REPORT DIGEST

DEPARTMENT OF VETERANS’ AFFAIRS

ILLINOIS VETERANS’ HOME - MANTENO

COMPLIANCE ATTESTATION EXAMINATION

For the Two Years Ended:

June 30, 2004

Summary of Findings:

Total this audit 3

Total last audit 0

Repeated from last audit 0

Release Date:

April 13, 2005

State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

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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 Home failed to provide the minimum level of direct care nursing hours to its residents as required by Federal regulations.

· The Home’s internal controls related to the timely approval of vouchers for payment are inadequate.

(Expenditures and Activity Measures are summarized on the next page.)

DEPARTMENT OF VETERANS' AFFAIRS - MANTENO VETERANS' HOME

COMPLIANCE ATTESTATION EXAMINATION

For The Two Years Ended June 30, 2004

EXPENDITURE STATISTICS

FY 2004

FY 2003

FY 2002

! Total Expenditures (All Funds) (1).....

$20,943,355

$19,580,768

$19,364,977

OPERATIONS TOTAL.........................

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

$20,943,355

100.00%

$19,515,868

99.67%

$19,334,977

99.85%

Personal Services...........................

% of Operations Expenditures....

Average No. of Employees........

$11,952,964

57.07%

284

$12,066,403

61.83%

293

$11,889,674

61.49%

311

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

% of Operations Expenditures....

$2,669,830

12.75%

$2,604,267

13.34%

$2,518,159

13.02%

Contractual Services......................

% of Operations Expenditures....

$3,327,069

15.89%

$3,143,222

16.11%

$3,253,591

16.83%

Locally Held Funds - Benefit Fund...........

% of Operations Expenditures....

$245,363

1.17%

$328,852

1.69%

$272,286

1.41%

All Other Operations Items.................

% of Operations Expenditures......

NON-APPROPRIATED FUNDS

Library Grant Fund (775).........................

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

$2,748,129

13.12%

$1,373,124

7.03%

$64,900

.33%

$1,401,267

7.25%

$30,000

.15%

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

$44,045,264

$42,228,201

$43,244,997

SELECTED ACTIVITY MEASURES	FY 2004	FY 2003
Average Number of Residents - Skilled Care................................ Average Number of Residents - Domiciliary Care........................	296 0	284 2
Average Number of Residential Care Employees.........................	284	293
Ratio - Average Number of Employees to Residents.....................	0.96/1	1.03/1
Estimated Cost Per Year Per Resident - Skilled Care.................... Estimated Cost Per Year Per Resident - Domiciliary Care............	$66,273 *	$63,853 $35,120

HOME ADMINISTRATOR(S)

During Period: Richard Bateman (July 1, 2002 - December 31, 2002), Paul Opp – Acting Administrator (January 1, 2003 – August 18, 2003), Martin J. Downs – (August 19, 2003 thru Current)

Currently: Martin J. Downs

(1) Includes all funds except the Residents’ Trust Fund.

* Not applicable as there were no domiciliary residents during Fiscal Year 2004

Direct care nursing hours provided by the Home fell below the required minimum level

102 out of 392 vouchers were not approved in a timely manner

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

DIRECT CARE HOURS

The Home failed to provide the minimum level of direct care nursing hours to its residents as required by Federal regulations in order for a Veterans Home to receive Federal per diem reimbursements.

The Code of Federal Regulations (38 CFR Part 51.130(d)) requires Veterans Homes that receive federal per diem for nursing home care of Veterans to provide nursing services to ensure that there is direct care nurse staffing of no less than 2.5 hours per patient per 24 hours, 7 days per week in the portion of any building providing nursing home care.

The Home’s management indicated that although money was allocated for personal services for the Home, declining revenues have forced the State to more closely examine hiring. While turnover rates and leaves of absence have remained constant, new procedures for hiring have caused delays in bringing new direct care staff into the Home. (Finding 1, page 8)

We recommended the Home maintain adequate nursing staff to ensure the minimum level of direct care nursing hours is provided to residents as required by Federal regulations.

The Home’s management accepted the recommendation and stated that they have corrected the problem.

INTERNAL CONTROLS OVER TIMELY APPROVAL OF VOUCHER ARE INADEQUATE

The Home’s internal controls related to the timely approval of vouchers for payment are inadequate.

We noted 102 (26%) vouchers out of 392 tested that were not approved in a timely manner. We also noted that 10 (3%) of 372 Home Fund vouchers tested were not paid in a timely manner. None of these late payments would have required the Home to make an additional interest payment to the vendor unless requested by the vendor.

The Home’s management stated that there was a combination of reasons why certain vouchers may not have been approved in a timely manner. Invoices may be received by several different departments within the Home. Some of these departments took several days to forward invoices to the accounting department. Receiving reports and other necessary documents also took several days to be delivered to the accounting department. In addition, the Home is required to submit all vouchers to the Department of Veterans’ Affairs Central Office for approval. Vouchers paid late were a result of late approvals. (Finding 2, Page 9)

We recommended the Home develop procedures to ensure that all vouchers are approved within 30 days of receipt of a proper bill. We further recommended that all vouchers be paid within 60 days in accordance with the State Prompt Payment Act.

OTHER FINDING

The remaining finding is less significant and is reportedly being given attention by the Home. We will review progress toward implementation of our recommendations in our next examination.

The Home’s responses to the findings were provided by the Administrator, Mr. Martin Downs, in a letter dated October 27, 2004.

AUDITORS' OPINION

We conducted a compliance attestation examination of the Home as required by the Illinois State Auditing Act. We also performed certain agreed-upon procedures with respect to the records of the Home to assist in our compliance attestation examination of the entire Department of Veterans’ Affairs. We have not audited any financial statements of the Home for the purpose of expressing an opinion because the Home does not, nor is it required to, prepare financial statements.

____________________________________

WILLIAM G. HOLLAND, Auditor General

WGH:TLK:pp

SPECIAL ASSISTANT AUDITORS

Our special assistant auditors were Nykiel Carlin & Co., LTD.