| INTRODUCTION
Our 1998 audit of the Department is presented in two volumes. Volume I contains
the findings, recommendations, and agency responses. Volume II contains the agency's
financial statements.
FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
24 HOUR INVESTIGATIONS
The Department did not initiate an investigation of every child abuse and neglect
case within 24 hours of receipt of the report as required by the Abused and Neglected
Child Reporting Act. Department statistics indicate the following noncompliance:
Fiscal Total
Reports Not
Percent of Reports
Year Reports In Compliance
Not in Compliance
1998 65,862
461
0.70%
1997 67,657
426
0.63
1996 70,739
347
0.49
1995 77,075
1,014
1.32
1994 75,514
1,151
1.52
1993 71,539
1,428
2.00
Failure to respond to a report of abuse or neglect within 24 hours is a violation of
the Act and could result in further endangerment of the child. (Finding 98-9, pages 37-39)
We recommended the Department initiate investigations of all child abuse and neglect
reports within 24 hours of receiving the report as mandated by State law.
Department officials responded it is their objective to initiate all investigations
within 24 hours and they agree that any level of non-compliance is reason for concern.
Department managers have reviewed the files for non-compliant cases and have provided the
following reasons for cases to be listed as out of compliance: data entry errors, children
were out of state, staff responsible were non-specialized staff working after hours,
problems transmitting information to the field, worker error, and workload issues.
Department officials said they will conduct a Quality Assurance audit of the
non-compliance issue this fiscal year. They are working to maximize staff levels and will
consider a failure in this area to warrant disciplinary action.
OVERDUE CHILD ABUSE/NEGLECT INVESTIGATIONS
Reports of child abuse and neglect were not always determined within 60 days as
required by the Abused and Neglected Child Reporting Act. The Act states the Department
shall determine, within 60 days, whether a report is "unfounded" or
"indicated" and provides that the Department may extend the period up to an
additional 30 days for good cause. Department statistics indicate the following
noncompliance:
Fiscal Total
Reports Not
Percent of
Reports
Year Reports
In Compliance
Not in Compliance
1998 65,877
2,125
3.23%
1997 68,124
1,223
1.80
1996 70,743
859
1.21
1995 77,082
5,703
7.40
1994 75,514
10,452
13.84
1993 71,539
6,457
9.03
Failure to make a determination of a report within 60 days is a violation of the Act,
could delay the implementation of a service plan and could result in further endangerment
of the child. (Finding 98-10, pages 40-42)
We recommended the Department determine reports of child abuse or neglect within 60
days as mandated by State law.
Department officials agreed that all investigations should be completed within 60 days,
unless extensions for good cause are granted. They provided the following reasons for
investigations being overdue: clerical errors, supervisory vacancies, absences due to
training, staff shortages, and poor staff performance. Department officials agreed that
non-compliance in this area is critical and the current number of overdue reports is
decreasing rapidly.
INADEQUATE CONTROLS OVER LOCAL ACCOUNTS
The Department did not deposit checks received for the Children's Trust Fund on a
timely basis. We selected 26 checks for testing and noted the checks were held from 12
days to 175 days before deposit. The check held for 175 days was in the amount of
$204,528. These funds are not earning interest while the checks are sitting in the agency
and there is the risk of potential loss due to theft or misplacement. (Finding 98-4, page
27)
In addition, expenditures from the Children's Benefit Fund lacked proper documentation
to support the Fund's expenditures. We selected 10 checks written in Fiscal Years 1997 and
1998 for examination and found supporting documentation for five of the checks was not
complete. The Fund's checks are issued to individuals who purchase goods or services for
the benefit of the children and the purchaser is responsible for obtaining receipts for
the expenditures. The five checks for which receipts were not available totaled $3,554.
(Finding 98-5, page 28)
We recommended that Children's Trust Fund receipts be deposited on a daily basis and
that individuals entrusted with Children's Benefit Fund checks be required to support such
expenditures with receipts.
Department officials agreed with the recommendations, but noted that daily deposit of
Children's Trust Fund receipts was not possible.
LACK OF REQUIRED PLAN FOR RECRUITING, PLACING AND TRAINING MINORITY ADOPTIVE AND
FOSTER FAMILIES
The Department has no written plan for recruiting, placing and training minority
adoptive and foster families. The Children and Family Services Act requires the Department
to "develop and implement a written plan for placing children" which shall
include a plan for recruiting, placing and training minority adoptive and foster families.
Approximately 75 - 80% of foster care children are African-American.
We recommended that the Department implement a written placement plan as required by
statute or pursue legislation to have the mandate rescinded. (Finding 98-23, page 61)
The Department agreed with the finding and stated that it will convert 6 regional
recruitment plans into one plan. According to the Department, each of the individual
regional recruitment plans have targeted recruitment of African American homes.
