REPORT DIGEST

JOHN J. MADDEN MENTAL HEALTH CENTER

LIMITED SCOPE COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2005

Summary of Findings:

Total this audit                          5

Total last audit                          0

Repeated from last audit           0

Release Date:

 June 13, 2006

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

http://www.state.il.us/auditor

SYNOPSIS

¨ The Center did not have adequate control over voucher processing.

¨ The Center did not timely file employee performance evaluations.

¨ The Center had inadequate billing and collection of accounts receivable.  Collections decreased $597,800 over the two year period.

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

EXPENDITURE STATISTICS

FY 2005

FY 2004

FY 2003

 Total Expenditures (All Appropriated Funds)....

$24,893,505

$23,183,616

$25,786,144

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

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

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

$24,740,405

99.4%

$18,448,288

$23,026,692

99.3%

$17,451,910

$25,616,244

99.3%

$19,268,435

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

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

                Average Salary Per Employee.......

74.6%

308

$59,897

75.8%

312

$55,936

75.2%

345

$55,851

         Other Payroll Costs (FICA, Retirement)..

                % of Operations Expenditures.......

$4,175,034

16.9%

$3,315,737

14.4%

$4,064,285

15.9%

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

                % of Operations Expenditures.......

$1,501,064

6.1%

$1,601,478

7.0%

$1,665,795

6.5%

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

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

$358,952

1.4%

$368,051

1.6%

$420,426

1.6%

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

                % of Operations Expenditures.......

$257,067

1.0%

$289,516

1.2%

$197,303

0.8%

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

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

$153,100

0.6%

$156,924

0.7%

$169,900

0.7%

 Cost of Property and Equipment................

$23,509,561

$21,814,871

$21,762,283

SELECTED ACTIVITY MEASURES

(Not Examined)

FY 2005

FY 2004

FY 2003

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

111

120

128

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

2.77/1

2.60/1

2.70/1

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

*

$254,447

$235,034

*Department had not calculated at close of fieldwork.

FACILITY DIRECTOR

     During Examination Period:  Dr. Lorrie Stone

     Currently:  Mr. Gustavo Espinosa

39 of 130 vouchers tested (30%) were not approved within 30 days

Interest paid on late payments

For 38 out of 50 (76%) employee personnel files examined, performance evaluations were completed late or not at all

FINDINGS, CONCLUSIONS, AND

RECOMMENDATIONS

INADEQUATE CONTROL OVER VOUCHER PROCESSING

     The Center did not adequately document the processing and approval of invoices as required by Department of Human Service’s procedures and did not ensure all invoices were approved and paid within the time required by the Illinois Administrative Code.

      During our review of vendor invoices and vouchers we noted:

-         39 of 130 vouchers tested (30%) were not approved within a 30 day time period. These late voucher payments totaled $463,637 and were 2 to 299 days late.

-         9 of 130 vouchers tested (6.9%) included invoices that were not paid within 60 days of receipt of the vendor invoice. These invoices totaled $79,377 and were 31 to 269 days late.

-         Interest amounting to $6,840 was not paid to the vendors on these late payments. (Finding 2, page 10)

      We recommended the Center ensure prompt processing of invoices so vendors will be paid timely.

      Department officials agreed and stated that the Center is in the process of filling vacant positions plus personnel redeployments that are necessary to comply with the 90% or more accuracy.

UNTIMELY FILING OF PERFORMANCE EVALUATIONS

      Written performance evaluations were not prepared and submitted on an annual basis.

      For 38 out of  50 (76%) employee personnel files examined, performance evaluations had been completed late or not at all. Twenty seven performance evaluations were performed between 2 and 120 days late and 2 over 120 (127 and 214) days late. Nine employees were missing performance evaluations for one of the two years covered in the engagement period. (Finding 3, page 11)

The Patient Resource Unit did not operate during FY 2005

Center collections for reimbursement of patient services decreased $597,800 over the two year period

      We recommended the Center comply with the Department of Human Services policies to ensure that evaluations are prepared in a timely manner.

      Department officials agreed and stated that the Center has begun complying with Departmental policies requiring the timely completion of staff evaluations. The Center’s Human Resource (HR) Unit “rightsizing” has impaired HR oversight on compliance with this issue. The Center’s current personnel resources are being augmented to comply with the recommendation.

INADEQUATE BILLING AND COLLECTION OF ACCOUNTS RECEIVABLE

      The Patient Resource Unit did not operate during fiscal year 2005 resulting in a significant reduction in moneys collected.

      The Patient Resource Unit is responsible for determining what the daily service charge should be for patient services and who is responsible for payment (i.e. Medicare, Medicaid, insurance, private pay). Once the determination is made, the Patient Resource Unit is responsible for billing and collection for the patient service. Beginning July 1, 2004, there was no contractor in place to operate the unit and the Center did not staff the Patient Resource Unit.

     Center collections for reimbursement of patient services decreased significantly from $609,800 in fiscal year 2003 to $198,200 in fiscal year 2004 and $12,000 in fiscal year 2005, a decrease of $597,800 over the two year period. (Finding 3, pages 12-13)

      We recommended that Center management take the necessary measures to immediately resume operations of the Patient Resource Unit so charges for patient services may be billed and payment be reimbursed to the State.

       Department officials agreed and stated that the Center has made significant effort and progress to hire the positions necessary to carry on these functions. Corrective action to operate a functioning Patient Resource Unit will be significantly completed by June 30, 2006.

OTHER FINDINGS

The remaining findings dealt with inadequate support for payroll deductions and inadequate segregation of duties. We will review the progress toward implementation of all our recommendations during our next examination.

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.