la audit-child and family guidance center (2011)

8/3/2019 LA Audit-Child and Family Guidance Center (2011)

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WENDY L. WATANABEAUDITOR-CONTROLLER

C O U N T Y O F L O S A N G E L E SDEPARTMENT OF AUDITOR-CONTROLLERKENNETH HAHN HALL OF ADMINISTRATION500 WEST TEMPLE STREET, ROOM 525LOS ANGELES, CALIFORNIA 90012-3873PHONE: (213) 974-8301 FAX: (213) 626-5427

ASST. AUDITOR-CONTROLLERSROB ERT A. DAVISJOHN NAlMOJAMES L. SCHNEIDERMANJUDl E. THOMAS

November 4,201 1

TO: Supervisor Michael D. Antonovich, MayorSupervisor Gloria MolinaSupervisor Mark Ridley-ThomasSupervisor Zev YaroslavskySupervisor Don KnabeFROM: Wendy L. Watanabe vd 6;2Auditor-Controller 6 &An< $@-

SUBJECT: CHILD AND FAMILY GUIDANCE CENTER - A DEPARTMENT OFMENTAL HEALTH AND DEPARTMENT OF CHILDREN AND FAMILYSERVICES CONTRACT PROVIDER - CONTRACT COMPLIANCEREVIEWWe have completed a contract compliance review of Child and Family Guidance Center(CFGC or Agency). Our review covered a sample of transactions from Fiscal Years(FY) 2009-10 and 2010-1 1. The Department of Mental Health (DMH) contracts withCFGC to provide mental health services, including interviewing Program clients,assessing their mental health needs, and implementing treatment plans. TheDepartment of Children and Family Sewices (DCFS) also contracts with CFGC toprovide Wraparound Approach Services (Wraparound) Program to children and theirfamilies, including therapy, housing, education, and social assistance.The purpose of our review was to determine whether CFGC provided services inaccordance with their County contracts. We also evaluated the adequacy of theAgency's accounting records, internal controls, and compliance with federal, State, andCounty guidelines.DMH paid CFGC approximately $19 million on a cost-reimbursement basis for FY2009-10. DCFS paid CFGC approximately $648,000 on a fee-for-service basis for FY2009-10. The Agency's headquarters is located in the Third Supervisorial District.

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Board of SupervisorsNovember 4,2011Page 2

Results of ReviewDMH Program ReviewCFGC maintained documentationo support the services billedo DMH, and the staffassigned to theMH Program had the required qualifications.owever, the Agencydid not complete some elements of the Assessmentsnd Client Carelans as requiredby the DMH contract.CFGC1s attached response indicates that the Agency will provide AndClient Care Plan training to alltaff, and increase their oversightnd supervision.DMH and DCFS Wraparound Programs Fiscal ReviewCFGC maintained adequate controls over cash,nd their direct Program were generally allowable, properly documented,nd accurately billed. However, charged $80,559nd $19,984 in questioned costs tohe DMH and WraparouProgram, respectively, and did not return $32,257oDCFS. Specifically, CFGC:

Allocated $69,889 tohe DMH Programor shared expenditures documentation to support the allocation methodologies.CFGC's attached response indicates that the Agencyhe $68,899 tothe DMHrogram based on timesheets to supportheir cost allocation.Charged $5,732 and $5,786 in payroll expenditureso the DMH and WraparoundPrograms, respectively, without documentationo support the allocation rateto charge payroll expenditures tohe Programs.CFGC's attached response indicates thathe Agency will reallocate ($5,732 + $5,786) to the DMHnd Wraparound Programsased on timesheets support theirost allocations.Charged DMH $1,658 for August 2010or 100% of an employee's pay. However,the employee performs general accountingnd administrative functionsor theAgency, and the salary should have been allocated ll programs.CFGC1s attached response indicates that the Agency payroll expenditures amongll benefited programs.At the end ofach Wraparound Programear, the Agencys allowed to reunspent funds upo ten percent of their Program expenditures for Wraparound Program use. The Agency must ny unspent funds in f


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Boa rd of SupervisorsNovember 4 ,20 1 1Page 3

ten percent to DCFS.or the Programear ending April 30, 2010,FGC'saccounting records indicated that they were ao retain $55,945n unspentProgram funds,nd should have returned $32,257o DCFS. CFGC did not any unspent funds to DCFS .CFGC's attached response indicates that the Agencyill repay DCFS.

