la audit-the help group child and family center (2011)

8/3/2019 LA Audit-The Help Group Child and Family Center (2011)

http://slidepdf.com/reader/full/la-audit-the-help-group-child-and-family-center-2011 1/14

C O U N T Y O F L O S A N G E L E SDEPARTMENT OF AUDITOR-CONTROLLER

KENNETH HAHNALL OF ADMINISTRATION500 WESTEMPLE STREET, ROOM 525LOS ANGELES, CALIFORNIA 90012-3873

PHON E: (213) 974-8301AX: (213) 626-5427

WENDY L. WATANABEAUDITOR-CONTROLLER

ASST. AUDITOR-CONTROLLERS

ROBERT A. DAVISJOHN NAlMO

JAMES L. SCHNEIDERMANJUDl E. THOMAS

July 1, 201 1

TO : Supervisor Michael D. Antonovich, MayorSupervisor Gloria MolinaSupervisor Mark Ridley-Thom asSupervisor Zev YaroslavskySupervisor Don Knabe

FROM: Wendy. WatanabeAuditor-Controller

SUBJECT: THE HELPROUP CHILD AND FAMILY CENTERA DEPARTMENTOF MENTALEALTH AND DEPARTMENTF CHILDREN FAMILY SERVICESONTRACT PROVIDER - CONTRACTCOMPLIANCE REVIEW

We have completed a review ofhe Help Group Childnd Family Center (HGr

Agency). Our reviewas intended to evaluate the Agency's compseparate County contracts.he Department of Mental Health (DMH ) HGCFC to provide mental health services, inclassessing their mental healtheeds , and implemen ting treatmentDepartmen t of Children and Fam ilyervices (DCFS ) also contracts with HGprovide Wraparound Approach Services (Wraparouand their families, including therapy, housing, ed

The purpose of our review waso determine whether HGCFC naccordance with their County contracts. We f theAgency's accounting records, internal controls,

County guidelines.

DMH paid HGCF C approximately1 0.6 million on a cost-reimbursemen t iscalYear (FY) 2009-10.CFS paid HGC FC approximately2.3 million on a fee-for-servicebasis for FY 2009-10. The Agency 's offices are locn the Second and ThirdSupervisorial Districts.

Help Conserve Paper - Print Double-Sided"To Enrich Lives Through Effective and Caringervice"



Board of SupervisorsJuly 1, 201 1

Results of Review

DMH Program Review

HGC FC maintained documentation to support heAgency staff assigned tohe DMH Program had the required the Agency did not always comply with the County contract

Seventeen (38%) ofhe 45 client Assessme nt forms reviewedescribe the clients' symptoms and behaviors he Diagnostic andStatistical Manual ofental Disorder (DSM).

Ten (22% ) of the 45 Client Care Plans sampled did not include

HGCFC's attached response indicates that the Agency will continue to providetraining to their clinical sta ff to ensure thathe Assessments and C lient Care P lansare adequately documented.

DMH and DCFSra ~ a ro u n d rograms Fiscal Review

HGCFC maintained adequate controls over cash andcharged DMH $1I51,510 andCFS Wraparound $91,545 in questioned Specifically, HGCFC:

Charged $1,114,560 and $88,969 to the DMH and Wraparound

respec tively, for facilities leased from related leases were charged at the lower of actual cost or fair market vas required the County contract.GC FC leased the facilities from related ythe same board of directors and executive managem ent he Countycontract allows agencieso charge related party transactions he lower ofactual cost or fair market value. HGC FC has not provo supportthe lease charges.

After our review, HG CF C prov ided documentation of their actual facility costs.HGC FC's attached respon se indicates thathe Age ncy determined theirctual costsfor D M H an d W raparound Program facilities as $505,354 an d $30,160, respectively.

HGC FC agreed to reduce their F Y 2009-10 DM H Cost Report and their reportedWraparound Program expenditures by the balance of the questioned costs;$609,206 and $55,145, respectively.

