Audit Report on the Days-of-Care and Expenses Reported by OHEL Children’s Home and Family Services, Inc., for Its Foster Care Program

AUDIT REPORT IN BRIEF

This audit determined whether OHEL Children’s Home and Family Services, Inc. (OHEL) complied with New York State standards of payment and City regulations and determined the final per diem rates of its foster care programs. For Fiscal Year 2000—July 1, 1999, through June 30, 2000—the Administration for Children’s Services (ACS) reimbursed OHEL $2,645,524 for providing services to 138 individuals in its foster care programs. In addition, OHEL received $120,603 from ACS for its Independent Living Skills Program (an educational program for individuals in its care who are at least 14 years of age), and $25,231 for its Substance Abuse Prevention Program.

OHEL generally complied with the financial provisions of its child care agreement and with regulations contained in the New York State Standards of Payments, and the City CWA Foster-Care Reimbursement Bulletin No.92-5. It had an adequate system of internal controls over the recording and reporting of its revenue, expenses, and days-of-care.

When ACS performed its Fiscal Year 2000 closeout for OHEL, it determined that ACS owed OHEL $245,779 due to differences between OHEL’s reported expenses and ACS’ advances. However, we found that OHEL is owed $168,654, not the $245,779 that ACS would have paid based on its year-end closeout for OHEL. OHEL incorrectly reported days-of-care on its Standards of Payment Program Statistics DSS-2651, Care Day Census Calculation, and other documents submitted to ACS, the documents upon which ACS based its closeout. Moreover, OHEL owes the City $16,241 because it did not use all of the Independent Living Skills Program

funds that it received from ACS. Consequently, ACS owes OHEL $152,413 rather than the $245,779 determined by the closeout.

Further, OHEL included $397,993 in expenses on itsReport of Actual Expenditures DSS-2652 that were not allowable under New York State and ACS regulations. However, the disallowed charges for OHEL’s foster care programs did not result in a recoupment of funds because our computed operating per diem rates exceeded the maximum per diem rates allowed, even after we deducted the unallowable expenses. Finally, OHEL paid its foster parents at rates that were lower than the rates approved by the State.

• Include only allowable program expenses on itsReport of Actual Expenditures DSS-2652;
• Report its days-of-care accurately and in accordance with New York State and ACS regulations; and
• Determine the amount by which each foster parent was underpaid for Fiscal Year 2000 and make the appropriate retroactive payments.

• Not pay the $245,779 determined by the ACS year-end closeout. Instead, pay only $152,413; and
• Ensure that OHEL complies with this report’s recommendations. In that regard, ACS should issue a written notice to OHEL requiring that it implement the recommendations.