REPORT DIGEST

ANDREW MCFARLAND MENTAL HEALTH CENTER

LIMITED SCOPE

COMPLIANCE EXAMINATION

For the Two Years Ended:

June 30, 2005

Summary of Findings:

Total this report 2

Total last report 1

Repeated from last report 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

Iles Park Plaza

740 E. Ash Street

Springfield, IL 62703

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

This Report Digest is also available on

the worldwide web at

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

SYNOPSIS

¨ The pharmacy hub at the Center did not maintain adequate pharmacy commodity inventory records.

¨ The Center did not approve vouchers for payment in a timely manner.

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

ANDREW MCFARLAND MENTAL HEALTH CENTER

LIMITED SCOPE COMPLIANCE EXAMINATION

For The Two Years Ended June 30, 2005

EXPENDITURE STATISTICS	FY 2005	FY 2004	FY 2003
· Total Expenditures (All Appropriated Funds).................................................	$16,404,075	$15,638,368	$17,024,821
OPERATIONS TOTAL........................	$16,392,675	$15,626,768	$17,013,021
% of Total Expenditures....................	99.9%	99.9%	99.9%
Personal Services..............................	$11,387,575	$11,080,811	$12,059,875
% of Operations Expenditures.......	69.5%	70.9%	70.9%
Average No. of Employees...........	216	221	236
Average Salary Per Employee.......	$52,720	$50,139	$51,101
Other Payroll Costs (FICA, Retirement).....................................	$2,595,973	$2,212,002	$2,619,941
% of Operations Expenditures.......	15.8%	14.2%	15.4%

Contractual Services.......................... ..	$1,701,106	$1,647,312	$1,730,063
% of Operations Expenditures.......	10.4%	10.5%	10.2%

All Other Items..................................	$708,021	$686,643	$603,142
% of Operations Expenditures.......	4.3%	4.4%	3.5%

GRANTS TOTAL.................................	$11,400	$11,600	$11,800
% of Total Expenditures....................	0.1%	0.1%	0.1%

· Cost of Property and Equipment.......	$22,158,443	$22,094,685	$21,961,473
· Cost of Inventories.............................	$390,884	$173,755	$174,860

SELECTED ACTIVITY MEASURES (Not examined)	FY 2005	FY 2004	FY 2003
· Average Number of Residents...............	112	102	104
· Ratio of Employees to Residents............	1.93/1	2.17/1	2.27/1
· Cost Per Year Per Resident..................	*	$194,611	$195,140

*The information needed to perform this calculation was not available.

HOSPITAL ADMINISTRATOR(S)

During Period: Karen Thurman (7/1/03 – 7/31/03), Karen Schweighart (8/1/03 – 1/15/04), Scott Viniard (1/16/04 – 6/30/05)

Currently: Scott Viniard

Thirteen of 25 (52%) pharmacy items had large discrepancies when the auditors recounted these items

Eleven of 62 (18%) vouchers tested were not approved timely

INTRODUCTION

The Illinois Department of Human Services (DHS) – Andrew McFarland Mental Health Center (Center) is located at 901 Southwind Road, Springfield, Illinois.

FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

INADEQUATE CONTROLS OVER PHARMACY INVENTORY RECORDS

The pharmacy hub at the Center did not maintain adequate pharmacy commodity inventory records. Responsibility for the pharmacy hub was transferred to the DHS – Central Office during FY05.

During our test counts of the pharmacy inventory, we noted that the Pharmacy did not follow up on the discrepancies noted between the end of year counts and Pharmacy records. Pharmacy staff stated that Central Office staff conducted pharmacy counts on June 10, 2005 and made adjustments without consulting with either pharmacy staff or management of the Center prior to making adjustments. The June 30, 2005 adjusted balance per Central Office for the pharmacy inventory totaled $344,276.

Thirteen of 25 (52%) items that required large adjustments as a result of the June 10, 2005 inventory count continued to have large discrepancies when the auditors recounted these items on September 19, 2005 (Finding 1, pages 10-11).

We recommended all proposed adjustments be followed up with the necessary pharmacy personnel to verify accuracy prior to adjustments being posted.

Center officials agreed with the finding and stated that the Bureau of Pharmacy and Clinical Services (Bureau) staff will conduct another physical inventory. Bureau personnel will tabulate the counts, compare them to central office records (commodity control system), make the necessary adjustments and enter them into the commodity control system. After the adjustments have been posted, a pharmacist will review the adjustments for accuracy.

VOUCHER PROCESSING WEAKNESS

The Center did not approve vouchers for payment in a timely manner. During testing we noted the following:

Eleven of 62 (18%) vouchers tested, totaling $81,354, were approved between 5 and 153 days late. (Finding 2, page 12)

We recommended that the Center comply with the Illinois Administrative Code procedures and implement controls to ensure vouchers are approved within the required time frame.

Center officials agreed with the finding and stated that additional staff was added to the Business Office in March 2005 to ensure that vouchers are processed in a timely manner. Management will review the Illinois Administrative Code requirements with all appropriate staff.

Responses to the recommendations were provided by Carol L. Adams, Secretary of the Department of Human Services in a letter dated January 19, 2006.

AUDITORS’ OPINION

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

______________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:CML:pp

AUDITORS ASSIGNED

The compliance examination was conducted by the Auditor General’s staff.