Overcharged DMH $25,640or vehicles thegency leased from a relatedarty at ahigher ratehan allowed. The total lease amounts chargo the DMH ProgramnFY 2009-10 were $28,500. Howeve r,he related party's actual cas only$2,860.

Help Conserve Paper - Print Double-Sided"To Enrich Lives Throughffective and Caring Service"



Boa rd of SupervisorsJuly 1, 201 1

HGCFC's attached response indicates that the009-10DMH Cost Report to reducehe costs by $25,640.

Allocated $1 1,310 tohe DMH Programor shared Program expenditurdocumentation toupport the expendituresr the allocation rates.

HGCFC's attached response indicates that heir shared cost

allocation basedn a timetudy they have recently completed.

Allocated $2,576o the Wrap around Programn FY 2010-11 for utilitiesdocum entation to support the allocation rates.

HGCFC's attached response indicates that heir shared cost

allocations based on aime study they have recently completed.

Deta ils of our review, along with recomm endations

Review of Report

W e discussed the results of our review with HGCF C,MH and DCFS. The attache d response indicates they agree withur findings and recomm endations.and DCFS will ensure thatGCFC im plements the recomm endations in our report.

W e thank HGCF C's management for their cooperatreview. Please calle if you have any questions,r your staff may contact

Chadw ick at (213) 253-0301.

Attachment

c: William T Fujioka, Chief Executive OfficerMarvin J. Southard, D.S.W., Director, DM HJackie Contreras,h.D., Acting Director, DC FSGary H. Carm ona, Chair, Board of Directors,GCFCBarbara Firestone,h.D., CEO, H GCFC

Public Information OfficeAudit Committee

Help Conserve Paper --Print Dolrka:ca-S~ded"To Enrich Lives Through Effecfive and Caring Service"



THE HELP GRO UP CHILD AND FAM ILY CENTERDEPARTMENT OF MENTAL HEALTHND DEPARTMENT OF CHILDREN AND

FAMILY SERVICES WRAPAROUND PRO GRAMCONTRACT COMPLIANCE REVIEW

FISCAL YEARS009-10 AND 201 0-1 1

BILLED SERVICES

Objective

Determine whether The Help Group Child and provided the services billedo the Department of Mental Health n accordancewith their DMH contract.

Verification

We selected0 billings, totaling,317 minutes, from the 391,881 s15 full and half-day billingsrom 1,645 service daysf approved Med i-Cal ro mSeptember and October 2007.e also selected an additional five billingapproved Medi-Cal billingsor May and June 2010. We reviewed the AssClient Care Plans and Progress Notesn the clients' charts forhe selected billings.

Results

HGC FC maintained documentationo support the service minutesampled, andcompleted the Progress Notess required by the Coun ty contract.did not completeome elements of the Assessments and naccordance with the DM H contract requiremen ts.

Assessments

HGC FC did not adequately describehe clients' symptom s and beheAssessm ents, consistent withhe Diagnostic and Statistical Manual of M(DSM), to support the diagnoses for7 (38%) of the5 clients samp led. contract requires the Agencyo follow DSMhen diagnosing clients.SM is ahandbook publishedy the Am erican Psychiatric Associationprofessionals, which lists different categories oordiagnosing them.

Client Care Plans

Ten (22%) of the 45 Client Care Plans samp led did not coor theclients as required byhe Coun ty contract.

A U D I T O R - C O N T R O L L E R

C O U N T Y O F L O S A N G E L E S



The Help Group Child andamily Center Pane 2

Recommendation

I. HGCFC management ensurehat Assessments and Client Care Plans

are adequately documentednd completed in accordance he

County contract.

STAFFING QUALIFICATIONS

Obiective

Determine whether HGCFC treatment staff had heservices.

Verification

We reviewedhe California Board of Behavioral Sciences'ebsite and/or the personnelfiles for three treatme nt staff,ho provided services to DM H clients duringay andJune 2010.