Details of our review, along with recomme ndationsor corrective action, are Review of Report

W e discussed the results of our review with CFGC, DMH , response indicates that they re-allocated their abenefitted program s, will re-allocate $80,417 ($68$5,732 + $5,786) tohe DMHand Wraparound Programs,nd return $32,257 in unspent fundothdepartments will work with CFGCo ensure the Agency implementsherecomm endations in our report.We thank CFGC managem ent for their cooperationnd assistance during Please calle if you have any questions, orour staff may contact Don Chadwick at(213) 253-0301.

Attachmentc: William T Fujioka, Chief Executive OfficerPhillip Browning, Interim Director, DCFSDr. M arvin J. Southard, Director, DMHSari Scheer, Board Chair,FG CRoy Marshall, Presidentnd CEO, CFGCPub lic Information OfficeAudit Committee


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CHILD AND FAMILY GUIDANCE CEDEPARTMENT OF MENTALEALTH AND DEPARTMENT OF CHILDREN ANDFAMILY SERVICES' WRAPAR OUND PROGRAMSFISCAL YEARS009-1 0ND 2010-1 1BILLED SERVICES

ObjectiveDetermine whetherhild and Family Guidance Center (CFGC ogency) provided theservices billed tohe Department of Mental Health (DMH) in accordanM14contract.VerificationWe selected 50 billings, totaling,676 minutes, from 998,457 serfapproved Medi-Cal billingsor January and February 2010, whichhe most currentbillings availablet the time of our review (September heAssessments, Clientare Plans and Progress Notes maintainedn the clients' chfor the selected billings. The 5,676 minutes represervices provided to 20 programparticipants.ResultsCFGC maintained documentation to supporthe billed services,nd completed theProgress Notess required byhe DMH contract. However, CFGCot completesome elements ofhe Assessments and Client Care Plans y the DMHcontract.AssessmentsNine (45%) of the 20 client Assessment forms reviewed didot adequately describhesymptoms and behaviors consistent withhe Diagnostic and Statistical ManuafMental Disorders (DSM),s required by the DMH contract. The DSMpublished by the American Psychiatric Association for which lists different categories ofental orders andhe criteria for diagnosing themClient Care PlansTen (50%) of the0 Client Carelans reviewed did not contain cliensrequired byhe DMH contract.

A U D I T O R - C O N T R O L L E RC O U N T Y O F L O S A N G E L E S


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Child and Family Guidance Center Page 2Recommendation1. CFG C management ensure that Assessmentsnd Client Care Plansare com pleted in accordanc e with the County contract.

STAFFING QUALIFICATIONSObiectiveDetermine whetherFGC 's treatment staff had the required quservices.VerificationWe reviewed the California Board of Behavioral ebsite and/or the personnelfiles for 17 of the 190 CFGC treatmenttaff, who provide d service so DMH clientsduring Jan uary and February 201 0.ResultsEach employee reviewed hadhe qualifications required to providehe services billed.

RecommendationNone.

