REPORT DIGEST

WILLIAM A. HOWE DEVELOPMENTAL CENTER

LIMITED SCOPE

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2007

Summary of Findings:

Total this audit 2

Total last audit 1

Repeated from last audit 0

Release Date:

June 12, 2008

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the Report contact:

Office of the Auditor General

Attn: Records Manager

Iles Park Plaza

740 E. Ash Street

Springfield, IL 62703

(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also available on

the worldwide web at

www.auditor.illinois.gov

SYNOPSIS

¨ The Center was decertified as a provider of Medicare services on March 15, 2007.

¨ The Center had inadequate control and maintenance of time and attendance records and payroll records.

{Expenditures and Activity Measures are summarized on the reverse page.}

WILLIAM A. HOWE DEVELOPMENTAL CENTER

LIMITED SCOPE COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2007

EXPENDITURE STATISTICS

FY 2007

FY 2006

FY 2005

Total Expenditures (All Appropriated Funds).................

$55,137,106

$49,632,457

$53,152,580

OPERATIONS TOTAL..................................

% of Total Expenditures........................

$55,126,006

99.9%

$49,623,457

99.9%

$53,141,580

99.9%

Personal Services...................................

% of Operations Expenditures...........

Average No. of Employees...............

Average Salary Per Employee..........

$41,133,707

74.6%

767

$53,629

$37,844,824

76.3%

767

$49,341

$38,442,033

72.3%

826

$46,540

Other Payroll Costs (FICA, Retirement)......

% of Operations Expenditures...........

$7,711,101

14.0%

$6,040,447

12.2%

$8,789,798

16.5%

Contractual Services...............................

% of Operations Expenditures...........

$4,660,294

8.5%

$4,418,060

8.9%

$4,382,146

8.3%

Commodities...................................................

% of Operations Expenditures.......................

$1,007,329

1.8%

$862,332

1.7%

$880,128

1.7%

All Other Items......................................

% of Operations Expenditures...........

$613,575

1.1%

$457,794

0.9%

$647,475

1.2%

GRANTS TOTAL..........................................

% of Total Expenditures.........................

Cost of Property and Equipment……………….

$11,100

0.1%

$56,583,144

$9,000

0.1%

$56,434,705

$11,000

0.1%

$55,911,357

SELECTED ACTIVITY MEASURES
(Not Examined)

FY 2007

FY 2006

FY 2005

Average Number of Residents.............................

387

408

430

Ratio of Employees to Residents...........................

Paid Overtime Hours & Earned Compensatory Hours.................................................................

Value of Paid Overtime Hours & Earned Compensatory Hours...........................................

1.98/1

284,035

$7,666,748

1.88/1

224,068

$5,369,075

1.92/1

218,299

$5,041,915

Cost Per Year Per Resident.................................

$154,258

$158,395

*Department had not calculated at the close of fieldwork.

FACILITY DIRECTOR(S)

During Audit Period: Jay Canna (7/01/05 – 4/27/07); Sharon Parker (4/27/07– 7/27/07); Arthur Holmberg (7/27/07 – 4/08/08); Joseph Turner, Acting (Effective 4/08/08)

Currently: Joseph Turner, Acting

Decertification resulted in an estimated loss of revenue of $8,300,000 as of June 30, 2007 and a potential loss of revenue approximating $25,500,000 on an annual basis

54 of 240 (23%) Monthly Attendance Record Reports were not included in the Center’s timekeeping files

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

DECERTIFICATION OF CENTER AS MEDICARE SERVICES PROVIDER

The Federal Department of Health and Human Services decertified the Center as a provider of Medicare services. The decertification resulted in an estimated loss of revenue of $8,300,000 as of June 30, 2007 and a potential loss of revenue approximating $25,550,000 on an annual basis.

The Center for Medicare & Medicaid Services conducted a survey of the Center in August 2006 and identified that the center failed to meet certain Federal Conditions of Participation. Another survey was conducted in March 2007. That survey identified that the Center did not meet the Federal Condition of Participation in the areas of Governing Body and Management and Client Protections. The Center was notified on March 15, 2007 of the Center’s immediate termination as a Medicaid provider.

(Finding 1, pages 9-10)

Department officials agreed with our recommendation that the Center develop and implement a plan to obtain recertification and address the non-compliance with federal requirements.

INADEQUATE CONTROL AND MAINTENANCE OF TIME AND ATTENDANCE RECORDS AND PAYROLL RECORDS

In our testing of payroll expenditures we noted:

- 54 of 240 (23%) of Monthly Attendance Record Reports were not included in the Center’s timekeeping files.

- 63 of 240 (26%) of Monthly Attendance Record Reports included in the Center’s timekeeping file were not signed by the employee’s supervisor.

- 3 of 12 (25%) employee final pay/termination packets necessary to document the calculation of final pay and accrued benefits could not be located.

(Finding 2, pages 11-12)

Department officials agreed with our recommendation that the Center implement procedures to ensure timekeeping and payroll records are properly filed and maintained and that employees review and sign the Monthly Attendance Record Report and supervisors document their review by signing the form before filing it.

AUDITORS' OPINION

We conducted a compliance examination of the Center as required by the Illinois State Auditing Act. This was a limited scope compliance examination. The Center’s accounting records will be covered by the audit of the entire Department of Human Services. Financial statements for the Department will be presented in that report.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:KMC:drh

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Duffner & Company, P.C..