Results

All three employeesn our samplead the qualifications required to he servicesbilled.

Recommendation

None.

Objective

Determine whetherhe Agency deposited cash receipts timelynd recorded revenuenthe Agency 's records properly.

Verification

W e interviewed HGC FC1s management, andeviewed the Age ncy's financial recordWe also reviewed threeank reconciliations for Septem ber 2010.

Results

HGCFC deposited cash timely and recorded reve





The Help Group Child andamily Center Page 3

Recommendation

None.

COST ALLOCATIONLAN

Obiective

Determine whether HGC FC prepared their Cost DM H and Wraparound contracts, and usedhe Plan to allocate shared eappropriately.

Verification

We reviewed the Agency's Cost Allocationlan and selected eight expenditures, totaling $1,188,296, incurred between, to

ensure that expenditures were allocated amonghe Agency's programs app

HGCFC prepared their Cost Allocationlan in compliance with theMH andWraparound contracts. However, the Agency Program and $91,545 tohe Wraparound Program in questioned costs. Specifically:

DMH P rogram

$1 I 14,560 in Fiscal Year (FY) 2009-10 for lease chaere

leased from related parties without documentationhe charges werehe lower ofactual cost or fair market value. HGC FC leasedhe facilities from relatedcontrolled by the same board of directorsnd executive managem ent The County contract allows agencies to charge the lower of actualost or fair market value. HGC FC indicatefacilities at fair market value. How ever,he Agency did not provide dsupport the lease charges.

e $11,310 for shared expenditures inY 2010-11, without payroll reports to supporthe allocations.

DM H pays HGC FC a negotiated rate per unit of serf the total amoupaid by DMH exceedsGCFC's actual costs, the Agency must he excessrevenue. The Agency reports their revenuesnd actual expenditures onCost Report.





The Help Group Child and Family Center Pane 4

Wraparound Program

$85,308 for lease chargesn FY 2009-10 for facilities thatere leased from relatedparties without docum entation thathe lease costs were forhe lower of actual costor fair market value.

$2,576 for utility expendituresn FY 2010-1without docum entation heallocation rates.

Recommendations

HGCFC management:

2. Provide documentation to support the leased properties, reduce

lease cost to the lower o f cost or fa ir market value, repay DCFS fa r

the over-allocated amount and revise their DMH FY 2009-10 Cost

Report fo r the over-allocated amounts.

3. Provide documentation to support the $11,310, and reduce the FY

2010-11 DMH Program expenditures by the unsupported amounts.

4. Provide documentation to support $2,576 in util ity charges, or repay

DCFS for the unsupported amount.

5. Ensure that only allowable expenditures are charged to the DMH

Program.

6. Ensure that their cos t allocation methodologies are supported.

EXPENDITURES

Objective

Determine whetherhe DMH and Wraparound Programelated expenditures areallowable underhe contracts, docum ented properly and b

Verification

W e interviewed Agency personnel, and reviewed nd documentationto support ten Wrap aroundnd DM H Program expenditures, totalingJuly 2009 and September 201 0.

Results

HGCFC overchargedMH $25,640 for vehicles leased from a relateostthat was approximately nineimes higher than the related party's actualhe





The Help Group Child and Family Center Pane 5

related party is controlledy same board mem bers and executisHGC FC. The County contract allows agencieso charge related party tranup to the lowerf actual cost o r fair market value. The tothe DMH Programn FY 2009-1 0 was $28,500.owever, the related parwas only2,860, resulting in $25,640 in unallowable costs charged to DMH .

Recommendations

HGCFC management:

7 . Reduce the FY 2009-10 DMH Cost Reporty $25,640 andepay DMH

the excess amounteceived.

8. Ensure that related party transactionsre charged at lowerf actual

cost or fair marketalue.

FIXED ASSETS

Obiective

Determine whether fixed asset depreciation chaPrograms were allowable under the contracts, documenteaccurately.

