Audit Report on Brookwood Child Care and Its Compliance with Its Child Care Agreement
Executive Summary
Brookwood Child Care (Brookwood) is a not-for-profit organization that provides foster care services and administers funds to children in foster boarding homes and therapeutic boarding homes. Foster care providers are reimbursed for expenses according to a per diem rate based on a formula developed by the New York State Office of Children and Family Services. The per diem rate is limited to the Maximum State Aid Rate (MSAR) established by the New York State Office of Children and Family Services and the New York City Administration for Children’s Services (ACS).
This audit determined whether Brookwood: maintained adequate internal controls over the recording and reporting of its expenses, revenues, and days-of-care; was paid based on the appropriate per diem rate in accordance with the New York State standards of payment, ACS regulations, and accurate days-of-care data; and complied with certain promulgated announcements and regulations stated in the New York State Standards of Payment, and the City’s CWA Foster-Care Reimbursement Bulletin No. 92-5.
For Fiscal Year 2000—July 1, 1999, to June 30, 2000—ACS reimbursed Brookwood $9,328,314 for providing services to 918 individuals in its Regular and Therapeutic Foster Boarding Home programs. In addition, Brookwood received $234,797 from ACS for its Independent Living Skills Program, an educational program for individuals in its care who are at least 14 years of age.
Brookwood generally complied with the financial provisions of its child care agreement and with State and City regulations. When ACS performed its Fiscal Year 2000 closeout for Brookwood, it determined that ACS owed Brookwood $237,844. However, we found that Brookwood inaccurately classified and incorrectly reported days-of-care on its Report of Actual Expenditures DSS 2652 and Care Day Census and Pass-Through Calculation, the documents upon which ACS based its closeout. In addition, Brookwood made errors and misclassifications in its reported expenses and paid its foster parents at rates that were lower than the approved rates. Moreover, Brookwood owes the City $79,588 because it did not use all of the Independent Living Skills Program funds that it received from ACS. At the same time, ACS owes Brookwood $105,651 because it was not paid for all of its Foster Boarding Home Program expenses. Consequently, ACS owes Brookwood $26,063 rather than the $237,844 determined by the closeout.
We recommend that Brookwood include only those expenses allowed in the New York State Standards of Payment for Foster Care of Children and the City’s CWA Foster-Care Reimbursement Bulletin No. 92-5,report its days-of-care accurately and in accordance with New York State and ACS regulations, determine the amount by which each foster parent was underpaid for Fiscal Year 2000 and make the appropriate retroactive payments. In addition, we recommend that ACS pay Brookwood only $26,063, rather than the $237,844 determined by the ACS year-end closeout, and ensure that Brookwood complies with this report’s recommendations.
ACS, which responded for Brookwood and itself, stated that both agreed with the audit’s findings and recommendations. ACS also responded that Brookwood agreed to: include only those expenses allowed by New York State Regulations and ACS on its Report of Actual Expenditures DSS 2652; report its days-of-care accurately and in accordance with New York State and ACS regulations; and calculate the amount of underpayments made to each foster parent and make the appropriate retroactive payments. ACS further stated it will pay Brookwood $26,063 instead of the $237, 844 determined by the closeout, and that it had notified Brookwood in writing to comply with the audit’s recommendations.