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REPORT DIGEST
JOHN J. MADDEN
LIMITED SCOPE COMPLIANCE
EXAMINATION For the Two Years Ended: June 30, 2007 Summary of Findings: Total this audit 6 Total last audit 5 Repeated from last audit 3 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 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.auditor.illinois.gov |
SYNOPSIS · The Center had inadequate controls over identifying a patient’s ability to pay and following-up on accounts receivable. · The Center had inadequate segregation of duties over locally held fund activities. · The Center had inadequate controls over recordkeeping; reporting and monitoring; and expenditures of locally held fund activities.
{Expenditures and Activity Measures are summarized on the reverse page.}
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JOHN J. MADDEN MENTAL HEALTH
CENTER
LIMITED SCOPE COMPLIANCE EXAMINATION
For The Two Years
Ended June 30, 2007
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EXPENDITURE STATISTICS |
FY 2007 |
FY 2006 |
FY 2005 |
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Total Expenditures (All Appropriated Funds).... |
$29,324,201 |
$26,709,051 |
$24,893,505 |
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OPERATIONS
TOTAL..................................
% of Total Expenditures........................
Personal Services................................... |
$29,176,808
99.5%
$22,331,615 |
$26,561,658
99.4%
$20,734,601 |
$24,740,405
99.4%
$18,448,288 |
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%
of Operations Expenditures...........
Average
No. of Employees............
Average Salary Per Employee....... |
76.5%
321
$69,569 |
78.0%
312
$66,457 |
74.6%
308
$59,897 |
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Other Payroll Costs (FICA,
Retirement)..
%
of Operations Expenditures....... |
$4,129,352
14.1% |
$3,246,018
12.2% |
$4,175,034
16.9% |
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Contractual Services...............................
%
of Operations Expenditures....... |
$1,768,298
6.1% |
$1,638,738
6.2% |
$1,501,064
6.1% |
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Commodities...................................................
%
of Operations Expenditures................... |
$457,971
1.6% |
$497,212
1.9% |
$
358,952
1.4% |
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All Other Items......................................
%
of Operations Expenditures....... |
$489,572
1.7% |
$445,089
1.7% |
$257,067
1.0% |
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GRANTS
TOTAL..........................................
% of Total Expenditures......................... |
$147,393
0.5% |
$147,393
0.6% |
$153,100
0.6% |
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Cost of Property and Equipment................. |
$24,446,007 |
$24,219,770 |
$23,509,561 |
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SELECTED ACTIVITY
MEASURES (Not Examined) |
FY 2007 |
FY2006 |
FY 2005 |
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Average Number of Residents.............................. |
136 |
132 |
111 |
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Ratio of Employees to Residents...........................
Paid Overtime Hours & Earned
Compensatory Hours..................................................................
Value of Paid Overtime Hours &
Earned Compensatory Hours................................................................ |
2.36/1
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2.36/1
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2.77/1
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Cost Per Year Per Resident................................. |
* |
$265,779 |
$295,655 |
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*Department
had not calculated at close of fieldwork. |
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FACILITY DIRECTOR |
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During Audit Period: Dr. Lorrie Stone (7/1/05 – 8/31/05);
Gustavo Espinosa (Effective 9/1/05)
Currently: Gustavo Espinosa |
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Failure to maintain complete patient financial case records
Failure to follow-up on accounts receivable
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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS INADEQUATE CONTROLS OVER ACCOUNTS
RECEIVABLE The Center had inadequate controls over identifying a patient’s ability to pay and following-up on accounts receivable. The Center did not maintain complete patient financial case records to support patient receivables and did not complete the “Notice of Determination” within 60 days of admittance or did not complete it timely. · 4 of 25 (16%) accounts receivable tested did not have all required documentation in the patient financial case record. · 1 of 25 (4%) accounts receivable tested did not have a Notice of Determination on file and 7 of 25 (28%) were completed 54 to 241 days after the 60-day period from date of admittance. The Center also did not follow-up on accounts receivable over 180 days old or report them as collection problems to Central Office. · 4 of 25 (16%) accounts receivable tested were outstanding over 180 days and not reported as problem accounts to DHS Central Office. These accounts receivable totaled $5,958 and ranged from $195 to $4,360. (Finding 1, pages 9-10) Department Officials agreed with our recommendation that the Center comply with existing policies and procedures to process and collect amount owed. Department officials stated the Patient Resource Unit can only function at 100% when the recommended three positions are filled and staff have been trained. The Center has made significant effort and progress to hire the positions necessary to carry on these functions. |
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Internal Control Weaknesses
Disbursements were not posted in the Center's Trust Fund system |
INADEQUATE SEGREGATION OF DUTIES AND MANAGEMENT
OVERSIGHT OF LOCALLY HELD FUNDS
The
Center had inadequate segregation of duties over locally held fund
activities. In addition, the
monitoring system includes ineffective management oversight which does not
take into account procedures that will prevent or detect misstatements in a
timely manner. Our review of locally held funds revealed the following:
·
The Trust Fund
Custodian was responsible for expenditure processing, cash receipt
processing, and expenditure and receipt reconciliation. This is inadequate segregation of duties
and is an internal control weakness.
·
Bank account
reconciliations did not show evidence of management’s review.
·
Cash of one
locally held fund was commingled with another locally held fund. (Finding 2,
pages 11-12) Department officials agreed with our recommendation that the Center establish internal control procedures to segregate duties within the locally held funds. Department officials stated the Center currently has internal control procedures in place; however, due to a vacant position, the Center was not able to ensure proper review of expenditures and segregation of duties. The Center is making an effort to fill the vacant position to ensure adequate control. INADEQUATE CONTROLS OVER LOCALLY HELD
FUNDS The Center had inadequate controls over recordkeeping; reporting and monitoring; and expenditures of locally held fund activities, as follows: Recordkeeping
· 19 of 25 (76%) locally held fund disbursements sampled, totaling $18,282, were not posted in the Center’s Trust Fund system. |
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Bank statements not on file
Locally held funds were not reconciled to fund bank accounts
Receipts and disbursements were not supported with documentation
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· Rehabilitation Fund and Living Skills Fund activities were not recorded in the Trust Fund system. · Bank statements were not on file for 9 of 25 (36%) disbursement transactions.
Reporting and Monitoring
· The Report of Receipts and Disbursements of Locally Held Funds (Form C-17) for the Rehabilitation Fund as of June 30, 2006 reported $594 in disbursements but checks issued totaled $711. · Several locally held funds listed on the Form C-17 as of June 30, 2006 and 2007 were not reconciled to fund bank accounts, resulting in variances in amounts listed on Form C-17, fund trial balances, and bank balances. Receipts and Disbursements · 3 of 25 (12%) receipts sampled totaling $5,525 were not supported with receipt documentation to determine whether the amount recorded in the locally held fund system was the amount actually received by the Center and deposited into the bank account. · 7 of 25 (28%) disbursements totaling $4,272 did not have invoices or receipts to support expenditures. (Finding 3, pages 14-16)
Department officials agreed with our recommendation that the Center immediately strengthen controls over locally held fund recordkeeping, reporting and monitoring, and receipts and disbursements. Department officials stated that the Center will strengthen the controls currently in place by filling the vacant position causing this weakness. OTHER FINDINGS Other findings dealt with monthly attendance reporting, payroll deduction documentation, and voucher processing. We will review the Center’s progress toward implementation of all our recommendation in our next examination. |
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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. We also performed certain auditing procedures with respect to the accounting records of the Center to assist with the financial 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 Prado & Renteria, P.C. |