Verification

W e interviewed Agency personnel, and reviewedhe Agency's fixedsset and

equipment inventory listing.n addition, we reviewed the $2,0n depreciation

expense charged to the Wraparound Program duY 2009-10.

Results

The depreciation expense chargedo the Wraparound Program documented properly,nd billed accura tely.

Recommendation

None.

PAYROLL AND PERSONNEL

Objective

Determine whether payroll expenditures were ao the DMH aWraparound Programs. In addition, determine whether personnelas required.





The Help Group Childnd Family Center Pane 6

Verification

W e reviewed DM H and Wrapa round-related payroll expenditnine employees tohe payroll recordsor August 2010,nd reviewed personnelthe nine employee s.

Results

HG CFC 's payroll expendituresere appropriately charged tohe DMH and WraparoProgram s. In addition, thegency maintained the personnel files as require

Recommendation

None.

COST REPORT

Determine whether HGC FC'sY 2009-10 DM H Cost Report recono the Agency'saccounting records.

Verification

W e traced the Agency's FY 2009-10 DMHost Report tohe Agency's accounrecords.

Results

HGCFC 's Cost Report reconciledo the Age ncy's accounting records.

Recommendation

None.





AttachmentPage 1 of 5

Atlrninistwlivt?Officcr.

13130 tfurbank l l lvci .

Sliorn~ailOnkn, C A 0 140 1. l i k 81%.'/131.@35UFax: 0 1D.9fifi.4089~f>\~?,.~.it~t!i~:*!~><jtt:~~i>.<>~~<j

April 14,201 1

Susan Kim, CI'A, CIAPrinci pal Accountant-~utfitor.~t-Auciitort,os Angeles County Auditor-Controller,C:ountywide Contra ct Mon itoring Division

RE: 'The kIeIp Group Child and FamilyenterI)MH/Wrapasom~dContract Compliance ReportRespotlsesfCorrective Action l'la~i

f IGCFC itlaintaitied doct~t nentatio no support theav ice minutcs sampled andornpietcd

the Progress Notess required by the County contract. Fiowevcr, 1-IGCFCdi d not completesotlie eletnetlts oftlic Ass essm e~~ tsnd C lient Care Plans i n accordance with the Co~iritycontract scquirements.

Asscssrnents

I-IGCFC did not adeciuatcly dcscribe the clients 'yrnpioms and behaviors consistent with theDiagtiostic an d Statistical ManualFMcntal Disorder (DSM) to support theivcn diagnosisfi r 17 (38%)of the 45 clients samplcd. The Coutity contriict requires t l ~ c gency tooilow?ISMwhen diagnosing clients. DSM is a handbook published by the American PsychiatricAssociation for m ental hcalth professionals, which lists different categories of tnctltaldisorcler and the criteria foringtlosing them.

The Agency did not complete so me ele~nctits f the Clicnt Care Plans fbr I0 (22%) of the 45clients s a ~ ~ ~ p l e dn accord ance with thc County contract. Specifically,licnl Care Planscorilaitied goals that were spccific.

Rccommenda ionE-IGCPCrnanagemer~t nsure t ha t Asscsstncrtts a a d Client C:ire Piails arecomplctcd in arco~.dancevitll the County contract.

Response:

To eNsftre lt(lfA S S ~ S S I I M ~ ~ . ~fzrfClient Cctrc Pfittts are co ny) lefe (trr czccortfattcewith rltec o l r ~ t yontrcrcf HGCFC lrfisp ~ t flre,fillo~viirgrocerlr~restt pkrce:



Attachment

Page 2 of 5

2. Rclnferl tminiitg ltns already hegrrn aird will corttirtue crt regrilnr In ferunls atsupervisoryand cliitician Zet~olso onsitre tltcrr 1111 cletttettts of the CCP nve cottzplefeci,

3, Rcgtlinrly scltecfzded chnrt revie~vswill be rrlilized to etzsure ftrnf requiredf/ocunte?ttntiotzasdescribed above is n(lequnie/y addressed ArIriitiorznZ trr'rrlfig will

occur6-f

f is cfeterfiziireditfitpcrrtic~ilnr lirzicicrrtsn w d nrfditiottnl raiiziftg.

