Audit Report on the Days-of-Care and Expenses Reported by Lutheran Social Services of Metropolitan New York for Its Foster Care Programs

AUDIT REPORT IN BRIEF

This audit determined whether the final amount of funds due Lutheran Social Services of Metropolitan New York (Lutheran) for Fiscal Year 2001 was more or less than the amount it was advanced, based on New York State standards of payment, City regulations, and days-of-care data. For Fiscal Year 2001—July 1, 2000, through June 30, 2001—the Administration for Children’s Services (ACS) reimbursed Lutheran $10,459,340 for providing services to 720 individuals in its programs.

Our review of Lutheran’s foster care program expenses and days-of-care provided indicated that Lutheran owes ACS $897,737 because the advances it received from ACS exceeded the allowable program costs.Of this amount, ACS paid Lutheran $329,188 for expenses for which the City will not receive reimbursement because the expenses were not in accordance with the New York State regulations.

Further, Lutheran did not comply with some of the promulgated announcements and regulations of the New York State Program Manual for Standards of Payment for Foster Care of Children and the City Foster-Care Reimbursement Bulletin No.92-5. Finally, Lutheran paid its foster parents at rates that were lower than the rates approved by the State.

To address these issues, we recommend that Lutheran:

• Reimburse ACS $897,737;
• Report program expenses in the appropriate cost centers;
• Capitalize items costing in excess of $500 as required by New York State and ACS guidelines;
• Report its days-of-care accurately and in accordance with New York State and ACS regulations, billing ACS for only those children in attendance at its foster care programs; and
• Determine the amount by which each foster parent was underpaid for Fiscal Year 2001 and make the appropriate retroactive payments.

Additionally, we recommend that ACS:

• Recoup $897,737 from Lutheran;
• Discontinue paying foster care providers for trial discharge days-of-care in excess of the seven consecutive days allowed by the New York State regulations; and

Ensure that Lutheran complies with this report’s recommendations. In that regard, ACS should issue a written notice to Lutheran requiring that it implement the report’s recommendations.