UNSPEN T WRAPAROUND PROGRAM REVENUECFGC 's Wraparound Approach Servicesrogram (Wraparoun d) contractheDepartmen t of Children and Family Services o retainunspent revenuep to ten percent of theirraparound operating expenditures.Agency is requiredo place the excess fundsn a reserved accountor futureWrapa round Program expenditures. Any fundsn excess of ten percent muereturned to the County.For the Programear ending April 30, 201, CFG C's accounting records ha tthey had unspent Wrap around funds, totaling88,202, and Program expentotaling $559,454. As a result, CFG Cs allowed to retain $55,94510% of $559,454)for future Wrapa round expenditures, and shouldave returned the remaining $32,257($88,202 - $55,945) to DCFS. CFG C did not reservor futureWrapa round Program expenditures,r return the32,257 in excess funds to DCFS.Subsequent tour review, CFGC reserved the55,945 in their restricted accorfuture Wrapa round Program use.



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Child and Familv Guidance Center Page 3Recommendation2. CFGC management repay DCFS $32,257.

CASHIREVENUEObjectiveDetermine whetherhe Agency deposited cash receipts timelynthe Agency 's records properly.VerificationW e interviewed CFGC management,nd reviewed the Agency's financecords. Wealso reviewedhree bank reconciliations for July010.

CFGC deposited cash timely, and recorded revenue properly.RecommendationNone.

COST ALLOCATIONLANObiectiveDetermine whetherhe Agency 's Cost Allocation Planas prepared in comp liance withthe DM H and Wrapa round contracts, and thathe Agency used the Plan to allocatshared expenses appropriately.VerificationW e reviewed the Agency's Cost Allocationlan, and selected6 shared expenses,totaling $95,376, incurred during July and Augus t010, to ensure that the expwere allocated amonghe Agency 's programs appropriately.

CFG C's Cost Allocation Plan comp lies with the DMHowever, CFGC allocated $68,899 to the DMH n Fiscal Year (FY) 2010-1 without payroll records or time reports to supportoallocate the expenditures.



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Child and Family Guidance Center Paqe 4

During the contract year, DMH pays CFGC basn a negotiated rate nit ofservice. However,f the Agency's Program revenue exceeds heAgency must repay DMHhe excess revenue. The Agency repactual expensesn their annualost Report.RecommendationsCFGC management:3. Provide DMH documentation to supporthe $68,889, and reduce theirFY 2010-1 1MH Program expendituresy any unsupported amount.4. Ensure that allocation methodologiesre supported by adequatedocumentation.

EXPENDITURESObjectiveDetermine whetherhe DMH and Wraparound Program related allowable under their County contracts, docum entedVerificationW e interviewed Agency personnel, and revieweddocum entation for ten DM Hnd Wrap around non-payroll expe$95,798, incurred during July and August010.

CFGC 's expenditures were allowable, docum ented RecommendationNone.

FIXED ASSETSObiectiveDetermine whether fixedsset depreciation expenses chargndWraparound Programs were allowable underhe County contract, docum enteand billed accurately.



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Child and Fam ily Guidance Center Page 5VerificationWe interviewed Agency personnel and reviewedhe Agency's fixed assets.n addition,we reviewed $55,289 in depreciation expenses o DMH and the WraparoundProgram.ResultsCFG C's fixed assets depreciation expensesere charged appropriatelyo the DMHand Wraparound Programs.

RecommendationNone.

PAYROLL ANDERSONNELObjectiveDetermine whether payroll expenditures were che DMH and WraparoundPrograms appropriately.n addition, determine whether the Agency personnel files as required.VerificationWe reviewed DM H and Wraparound Program-related pa$16,361, for 11 employees for the period ending August 1emp loyees' personnel files.ResultsCFGC chargedhe DMH $7,390 and the Wraparound Procosts. Specifically, CFG C:

Charged DM H and Wraparound5,732 and $5,786, respectively, in salaries for employees who workedn multiple programs, without docum eno support thallocations to the programs. Specifically,FGC used predetermined rathe four emp loyees' payroll costs, insteadf actual hours workedn each program.Charged DMH $1,658 for 100% of an employee 's payroll costs.he employeeperforms general accounting and administrative functionsor all the Agency'sprograms.