LACK OF TRAINING FOR CHILD PROTECTIVE INVESTIGATORS AND CHILD WELFARE SPECIALISTS
The Department did not follow requirements for employing and training certified
child protective investigators and child welfare specialists. By law, the Department is
required to maintain a continuous in-service staff development and evaluation system. In
our testing of 19 employees, we found 9 had less than 20 hours of in-service training for
the two-year certification period.
We recommended the Department implement a system to ensure that employees hired have
the appropriate educational requirements and that they receive appropriate training after
hiring. (Finding 98-24, page 62)
The Department agreed with our recommendation and indicated that it has taken actions
to ensure that staff receive the required training.
DOCUMENTATION MISSING FROM CHILD WELFARE FILES
Child welfare files lacked documentation required under federal and state laws. Of
50 files selected for testing, 10 lacked a current service plan or had untimely initial
service plans, 9 were missing court orders and 2 were missing administrative case reviews.
In addition, 4 files could not be found at the field office.
The Child Welfare Program received almost $12 million in FY98. Failure to comply with
federal requirements could result in sanctions from the granting federal agency resulting
in loss of federal funding.
We recommended that the Department follow provisions of the law in providing services
for children and in documenting what services have been provided. We further recommended
that enforcement of Department procedures be strengthened to ensure files contain all
required documentation. (Finding 98-6, page 29)
The Department disagreed with the finding, noting that its review of the case files
cited by the auditors noted only 5 exceptions. The auditors responded that the
Department's review took place almost 4 months after the auditors' review and required
documentation was still missing.
REPAYMENT PROVISIONS OF LOAN AGREEMENTS NOT STRICTLY ENFORCED
The Department is not strictly enforcing agreements with individuals who obtained
loans from the Family Reunification Fund.
Of 12 transactions sampled, all persons obtaining a loan had signed a form committing
to a monthly loan repayment amount or a time donation to community service. However, 10 of
the 12 individuals made no form of repayment. In total, the Department disbursed
approximately $30,350 in FY97 and $35,700 in FY98, of which $700 and $3,500 was repaid,
respectively. Without loan repayments or additional donations to replenish the fund, other
families are unable to receive assistance. (Finding 98-15, page 48)
We recommended the Department strictly enforce the conditions of signed loan
agreements. The Department agreed with our recommendation and stated that it will continue
to take steps to get repayment or document community service.
YEAR 2000 EFFORTS COULD BE IMPROVED
The Department's efforts to define and correct impending computer problems due to
the impact of the Year 2000 were not fully adequate.
The Department's Y2K Coordinator has developed a compliance plan and master project
timetable, but the required systems changes were not scheduled to be completed until late
in 1999. In addition, the amount of work to be completed is great. Since the Department
uses computer systems to process information to meet its mandates and objectives,
addressing the technical issues surrounding the millennium is important. It is imperative
that the Department meet its Y2K goals in order to ensure the continuous operation of
critical systems. As of September 30, 1998, the Department self-reported that it was only
30% complete in bringing its critical systems into compliance. (Finding 98-8, pages 35-36)
Department officials agreed and responded they are actively remediating 40 mission
critical applications that support the child welfare functional areas. They plan to have
the critical financial systems completed in May, 1999 and the remaining critical systems
completed in September, 1999. The response indicates contingency plans are being developed
and the entities licensed by the Department are being alerted of potential Y2K problems.
WEAKNESSES IN MANAGEMENT PRACTICES
During the course of our audit we performed tests of transactions and evaluated the
Department's management practices. The following areas were noted as needing improvements:
Equipment
Annual property inventories were not performed for Fiscal Year 1998 or 1997. In
addition, the Department did not maintain a property control log or an Additions and
Deletions Register for Fiscal Year 1998. Our tests revealed items that could not be
located, items missing inventory tags, items not included on the inventory listing, and
items located at addresses different than on the inventory listing. (Finding 98-2, pages
24-25)
Provider Contract
The Department allowed its largest institutional service provider to reconcile the
payments under its contracts and determine if the Department owes or is owed money. The
Department had 24 contracts totaling approximately $49.2 million with this provider in
1998 and 24 contracts totaling $48.2 million in 1997. An overpayment refund of $479,000
was received on June 11, 1998 but not deposited until July 6, 1998, although it should
have been deposited within 24 hours. Additionally, the Department allowed the provider to
claim reimbursements in excess of maximums obligated in the contracts. The excess totaling
approximately $259,313 was paid by offsetting other contracts for which the maximum amount
was not reached. This procedure was only done for this provider. (Finding 98-1, pages
22-23)
Installment Purchases
During our review of leases and installment purchases, we discovered two new
installment purchases of EDP equipment and 3 terminations of existing installment
purchases that were not reported to the State Comptroller. As a result, a $57,000
adjustment to the financial statements was necessary. (Finding 98-3, page 26)
State Treasury Deposits
Receipts and refunds received by the Department were not always deposited into the
State Treasury within the time periods required by State statute. Of the 192 receipts and
refunds examined, 39 receipts, ranging from $42 to $800,000, and 18 refunds, ranging from
$122 to $888,291 were deposited from 3 to 28 days late. The Department had even been
granted deposit extensions by the State Comptroller. Untimely deposits increase the
chances that such receipts could be misplaced or misappropriated. (Finding 98-12, pages
44-45)
Prudent business practices require that agency fiscal procedures be appropriately
managed to ensure accountability and the safekeeping of State funds.
