REPORT DIGEST

 

 

JOHN J. MADDEN
MENTAL HEALTH CENTER

 

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 patientís 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.}

 

 


††††††††††††††††††††††††††††††††††††† JOHN J. MADDEN 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)....

 

 

$29,324,201

 

$26,709,051

 

 

$24,893,505

 

†††† 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

††††††††††††††† % 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

†††††††† Other Payroll Costs (FICA, Retirement)..

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

$4,129,352

14.1%

$3,246,018

12.2%

$4,175,034

16.9%

†††††††† Contractual Services...............................

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

$1,768,298

6.1%

$1,638,738

6.2%

$1,501,064

6.1%

†††††††† Commodities...................................................

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

$457,971

1.6%

$497,212

1.9%

$ 358,952

1.4%

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

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

$489,572

1.7%

$445,089

1.7%

$257,067

1.0%

†††† GRANTS TOTAL..........................................

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

 

$147,393

0.5%

 

$147,393

0.6%

$153,100

0.6%

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

$24,446,007

$24,219,770

$23,509,561

 

SELECTED ACTIVITY MEASURES (Not Examined)

FY 2007

FY2006

FY 2005

†††† Average Number of Residents..............................

136

132

111

†††† Ratio of Employees to Residents...........................

†††† Paid Overtime Hours & Earned Compensatory Hours..................................................................

†††† Value of Paid Overtime Hours & Earned Compensatory Hours................................................................

2.36/1


76,163


$2,688,815

2.36/1


73,096


$2,451,774

2.77/1


45,972


$1,431,762

†††† Cost Per Year Per Resident.................................

*

$265,779

$295,655

*Department had not calculated at close of fieldwork.

 

 

 

 

FACILITY DIRECTOR

†††† During Audit Period:Dr. Lorrie Stone (7/1/05 Ė 8/31/05); Gustavo Espinosa (Effective 9/1/05)

†††† Currently:†††† Gustavo Espinosa

 

 

 

 



 

 

 

 

 

 

 

 

 

 Failure to maintain complete patient financial case records

 

 

 

 

 

 

 

 

 

 

 

 

 

 Failure to follow-up on accounts receivable

 

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

INADEQUATE CONTROLS OVER ACCOUNTS RECEIVABLE

 

††††† The Center had inadequate controls over identifying a patientís 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 ďNotice of DeterminationĒ 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.

 

 

 

 

 

 

 

 

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 managementís 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 Centerís Trust Fund system.

 

 

 

Bank statements not on file

 

 

 

 

 

 

 

 

 

 

Locally held funds were not reconciled to fund bank accounts

 

 

 

 

 

 

 

 

 

 

 

 

Receipts and disbursements were not supported with documentation

 

 

 

 

 

 

        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 Centerís progress toward implementation of all our recommendation in our next examination.

 



 

AUDITORSí 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.