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Child and Family Guidance Center Pane 6

RecommendationsCFGC management:5. Provide documentation to support the $5,732, or reduce their FY2010-11 DMH program expenditures by $5,732.6. Provide documentation to support $5,786, or repay DCFS for anyunsupported amount.7. Allocate the administrative employee's salary, including the $1,658,to all benefitted programs, and reduce the FY 2010-11 DMH payrollexpenditures by the amounts allocated to non-DMH programs.8. Bi ll payroll expenditures based on actual hours worked each day byprogram.9. Ensure that shared payroll expenditures are appropriately allocatedamong al l benefited programs.

COST REPORTObiectiveDetermine whether CFGC 'sY 2009-10 DMHost Report reconciled to accounting records.VerificationWe traced the Agency'sY 2009-10 DMHost Report to the Agency 'srecords.ResultsCFG C's cost report reconciledo the Agency 's accounting records.

RecommendationNone.



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AttachmentPage 1 of 6Sari Scheer, ChoirCommunity Advocate

Ron nie Weissman, Vice ChoirKalser Perm anenteKarineh Mo mdlan, TreosurerKaiser Perma nente

Linda Drescher, SecretoryTravelers Services ufSouthern CaliforniaMarilyn AjaNorrhrop Grumrnan

Joyce L BarklnBarkln, Perren,Schrvager & Doia n, LLPEric M. BookMorgan StanleySmith Barney

Melissa BroadwellMatadors Comm unityCredit UnionShekhar Chlkha likar, ESQSNC Lavr Office

Ramon Escobedo,Jr.Napa Street SchoolRobert Garcia, Jr., E5QLaw Offices o fJeMey C. Mclntyre

Stephen H. Howard, Ph.D.Ciinical PsychologistJanice KyserWellPoint, lnc.

Scott Londo nI(PMG, LLPMyies M. Mattenso n, E5QChristine A. McClane, ESQLaw & Mediation Offices ofChristine A. McClane

Deborah M. Neal, Ed. D.Los Angeles Unifi edSchool DistrictBenjamin PotterStroock & Strooclc& Lavan, LLP

Geliy Y. ValeroLavryers Paralegal nc.Bill WinkelrnannAnheuser-Busch

Roy Marshall, M.P.A.Presidenf CEOJeff Adlerh.D.Directoro fOperations

DucTuDirector ofFinanceKath leen Welch-Torres, Ph.D.Directoro fPrograms

Main Address9650 Zelzah AvenueNorthridge, CA 91325-2003818.993.931 1

April 6,201County of L os Angeles .Depa rtment o f Auditor-Controller500 W. Temp le Street, Room 525Los An geles, California 900 12Attn: We ndy L.WatanabeAuditor, Controller

Re: ChiId and Family Guidance CenterMWWraparoundCompliance ReviewThis is in reference to the report 6.om the Auditor-Controllerconcern ing the Child and Family Guidanceenter(CFGC) ComplianceReview, specifically regardingm I an d DCFS Wraparound P ro aa mFiscal Review.We are pleased with the generally positive outcond minor findingson the draft report. We appreciate constructiveuggestions andrecommendations whichill help us continue our high standard o fcom pliance and services tour clients, childrennd families forlmost50 years.We concur with the auditor's Results and Recomm endatio~lswhich areas follows:Staffing Qualifications:Each en~ployeen our sample possessedhe qualifications req uired toprovide the services billed.o recommendations.Expenditures:Guidance Center's expenditures were allowable, accuratendsupported by docunlentation as required. No recommendations.Fixed Assets:Guidance Center's fixed assetsnd equipment listing appropriatelyidentified adequately safeguardedhe 20 items. N o recomm endations.Cost Report:Guidance Center's Costeport reconciled to the Agency's accoun tingrecords. No recommendations.

