reviewed the applicable revised policies and procedures. If the policies and procedures are fully implemented as described, the actions taken may be sufficient to address the recommendation.

This recommendation is included and fully addressed in the OAG’s Corrective Action Plan report for the Department of Children and Family Services, Juvenile Services Division, Controls Over Service Provider Contracts operational audit, dated February 9, 2006, DAP No. 2003-57-017(A).

Office of the Wayne County Legislative Auditor General DAP No. 2004-57-003(C)

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Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit Report December 1999 – December 2003 SUMMARY AND ASSESSMENT OF CORRECTIVE ACTION PLAN

No.

Auditor General Recommendation

Management’s Comments on Findings and Recommendation

3.

The Department of Children and Family Services revise the vendor invoice review process to include adequate review procedures to ensure that proper rates are billed and approved.

Agrees with recommendation

4.

The JAC obtain documentation for each service rendered and billed, and maintain it in the youth’s case file.

The JAC agrees with recommendation, with clarification. The DCFS agrees with the recommendation.

Office of the Wayne County Legislative Auditor General DAP No. 2004-57-003(C)

Management’s Action Taken or Planned

The finance area in the DCFS has been restructured. In December 2004, a finance director was assigned to the department. However, the finance director and staff report to the Department of Management & Budget. Monthly invoices are verified by a finance analyst and subsequently reviewed and approved by the finance director. In addition, major improvements have been made in the JAIS system that facilitates the department’s ability to monitor and analyze the invoices. JAC management stated that the JAIS database and not the youth’s file is where all youth service records should be stored. The JAC has also established a process to review all billable JAC services in conjunction with the JAIS database record of the services provided. The DCFS subsequently designated the JAIS system as the location to record youth services performed. As a result, the department’s Juvenile Justice Services Handbook was modified to reflect that all AOD screen report records must be entered into JAIS by the JAC. The handbook no longer requires the record to be included within a youth’s case file.

Management has or Intends to Implement the Recommendation Yes/No

Responsible Person/Area

Implementation or Targeted Implementation Date

Auditor General’s Assessment

Yes

M&B Finance Director DCFS

October 2004

If adequate managerial review procedures are implemented and functioning as described, they may be sufficient to address the recommendation.

Yes

Director, DCFS and M&B Finance Director DCFS

April 2005

If actions taken by management are fully implemented and functioning as described, they may be sufficient address the recommendation.

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Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit Report December 1999 – December 2003 SUMMARY AND ASSESSMENT OF CORRECTIVE ACTION PLAN

No.

Auditor General Recommendation

Management’s Comments on Findings and Recommendation

Management’s Action Taken or Planned

Management has or Intends to Implement the Recommendation Yes/No

Responsible Person/Area

Implementation or Targeted Implementation Date

Auditor General’s Assessment

5.

The JAC annually forward to the DCFS and the Division of Risk Management insurance binders documenting that required coverages are obtained and in-force.

Agrees with recommendation

The JAC has complied with this provision. In addition, the JAC finance director is responsible for providing proof of required insurance coverage upon each policy’s renewal. The Department of Children and Family Services has met with Risk Management and both have agreed that Risk Management will assume responsibility for ensuring that appropriate insurance coverage and certificates are maintained. However, in the meantime, the department has set up an insurance file and requested insurance documentation from the Juvenile Assessment Center.

Yes

Finance Director, JAC

April 2005

If actions taken by management are fully implemented and functioning as described, they may be sufficient to adequately address the recommendation.

6.

The JAC determine which present employees have not had a background check performed by the Michigan State Police and ensure they are conducted and if necessary take appropriate action against employees if background checks warrant.

Agrees with recommendation

According to the JAC, all current employees had background checks. In addition, since 2002 all JAC employees have a record of background checks in their personnel files. All employees that the Office of Legislative Auditor General identified as not having a background check in their file are no longer employed by the Juvenile Assessment Center.

Yes

Human Resource Director, JAC

April 2002

If actions taken by management are fully implemented and functioning as described, they may be sufficient to address the recommendation.

Office of the Wayne County Legislative Auditor General DAP No. 2004-57-003(C)

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Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit Report December 1999 – December 2003 SUMMARY AND ASSESSMENT OF CORRECTIVE ACTION PLAN

No.

