REPORT DIGEST

LINCOLN
DEVELOPMENTAL
CENTER

COMPLIANCE AUDIT
For the Two Years Ended:
June 30, 1997

Summary of Findings:

Release Date:
March 12, 1998

State of Illinois
Office of the Auditor General

WILLIAM G. HOLLAND
AUDITOR GENERAL

Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703
(217) 782-6046

SYNOPSIS

• The Department billed one resident at the maximum daily rate since 1980, but was unable to determine this resident's ability to pay the accumulating debt. Department officials indicated the resident's assets may not be large enough to cover the balance, which exceeded $700,000 at June 30, 1997.

The resident may have qualified for federal Medicaid reimbursement of the account balance, had the necessary financial papers been filed by the resident or his guardian. Because federal Medicaid coverage was not sought, the State of Illinois cannot obtain Medicaid reimbursement for any portion of these charges retroactively.

• During the audit period, the Center temporarily advanced $2,900 in restricted-purpose bequest funds to cover the cost of employee seminars, accreditation fees, and employee recognition functions. According to the terms of the donor's will, the bequest could be used only for the benefit of the residents. This account has now been repaid.
  
  
  
  
  
  
  
  

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

FY 1997

FY 1996

FY 1995

• Total Expenditures (All Appropriated Funds)
  
  OPERATIONS TOTAL
  % of Total Expenditures
  Personal Services
  % of Operations Expenditures
  Average No. of Employees
  Average Salary Per Employee
  
  Other Payroll Costs (FICA, Retirement)
  % of Operations Expenditures
  
  Commodities
  % of Operations Expenditures
  
  Contractual Services
  % of Operations Expenditures
  
  All Other Items
  % of Operations Expenditures
  
  GRANTS TOTAL
  % of Total Expenditures
  
  
  
• Cost of Property and Equipment
  
• Cost of Inventories on Hand
  
  

$27,566,764


$27,566,764
100%
$22,022,834
79.9%
688
$32,010

$2,564,562
9.3%

$1,524,434
5.5%

$1,245,992
4.5%

$208,942
0.8%

$0
0%


$42,354,087
$257,292

$26,637,485


$26,637,485
100%
$21,023,434
78.9%
671
$31,331

$2,416,976
9.1%

$1,512,469
5.7%

$1,432,897
5.4%

$251,709
0.9%

$0
0%


$40,562,528
$311,795

$24,811,221


$24,811,221
100%
$19,925,342
80.3%
672
$29,651

$2,135,587
8.6%

$1,483,255
6.0%

$1,084,268
4.4%

$182,769
0.7%

$0
0%


$38,669,774
$347,511

FY 1997

FY 1996

FY 1995

• Average Number of Residents
  
  
• Ratio of Employees to Residents
  
  
• Cost Per Year Per Resident
  
  
• Department's progress in reducing employees' injuries (Workers' Compensation Claims)
  
  
  

434

1.59/1

$84,827

362

446

1.50/1

$78,735

489

444

1.51/1

$72,609

612

During Audit Period: Martin J. Downs

Currently: Martin J. Downs

The Department was unable to determine a resident's ability to pay

The State cannot obtain Medicaid reimbursement retroactively

The Center temporarily advanced $2,900 in restricted purpose bequest funds

The Center has fully repaid the account

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

DETERMINING A RESIDENT'S ABILITY TO PAY

Despite Departmental efforts, the collection of one resident account, valued over $700,000, seems doubtful. The Department billed one resident at the maximum daily rate since 1980. According to staff, the Department was unable to determine this resident's ability to pay the accumulating debt.

Based on the limited financial information gathered, the Department believes the resident's assets may not be large enough to cover this debt. If so, then the resident may have qualified for federal Medicaid reimbursement of the account balance, had the necessary financial papers been filed. Because federal Medicaid coverage was not sought, the State of Illinois cannot obtain Medicaid reimbursement for any portion of the charges retroactively.

The State's interests would be best served if the assessment of a resident's financial condition were completed promptly and, if appropriate, Medicaid reimbursement for future charges were sought. (Finding Code 97-1, page 9.)

The Department accepted our recommendation. According to the response, correspondence from the Office of the Attorney General indicates it will seek a financial accounting for this resident. The Department further states that the filing for Medicaid coverage is the prerogative of the resident or of the resident's guardian.

RESTRICTIONS ON LOCAL FUND USAGE

During the audit period, the Center temporarily advanced $2,900 in restricted-purpose bequest funds to cover the cost of employee seminars, accreditation fees, and employee recognition functions. According to the terms of the donor's will, the bequest could be used only for the benefit of the residents. Center management stated they were not aware of the restricted nature of this account. (Finding Code 97-2, page 11.)

According to the response, the Center management has obtained a copy of the Last Will and Testament and will spend these funds only as authorized. The Center has fully repaid this account for the expenditures noted in this finding.

AUDITOR'S OPINION

We conducted a compliance audit of the Center as required by the Illinois State Auditing Act. We also performed certain agreed upon procedures with respect to the accounting records of the Center to assist our single audit of the entire Department. Financial statements for the Department will be presented in that report.

_____________________________________
WILLIAM G. HOLLAND, Auditor General

WGH:JHL:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Cameron, Wright and Hurst, LLP.