31 0 East Palmdale BouievardPalmda le, CA 93 550661.265.8627


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AttachmentPage 2 of 6

We take exceptionsn some ofhe findings as specified in our respon ses beIow:FINDINGS - COST ALLOCATION:Allocated $69,899nd $4,868 to the DMII and Wraparoun d Programs, respectivelyfor sharedrogsam expenditures without docum entation to support methodologies.RESPONSE:Data used for allocationere interim. W e revised our allocation basis basednupdated dataor August 2010 YTD per the Timesheets implemented Februa2011 (as noted in the corrected actionlan at the end of this letter).ence, theoriginal basis for the68, 899 and $4,868 questioned costs allocationre accordinglyrevised and correctedith support and documentation.PINDINGS - PAYROLL AND PERSONNELCharged $5,732n FY 20 10-11 for four employees' payroll expendituresho worlcedon multipIe programs without docum entationo support the allocation ratesed tochasge their payroll expenditures to therogram. Specifically, Guidance Center predetermined rateso charge four employees' payroll costs instead 0~u.sworked on each program.Charged the Wraparoundrogranl$5,786 for five employees'ayroll expenditureswho worlced in multiple programs withoutocun~entationo su pport the allocationrate used tohasge their pa j~r oll xpenditures to tlie program. Specifically, GuidanceCenter used predetermined rates to charge the five employees'ayroll costs instead ofa c la l hours worked onach program.Charged D M 3 $1,658 for 100% ofne em ployee 's payroll expenditures1 1 0performs general accountingnd administrative functions.RESPONSE:CFGC folIowed procedures acceptednd deemed compliant in previous similaraudits. The abovem entioned questioned payroll costsre valid andocumentedpayroll expenses. Actual costsf staff were traced tond supported by payrollrecords. Staff workn a daily asis based on initial time assignments approved heDirectors/Supervisors. Cost allocations based on finalnd actual activity of therespective staffs reflected in th e timesheets and the Personnel ActivitylSalayallocation worksheets.The above are in accordanceith OMB Circular A-122Cost Principles foron -Profit Organizations: Supportf salaries and wages, Section(a) "The report must be


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signed by the individual employeer by a responsible supervisoryfficial having firsthand lu-iowledge of the activity performe d by the eniployee, thathe distribution ofactivity representsreasonable estimate of the actual workerformed by theemployee during the periods coveredy the reports."The Centers in compliance that the "Expenditures shall be supportedy properlyexecuted payroll, time records, invoices, vouche rs,r other official documentationevidencing in proper detailhe na ture a nd prop riety oEt11e charges".Notwithstanding the above,e appreciate the Aud itor Controllers suggestionnd wewill continueo stay in compliance andnsur e that all payroll costsre based onactual hours and all shared expenditures are appropriately inong allbenefited programs.As of February 2011,we hav e implemented these of new timesheets toecordactual hours spent by individual emp loyees to various Cost-Centers.histimesheets were applied retroactively from the beginning of the yearndchanges in the financialeport were effected accordingly.UNSPENT WRAPAROUND REVENUE

For the program year e nding April 30,2010, the Guida nce Center'snspentWraparound funds totaled $88,202 and program expenditures559,454. A s aresult, Guidance Centers allowed to reserve $55,94510% of $559,454) foruW eWraparound use and is requiredo return the $32,25 7 ($88,202 - $55,945) in e xcessfunds to DCFS as required by the County contract. Subsequent to our revieGuidance Center reserved the 555,945 in their restricted account for futureWraparound programse.RESPONSE:The Guidance Centeras able to effectively control and monitorosts whiledelivering quality Wrap around services resultingn the surplus. However,e willcomply with the Auditor-Controller toet u n tl ie excess h nd s in accordanc e with tlleWraparound contract.e hav e reserved the $55,945 in our restricted accountorfuture Wraparound program use.RECAPOF RECOMMENDATIONS ANDRESPONSE:1. Guidance Center manag ement ensures that Assessments and ClientarePlans are completed in accorda nce with the County contract.See attached response and corrective action.


