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REPORT DIGEST
ELGIN MENTAL HEALTH CENTER LIMITED SCOPE
COMPLIANCE EXAMINATION For the Two Years Ended: June 30, 2007 Summary of Findings: Total this audit 4 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 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 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 did not process inventory adjustments on a timely basis and did not maintain adequate books of record. {Expenditures and Activity Measures are summarized
on the reverse page.} |
ELGIN
MENTAL HEALTH CENTER
LIMITED SCOPE
COMPLIANCE
EXAMINATION
For
The Two Years Ended June 30, 2007
|
EXPENDITURE STATISTICS |
FY 2007 |
FY 2006 |
FY 2005 |
|
Total Expenditures
(All Appropriated Funds)........................................................... |
$67,170,821 |
$65,165,035 |
$66,595,689 |
|
OPERATIONS
TOTAL..................................
% of Total Expenditures........................
Personal Services................................... |
$59,694,006
88.9%
$45,113,622 |
$57,536,521
88.3%
$44,025,860 |
$59,187,206
88.9%
$44,039,938 |
|
%
of Operations Expenditures...........
Average
No. of Employees............
Average Salary Per Employee....... |
75.6%
789
$57,178 |
76.5%
792
$55,588 |
74.4%
850
$51,812 |
|
Other Payroll Costs (FICA,
Retirement)..
%
of Operations Expenditures....... |
$8,404,868
14.1% |
$7,066,550
12.3% |
$9,986,005
16.9% |
|
Contractual Services...............................
%
of Operations Expenditures....... |
$4,416,482
7.4% |
$4,620,640
8.0% |
$3,666,578
6.2% |
|
Commodities...................................................
%
of Operations Expenditures................... |
$1,149,348
1.9% |
$1,278,738
2.2% |
$998,472
1.7% |
|
All Other Items......................................
%
of Operations Expenditures........ |
$609,686
1.0% |
$544,733
1.0% |
$496,213
0.8% |
|
GRANTS
TOTAL..........................................
% of Total Expenditures......................... |
$7,476,815
11.1% |
$7,628,514
11.7% |
$7,408,483
11.1% |
|
Cost of Property and
Equipment................. |
$111,834,997 |
$113,350,352 |
$113,439,723 |
|
SELECTED ACTIVITY
MEASURES |
FY 2007 |
FY 2006 |
FY 2005 |
|
Average Number of Residents.............................. |
368 |
368 |
366 |
|
Ratio of Employees to Residents...........................
Paid Overtime Hours & Earned Compensatory Hours.................................................................
Value of Paid Overtime Hours & Earned Compensatory
Hours........................................... |
2.14/1
|
2.15/1
|
2.32/1
|
|
Cost
Per Year Per Resident.................................
*The Department had not calculated this statistic at
the close of Fieldwork. |
* |
$197,036 |
$203,736 |
|
FACILITY DIRECTOR |
|||
|
During Examination Period: Raul Almazar
Currently: Raul Almazar |
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|
Accounts receivable
totaling $101,932 did not reflect timely completion of the “Notice of
Determination”
Failure to maintain
complete patient financial case records
Collection problems were not reported
Adjustment of $610,995
Certain vouchers
tested could not be traced to inventory system reports |
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 complete the “Notice of Determination” within 60 days of admittance or did not complete it timely. ¨ Two of 25 (8%) accounts receivable tested totaling $23,892 did not have a “Notice of Determination” on file and 6 of 25 (24%) totaling $101,932 were not completed timely, ranging from 42 to 248 days after the 60-day period from date of admittance. The Center did not maintain complete patient financial case records to support the initial setup of the patient’s receivable in the billing system. ¨ Four of 25 (16%) accounts receivable tested did not have a completed financial case record on file. These accounts receivable totaled $78,424. The Center did not follow-up on accounts receivable up to 180 days old or report them as a collection problem to Central Office. ¨ Twelve of 25 (48%) accounts receivable tested were outstanding over 180 days old and not reported as problem accounts to DHS Central Office. These accounts receivable totaled $132,875 and ranged from $3 to $73,344. (Finding 1, pages 9-10) This finding was first reported in 2003. Department officials agreed with our recommendation that the Center comply with existing policies and procedures to process, bill, and collect amounts owed. Department officials stated that the Center will continue to allocate needed resources to the Recipient Resource Unit to process, closeout, bill, and collect all amounts owed, and that the Center hired a Business Manager and he is now fully trained in the areas of Medicare, Medicaid billing and collections. (For the previous agency response, see Digest footnote #1) PERPETUAL INVENTORY SYSTEM NOT UPDATED TIMELY The Center did not process inventory adjustments on a timely basis and did not maintain adequate books of record. A significant adjustment of $610,995 for fiscal year 2007 for general stores was due to the non posting of adjustments during fiscal year 2006. In addition, we noted to following: ¨ Six of 25 (24%) vouchers tested totaling $8,195 could not be traced to inventory system activity status reports. ¨ Ten of 10 (100%) of commodity items sampled from the commodity control system status reports did not agree to the physical inventory counts. ¨ A turnover report was not on file to calculate the turnover ratio to determine whether items of $15,000 or more exceeded a years supply. (Finding 3, page 13-14) Department officials agreed with our recommendation that the Center maintain and timely update its perpetual inventory system. Department officials stated that the Center has made corrections and all necessary procedures are in place. Staff responsible for updating inventory is being closely supervised and inventory has been reconciled and monthly reports are being reviewed for compliance. OTHER FINDINGS The remaining findings dealt with inadequate documentation of locally held fund expenditures and excess inventory levels. We will review progress toward implementation of all recommendations during the 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. 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. DIGEST FOOTNOTE #1
INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE – PREVIOUS AGENCY RESPONSE 2005:
Agreed: The Center has hired
a Business manager with special emphasis on Medicare and Medicaid billing and
collections. |