Auditor General Recommendation

Management’s Comments on Findings and Recommendation

Management’s Action Taken or Planned

Management has or Intends to Implement the Recommendation Yes/No

Responsible Person/Area

Implementation or Targeted Implementation Date

Auditor General’s Assessment

7.

The JAC establish and implement a policy to ensure all new hires receive background checks conducted by the Michigan State Police prior to their start date.

Agrees with recommendation

In a few instances, the JAC had background checks performed by the city of Detroit. The JAC now has a policy in place to ensure that background checks are conducted by the Michigan State Police. In addition, since 2002 all JAC employees have a record of background checks in their personnel files.

Yes

Human Resource Director, JAC

April 2005

If actions taken by management are fully implemented and functioning as described, they may be sufficient to address the recommendation.

8.

The JAC determine the deficiencies in the controls in the billing preparation process, modify where necessary, and then implement the enhanced control procedures.

Agrees with recommendation

Both the JAC and the DCFS have instituted manual and automated controls and safeguards to improve the JAC billing process. Additional procedures established include the recording of billable services in both the JAIS system and the JAC accounting database. Prior to submitting the invoices, each billable service is crossreferenced to prior billings to ensure the accuracy of the client number and service date. In addition, system controls have been implemented that prevents invoicing for the same item more than once.

Yes

Finance Director, JAC

April 2005

If actions taken by management are fully implemented and functioning as described, they may be sufficient to address the recommendation.

Office of the Wayne County Legislative Auditor General DAP No. 2004-57-003(C)

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Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit Report December 1999 – December 2003 SUMMARY AND ASSESSMENT OF CORRECTIVE ACTION PLAN

No.

9.

Auditor General Recommendation

The Department of Children and Family Services implement the planned preventive and detective controls for the JAIS system.

Management’s Comments on Findings and Recommendation

Agrees with recommendation

Office of the Wayne County Legislative Auditor General DAP No. 2004-57-003(C)

Management’s Action Taken or Planned

The department has implemented many preventive and detective controls within the JAIS system. Specifically, JAC service units have been modified to eliminate inconsistency in services, once the department authorizes a service; the service is locked within the system. This will prevent double billing.

Management has or Intends to Implement the Recommendation Yes/No

Yes

Responsible Person/Area

Director, DCFS and M&B Finance Director DCFS.

Implementation or Targeted Implementation Date

July 2005

Auditor General’s Assessment

If actions taken by management are fully implemented and functioning as described, they may be sufficient to address the recommendation.

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APPENDIX Corrective Action Plan Juvenile Assessment Center and Wayne County Department of Children and Family Services Contract Compliance Audit DAP No. 2003-57-003(C)

Please find below the joint response of the Wayne County Department of Children and Family Services (WCCAFS) and the Juvenile Assessment Center (JAC) to the restatement prepared by the Office of the Auditor General of the recommendations contained in the Wayne County Department of Children and Family Services Juvenile Services Division Juvenile Assessment Center Contract Compliance Audit dated November 22, 2004.

Recommendation #1 To ensure the Juvenile Assessment Center charges the correct rate for services billed, we recommend the JAC: Charge the applicable rate authorized for a service only in accordance with their contract approved by the County Commission. The WCCAFS JAIS data system has been revised by WCCAFS for the purpose of matching exactly the service names in the Wayne County JAIS database used to invoice for the contracted service names and rates in the County Commission approved contract. This reduces the potential for error or miscommunication regarding a specific service in the JAC billing procedure. Unlike previous contracts, the current Wayne County JAC Contract has effective begin and end dates defined in the contract thus better ensuring a match of eligible contract dates, the contract names for services and the contract amount eligible for each service reimbursement. The JAC has established written financial billing review steps for an in-depth internal billing review that occurs prior to submission of each monthly JAC bill that compares all billed services with eligible rates, service names and with any previously billed JAC invoices. WCCAFS now maintains a monthly and fiscal year to date roll up report. A copy of the roll up report is provided to the JAC. The WCCAFS roll up report provides documentation to the JAC that WCCAFS has approved the bills submitted by the JAC as eligible for payment. As a final step in quality assurance, the JAC matches the new JAC invoice to the WCCAFS roll up report to be certain there are no duplications.