COST ALLOCATION PLAN

Objective

Determine whether WCCFC's Cost Allocation Plall is prepared in con~pliance it h the

County contract and the Agency used the PIan to appropriatelyiIocate shared programexyendituses.

Verification

We reviewed the Agency's Cost Allocatioil PIan and selected eigltt shared expeilditurestotaIing $ I , 188,296 incurred between July 2009 and September 2010 to ensure that theexpenditures were appropriately a located to the Agency's pt-ograms.

Results

I-IGCFC psepa~.ed beir C os t Allocation Plan i n co~npfia~iceith the County contract.However, the Agency a1located $ , 27,460 to the DM H pro'ctgl'am an d $9 1,545 to theWraparound Progsam i n questioned costs. Specifically,GCFC allocated:

DMN Program

$1 , I 14,560 in Fiscal Year (FY) 2009- 10 for leasing four facilities from related pattieswithout documentation to support that theease costs were charged at lower of actual costs orfair marketalue. Specificaily, HGCFC leased the facilities fi-om three selated partiescontrolled by tllc same board of directors and executive management as HGCFC. TheCounty contract allows ag encies to charge related party tral~sactions nly up to the lower ofactual costs or fair tnarket value, HGCFC indicated that the facilities were leased a t fairmarket value.iowever, the Agency has not provided thectual costs incurred by t he relatedpasties or fair market valu e o f the facilities.

$1 1,3 10 in FY 2010-11 of shared program expend itures without payroll reco rds or timerepor-ts to supporf their allocation rates,

DMEI pays I-IGCFC based on a negotiated rateer unit of service provided rather than costreimbursement. If the Agency 's revc t~ues xceed their actualxpenditures, the Agency must



AttachmentPage 3 of 5

repay DM H for the excess am ount received. The Agency reports their rcvctlues and actualexpenditures on their annual Cost Repost and repays DMH for ally excess atnounts paid.

Wraparoutid Program

$85,308 i n FY 2009-10 for leasing two facilities fiom related parties without documentationto support that the lease cos ts were charge atower of actual costs or fair market value.HGCFC leased tile facilities from two related parties controlled by the same board ofdirectors and executive managem ent as HGCFC. The County contract allowsgencies tocharge related party transactions only up to the lower ofactual casts or fairarket value,HGCFC indicated thathe facilities were leased at fair marlcet value. However, the Agencyhas not provided the actual costs incurred by the related parties or fair rnarket value ofhefacilities,

$2,576 in FY 2010-1 1 for utility expej~ditureswithout documentation to supp ort th e

allocation rates,

Recommendations

HGCFCmanagement:

2. Provide docurnentation to support the lower of actual costsr fair market value forthe leased properties and repay DCFS and revise DM H FY 2009-10 Cost Report for

over allocated amounts.

Respotzse:- While tf te agettcy (lidprovide docrcmenfution.fo?~ile air rnurkct vrrirre of leusectyropesfies, the Age~t cy H W C ) has revisited uit area occupnircy to ensure Ilzntallocations Based on sqrrms,footagenre nccurtrfe. We have idefztifled he actualcosfs hat ruere of clzarged to fite progmm and nlloctrted tltem hased on arbeuoccupancy art recurd at that time resccitiitg in $505,354 of actual cosf. HGCFC wilfredo the FY 2009-10 Cost Report based an alljusted cost (see afiac fted wor.ks/ieef).

S~ pp oi ii ri g ocumeitta tiofi or the nitnclted wnrk,slieet wcis provided to NiizezMendoza. We are ncIditzg the documeitt~tiotthat wns missing to ~(sfi$$ fte DMHoccrtpuncy ni the Slzermun Oaks campus tofaihzg17,144 Sq 3t that wcls

ou standitzg.