Department officials agreed with each of these findings and stated they will take steps
necessary to correct the weaknesses.
INSUFFICIENT INTERNAL AUDITS
The Office of Internal Audits did not audit all of the Department's major systems
of internal administrative and accounting controls during Fiscal Year 1998 and 1997 as
required by the Fiscal Control and Internal Auditing Act. Of the eighteen internal audits
planned, only four were completed. According to Department personnel, the Office of
Internal Audits was unable to perform most of the planned audits because the Office was
assigned special projects by management, and also due to staffing deficiencies. The
completion of internal audits would provide recommendations which could result in cost
savings, improved internal controls, increased operating efficiency and increased program
effectiveness. (Finding 98-13, page 46) This finding has been repeated since 1986.
Additionally, the auditors found that the chief internal auditor was not free of
all operational duties as required by the Act. An internal audit function free of
operational duties would allow the Department to identify and correct internal control and
other deficiencies in a more timely manner. (Finding 98-14, page 47)
We recommended additional resources be allocated to the Department's Office of Internal
Audits so that it will be allowed to function in accordance with all provisions of the
Fiscal Control and Internal Auditing Act.
Department officials agreed with our recommendations and stated adequate resources are
being allocated. They said internal audit positions are posted and they are soliciting
applications and that operational duties will be assigned to other units. (For previous
Agency responses, see Digest Footnote #1.)
OTHER FINDINGS
The remaining findings are being addressed by the Department. We will review
progress toward the implementation of our recommendations in our next audit.
Mr. Jess McDonald, Director of the Department, provided the agency's responses.
AUDITORS' OPINION
Our auditors stated the Department's June 30, 1998 and June 30, 1997 financial
statements are fairly presented.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KMA:pp
SPECIAL ASSISTANT AUDITORS
- Kerber, Eck & Braeckel, LLP were our special assistant auditors on the audit.
-
DIGEST FOOTNOTE
1. INSUFFICIENT INTERNAL AUDITS - Previous Agency Responses
1996: The Department agrees with the finding and will implement the
recommendation. A plan to audit all major systems will be developed. Moreover, the OIA has
hired two (2) new Internal Auditors to primarily perform EDP audits. This will enhance the
Department's ability to perform additional internal audits in order to comply with the
Fiscal Control and Internal Auditing Act (FCIAA).
1994: Accepted and in the process of implementation.
1992: The Department agrees with the finding and partly agrees
with the recommendation.
The Office of Internal Audits is functioning in accordance with
the provisions of the Fiscal Control and Internal Auditing Act. The Department will keep
special projects to a minimum.
1990: The Department agrees with the Finding and is studying the
Recommendation.
The Office of Audits was reduced by five (5) positions during the
Fiscal 1982 and 1983 layoffs and by one (1) position in a 1987 layoff. Due to tight State
revenues and in spite of increasing responsibilities, the Office of Audits has never been
restaffed to the Fiscal 1982 headcount.
The Department continues to study internal responsibilities of
the Office of Audits. The results of these internal studies could reallocate some of the
Office of Audits' responsibilities to other monitoring units and, thus, help to bring it
into compliance with the Act.
1988: The Department agrees with the finding and is studying the
recommendation.
The Office of Audits was reduced five positions during the fiscal
1982 and 1983 layoffs. As cited before, in the response for finding #17, due to tight
State revenues and the ever-increasing children's needs, the Office of Audits has never
been restaffed to the fiscal 1982 headcount.
The Department continues to study the internal responsibilities
of the Office of Audits. The results of these internal studies could reallocate some of
the Office of Audits' responsibilities to other monitoring units and, thus, help to bring
it into compliance with the Act.
1986: The Department agrees with the finding and is studying the
recommendation.
The Office of Audits was reduced five (5) positions during the
fiscal 1982 and 1983 layoffs. As cited before, in Response #17, due to tight State
revenues and the ever-increasing children's' needs, the Office of Audits has never been
restaffed to the fiscal 1982 headcount.
The Department has begun internal studies which could reallocate
some of the Office of Audits' responsibilities to other monitoring units and, thus, bring
it into compliance with the "Act". |