Recommendation #2 We recommend the Department of Children and Family Services: Determine the amount of over-payments paid to the JAC that should be recovered, then establish a repayment plan to recoup the over-paid amounts. The Juvenile Assessment Center (JAC) received payments of $529,214 in excess of what the contract allowed for on-site screens/alcohol and other drug (AOD) pick ups through February 2004. The Department and the JAC acknowledged the majority of the overpayment and in July 2004 the JAC reimbursed the county $358,854. At the time of the Audit, the Department acknowledged that the Contract Managers misinterpreted the contract’s language in this area. We also acknowledged that the payments were not tied to a specific child in the Juvenile Agency Information System (JAIS) making this area prone to error. In our professional opinion, the County cannot hold the JAC responsible for the remaining $170,360. This error can be traced to the newness of the system and the initial flaws that have now been corrected.

It should be noted that the Department has continued to refine the services provided by the JAC (and all other entities involved in the county’s juvenile justice program). In FY-2005/06 these refinements will result in a savings of over $900,000. The County issued an RFP (April 2005) seeking an independent review of the operations of the JAC. Plante Moran, in partnership with Alan C. Young and Associates, were the sole bidders and will begin their review momentarily. Findings from this review will guide the development of the Scope of Services for the assessment RFP currently being developed.

Recommendation #3 The Department of Children and Family Services: Revise the vendor invoice and review process to include adequate review procedure to ensure that proper rates are billed and approved. The finance area of the department has been restructured. In September 2004 the Department of Management and Budget installed a member of their staff as director of the CAFS finance division. In December 2004 a permanent director (also a member of M & B) was assigned to the department. All current CAFS finance staff report to this individual, as does the department’s contract staff. In FY 2006/07 this staff will be re-aligned and become M & B employees. Monthly invoices are verified by a Finance Department Analyst and subsequently reviewed and approved by the department’s Director of Finance. Currently no transactions are processed for payment without the Director of Finance’s signed approval. This issue is also addressed in the new contracts. In addition major improvements have been made in the Juvenile Agency Information System (JAIS) that facilitate the department’s ability to monitor and analyze required performance, for example, the number of service codes have been dramatically reduced and can now be easily matched with the invoices. In addition, the department’s executive and finance staff host monthly meetings with CMS and JAC executives to ensure that financial and programmatic issues are addressed expeditiously.

Recommendation #4 To ensure the JAC complies with other major contract provisions, we recommend the JAC: Obtain documentation for each service rendered and billed, and maintain it in the youth’s case file. It is not practical or in some case even possible to maintain all of the information relating to a youth in treatment in their individual case files. The JAIS system is the Wayne County data system. It is this system that WCCAFS requires the JAC to use. The JAIS database and not the youth’s file is the location of the record of both the contracted service provision documentation and verification of the JAC’s invoice. The JAC has established a process to review all billable JAC services in conjunction with the JAIS data base record of the services provided. Services that require narrative or clinical documentation are maintained in the youth’s case file.

JAC services that have or are numerical summaries or specialized codes are maintained only in the JAIS database. In addition other items that reside only in the JAIS database include AOD screen lab results, psychological evaluation scores and Care Management Track entries and reviews. AOD lab results are numerous and are recorded and maintained only in the JAIS database. The JAC data entry staff matches cup numbers supplied by the Lab, used by the JAC for AOD screens, and then this information is entered into the JAIS database. This information is then printed in a multiple list format and due to the multiple clients on each printed page are not in each youth’s case file. The JAIS AOD data can be matched to lab cup numbers in both the Lab’s computer and in the JAIS database to confirm the accuracy of the information and to prove that the tests were completed. The Care Management Track for each youth contains each event of utilization in the youth’s treatment path. The number of these events is huge and consequently they are only recorded and maintained in the JAIS database. Each CMS is paid based upon these Care Management Track records. The JAIS system has an audit function that maintains a record of each individual who makes an entry together with the contents of that entry for each youth in treatment. This information is retained in the JAIS database and is available at any time to verify the accuracy of the Care Management Track record for each youth in care.

