REPORT DIGEST DEPARTMENT ON AGING COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2012 Release Date: May 23, 2013 Summary of Findings: Total this audit: 6 Total last audit: 12 Repeated from last audit: 4 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 www.auditor.illinois.gov SYNOPSIS • The Department lacked adequate controls and monitoring over eligibility determinations and payments made to service provider agencies that applied for and received an enhanced rate for employee health insurance coverage under the Community Care Program. • The Department failed to adequately monitor its Community Care Program service providers. • The Department did not maintain adequate supporting documentation for its receipts and expenditures during the examination period. In addition, the Department failed to reconcile its receipt and expenditure records with the Illinois Office of the Comptroller reports. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS NEED TO STRENGTHEN CONTROLS AND MONITORING OVER ENHANCED RATE PAYMENTS The Illinois Department on Aging (Department) lacked adequate controls and monitoring over eligibility determinations and payments made to service provider agencies (providers) that applied for and received a special hourly rate (enhanced rate) as reimbursement for providing health insurance coverage under the Community Care Program. Public Act 095-0713, effective July 1, 2008, authorized the Department to pay vendors providing homemaker, chore and housekeeping services an additional $1.33 per hour (enhanced rate) for the purpose of providing health insurance coverage to their employees and to those employees’ dependents. For the two fiscal years under examination, the Department has paid providers approximately $64 million for the enhanced rate payments. The enhanced rate is available for eligible providers with private insurance (Type 1), as well as eligible employer-provided health plans as part of a collective bargaining agreement with unionized workers (Type 2). During testing, we noted: • Seven of seven (100%) Type 2 providers tested did not submit required annual eligibility documentation or financial reports to the Department. • The Department did not maintain or receive adequate documentation from Type 1 providers in order to monitor their continued eligibility for receiving the enhanced rate. (Finding 12-01, pages 10-12) We recommended the Department strengthen controls to ensure that initial and ongoing reviews of applications, eligibility, and annual reporting for the enhanced reimbursement rate are conducted properly, in a timely manner, and in accordance with administrative rules. We also recommended the Department ensure required information is obtained from providers and maintained to support agency determinations. Department officials agree with the recommendation. INADEQUATE MONITORING OF SERVICE PROVIDERS The Department did not adequately monitor its Community Care Program (CCP) service providers. During our testing of 25 CCP service providers, which received $861,336,287 from the Department during the examination period, we noted the Department had not received annual audit reports for 13 (52%) of the service providers. We also noted the Department had not reviewed 9 (75%) of the 12 reports received from the service providers. (Finding 12-02, pages 13-14) We recommended the Department strengthen their controls for monitoring of service provider activities by following-up on delinquent audit reports. The Department should also ensure that audit reports are reviewed by staff in a timely manner after they are received. Department officials agree with the recommendation and stated that controls for monitoring service provider activities have been developed and implemented. NEED TO IMPROVE CONTROLS OVER RECEIPTS AND EXPENDITURES The Department did not maintain adequate supporting documentation for receipts and expenditures. In addition, the Department did not reconcile its receipt and expenditure records with the Illinois Office of the Comptroller reports. We noted the following: • The Department did not perform 18 of 24 (75%) required monthly reconciliations of its receipt records with the Comptroller’s Monthly Revenue Status Report. • The Department did not perform 18 of 24 (75%) required monthly reconciliations of its expenditure records to the Comptroller’s Monthly Appropriation Status Report. • The Department was unable to provide tape balancing reports for 20 of 189 (11%) expenditures tested. • The Department was unable to provide vouchers and their corresponding supporting documentation for five of 189 (3%) expenditures tested. • The Department was unable to provide receipt deposit transmittals for five of 51 (10%) receipts tested. (Finding 12-03, Pages 15-16) We recommended the Department implement procedures to ensure monthly reconciliations are performed and any discrepancies noted are corrected in a timely manner. We also recommended the Department ensure proper receipt and expenditure documentation is maintained to substantiate essential transactions of the State. Department officials agree with the recommendation and stated they were unable to locate required documentation due to a move of the Department’s headquarters and they will ensure safeguards are implemented to prevent missing documentation in the future. OTHER FINDINGS The remaining findings pertain to: (1) untimely performance evaluations, (2) failure to timely file reports, and (3) failure to implement the Family Caregiver Act. We will review the Department’s progress towards the implementation of our recommendations in our next examination. AUDITORS’ OPINION We conducted a compliance attestation examination of the Department for the two years ended June 30, 2012 as required by the Illinois State Auditing Act. We have not audited any financial statements of the Department for the purpose of expressing an opinion because the Department does not, nor is it required to, prepare financial statements. WILLIAM G. HOLLAND Auditor General WGH:jv SPECIAL ASSISTANT AUDITORS Our Special Assistant Auditors were Winkel, Parker & Foster, CPA PC.