3. Provide documentationo support the $11,310 and reduce the FY 2009-10 Cost

Report and FY 2030-11 DMH program expendituresy the unsupported amounts.

Response:- $11,310 was aflocnte(ibased on salaries, Tize ugency (HGCFC} izns domen time s t u e to support all alkocations based ott salary. Since the $11,310 is part qf

tire curreiztfiscn l year (FY 10-II), flteaflocntiotts will be arijusferl f o mnke sure



Attachment

Page 4 of 5

that sltnr'oi~ps*ogunmxffeft( litu ias rre supporfed with nctuni afjucafion afosrtetcrmined by the time sfrtlly.

4. Provide docrllllel~tafion o support $2,576r repay DCFS for uasupported arnouut.

Response:- $2,576 was allucafodbnscd on sal(trie,~. he agency (HGCFC) itas clarze a time

stiidy f o support all aNocntions bnsed on s a k ~ y . ince th e $2,575 is part of tlzecusre~ t f i sca lear (FY I ) - I l ) , the allocntions will be ndjusieil to make srcre tlrafshared pr0gr4nfn xpeiditures at4e upported with actual allacatiurz rates rl eie r~~i tte tlby flto fime sttidy,

5. Ensure that only allowab le expenditures are charged to the DMH program.

Response:- Ail expenses rviil be or are rtv iew erf ~brccrcracy and flzctf fhey are (zliownbk perOMB Ckciilnr A122,

6, E~lsurehat allocation methodologies are supported by adequate documentation.

Re,sponse:- XX(;CFC /ins done a tiwe stirdy and utilizing the tim e study to eiz ,w e flrntc~I1ocafiotz ethodologies are supported.

EXPENDITURES

Objective

Determine whether the DMH and Wraparound Prog ra~ n elated expendit~tre s re allowableunder theirounty contracts, properly documentednd accurately billed.

Verification

We interviewed Agency personnet and reviewed financial records and documentatioi~osupport five Wraparound expenditures totaling $9,979 and five DM H expenditures totaling

$45,870 incurred betweenul y 2009 and September 20 1.0.

Results

WGCFC's Wraparound Ptaogramexpenditures were properly documented and accuratelybilled. However, HGCFC overcharged DMI-I $25,640 for leasing vehicles from a relatedpasty at a higher rate than allowed. 'The related party isontrolfed by saltle board nlembersand executive management as IIGCFC. Tlte County co~?tra ctllows ager~cieso charge



Attachment

Page 5 of 5

tvtated party transactions only up to the lower of actual costs or fair market value. The totalvan lease ainounrs charged to the DMH Pt-ogram in FY 2009-1 0 was $28,500. I-lowcver, th erelated party's actual cost:was $2,860, resu1titlg in at1 overcl~argc f $25,640,

Recommendations

WGCFC management:

7.Reduce the FY 2009-10 DMR Cost Report by $25,640 arid repay DM H for any excessalnount received.

Respon,sz:- HGCFC tvill redo the FY 2009-10 DMfI Cost Report to ~ c ~ f u c ehe cost by flzcdi,~aliowecJ mcrunt ($25,640).

8. Ensure that related party tratxsactions are charged at lower of actual costs or fairmarket value.

Respotzse:- The Ageitcy has done n t l~itetrrtly to utifizeas the nteflzucl o allocalc costs foinsure hat i n tlzefutitre ull ~+e laie(lp frrfyrrtnsacfiotzs cia charged at lnrvcr ofactual cost,surfair. tnarket value. We itnve ident@ed r'he crctuai cost that were notcltargccl to the pi40gramctnd ufiocate~fhem based on mere occupancy on record atthat t i ~ l e csultittgn $30,160 of nctunl cost for flre Wraparoun dprogi4am seeuftacized worksheet$

~ i i f i a e l oveSenior Vice President of Finance

la audit-the help group child and family center (2011)

Documents