Recommendation #5 The JAC: Annually forward insurance binders documenting that required coverages are obtained and in-force to the department and the Division of Risk Management. The JAC has provided all documentation of all insurance coverages required by the Wayne County contract to WCCAFS by delivery of that information to the Division of Risk Management. The JAC Finance Director has been given the task of providing to the Division of Risk Management proof of the required coverages upon each policy renewal. Under the reengineered county contracting process Risk Management establishes insurance requirements prior to the release of any RFP or contract. Further, Risk Management is responsible for ensuring that appropriate insurance coverage and certificates are maintained.

Recommendation #6 and #7 The JAC: Determine which present employees have not had a background check performed by the Michigan State Police and ensure they are conducted and if necessary take appropriate action against employees if background checks warrant. The JAC: Establish and implement a policy to ensure all new hires receive background checks conducted by the Michigan State Police prior to their state date. All current employees have background checks and as noted in the JAC response to OAG in November of 2004, it was confirmed by the JAC that since 2002 all JAC employees have a record of background checks in their personnel file.

Recommendation #8

To strengthen and enhance controls over the billing process, we recommend the JAC: Determine the deficiencies in the controls in the billing preparation process, modify where necessary, then implement the enhanced control procedures. Multiple tiers of manual and automated controls and safeguards have been designed and implemented to correct to improve the JAC invoice process, as outlined below. Two primary deficiencies in the control of the JAC billing process were identified by the JAC. The first was that the use of the Wayne County JAIS database, which is required by WCCAFS, contained flaws that were unknown to both the JAC and WCCAFS. The discovery of these flaws in the JAIS database that included errors in client names resulting in duplicate billing led the JAC to create a Quality Assurance review process with written billing procedures that must now be complied with prior to submission of the JAC invoice each month. Billable JAC services are recorded in JAIS. When the service is completed it is also recorded in the JAC accounting database. Thus, the service is recorded in separate and distinct databases. Prior to submission of the JAC Invoice to WCCAFS, each JAC service unit is cross referenced with previous submissions in the JAC Accounting data base and with the JAIS service entry documentation to validate and assure accuracy of JAC service documentation, the correct client registration match, service date match and possibility of duplication and/or policy discrepancy before the JAC Invoice is completed and submitted. Further, as noted in Response #1, WCCAFS has revised the JAIS system to also correct this deficiency. The second deficiency of the JAC was not obtaining a copy of the monthly invoice review as performed by WCCAFS. The institution of the WCCAFS monthly roll up report provides the verification to the JAC of WCCAFS review of submitted invoices and the rejection or acceptance of each service unit. Further, in development with the plan being no check box, but the system will not allow same services for same youth to be repeated and prevents invoicing for the same item more than one time. This check box system also alerts JAC staff that an item has already been invoiced and approved by WCCAFS. All JAC invoice submissions are also cross-referenced by the JAC accounting staff against prior invoices and the JAC accounting database to search for and eliminate duplicates.

Recommendation #9 We recommend the Department of Children and Family Services: Implement the planned preventative and detective controls for the JAIS system.

Improvements in the GVT/JAIS Issue: Overpayments and Duplicate Payments Answer: Refine/Re-program existing “JAC Services Report” on JAIS Report needs to be organized by service rather than by juvenile’s name in alphabetical order. This is 100% complete.

JAC Service Units include:

01 – Intake and Commitment and Evaluation; 02 – Psychological Test and Comprehensive Report; 03 – Academic Outcome Testing; 06 – Employment Outcome Verification 08 – Abridged Intake 09 – Abridged Psychological 11 – Non-scheduled Payment; 13 – On Site Screening Pick-up; 14 – Satisfaction Survey; 15 – Psychiatric Evaluation; 16 – Title IV-E Eligibility Determination; 17 – Adoption Home Study; 18 – AOD Juvenile Justice; AOD Screen Child Welfare Issue: JAIS terminology needs to be revised, in some cases, to match the above terminology. This will provide consistent terminology between the JAC and JAIS and eliminate multiple descriptions. This is 100% complete.

Issue: Allow for a CAFS Authorization column. Once authorized, JAIS should lock date, youth and service authorized. This will prevent double billing. In process.