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2. Guidance C enter inanagement repay DCPS $32,257.CFGC will repay DCFS $32,257, upon receiptf verified billing.

3. Provide documentation to support the $68,899 and reduce their F Y 2010-11DME Pro gra m expendi tures by the unsupported am ount .The $68,899 costse valid, allowable expenses.his will bee-allocated based ontimeshee ts supporting cost allocations implem ented effectiveebruary 2011.Documentation and supporting details will be provided onr before the annuaI D mFY 10-1 lC os t Repoi-t closing.

4. En sur e that allocation methodologies a r e supp orted by ade qua tedocumentat ion.CFGC will ensure that allocation metho dologiesre supported by adequatedocum entation, primarily by the timeshe ets showing acfxal time distributiony cost-center and using theses support for cost allocation.

5. Provide documeritation to support the $5,732 or reduce their FY 2010-11program expenditures by $5,732.The $5,732 costs are valid payroll expense s.his will be re-allocatedased ontimesheets supporting cost allocations implemented Docum entations and supporting details wille provided onr before the annual.DMHFY 10-1 1 Cost Reportlosing.

6. Provide documentation to support $5,786 or repay DCFS for unsupportedamount .The $5,786 costs arealid payroll expenses. Thisill be re-allocated basedntimeshee ts supporting cost allocationsmplemented effective February 2011.Suppoi-ting detaiIs and docum entationsill be provided onr before thennual DMHFY 10-1 1 Cost Report closing.

7. Allocate the adm inistrativ e employee's sala ry including the $1,658 to a11benefited programs and reduce the FY 2010-11 payroll expenditures by theam oun ts altocated to non-DMH pro, rams.We have re-allocated the administrativemploy ee's including the $1,658o allbenefited programs and adjusted theY 10-1 1 payroll expendituresy the amounts.


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AttachmentPage 5 of 6CORRECTWEPLAN OF ACTIONStartin g February 201, CFGC has developed and implemented new timesheets,hichare designed to klly compIy with the Auditor-Controller requ&ements, specifically tocaptu re actual tinle spent by individual staffor every program and for given period.We will use the new timesheets goingorward. For cost allocation andupport for theFiscal Year 2010-1,we will usehe timesheets, establish percentagesnd apply the timeallocations retroactively to the beginning of the Fiscal Year (July 2010o tlie present).Such mer l~odo logy (per agreed-uponrocedure by Susan IGn, Auditor-ControllerPrincipal Accountant andP Pentecostes, CF GC Finance Manager) wille consistentwith the recommendations for morecceptable s a h y cost distributionnd costallocation.Retroactive revisions aren progress and supporting details will be provided afterlosingof the annual FY 10-11 Cost Report.

Sincerely,

DueTuFinance Director


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Auditor-CormtrollerAudit 20 18 - Clinical PartResponse and CorrectiveAction PlanChild and Family Guidance Center3D~!Ei/WraparoundCompliance Review

Findings:1. T[le assessments did no t adequately describe the symptoms and behaviors to support the disgaosis.2. Th e CCCPs did no t eontnin specific and measurable objectives.

identified Barriers:A. A number of clinicians fail to understand the importonce of f u l l y documenting rbe DSM IVdiagostic criteria in support of their diagnosis, tlte requirement o f ~ s t ab l i s hm en lMedical:Necessity, and/or the EPSDT documenlation regulations3. Insufficient avzrsight an d supervision related to t l ~ e ssessment documentationnd th e clinicalloopC. Focw of t r a i n i n ~ s n ESP resulted in limited Lime allocated to QAIQI trainings an d ongoing flowof QA infomiation and communication loap during regular staff meetings jar sther designatedtimes]; pressure af produclivjty.

Corrective Action Plan:Assessment and CCCP training to a t1 staff- with focus on ongoing an d documented (useo f s t a f f attendance signing sheets) fo!low-up by supenfisors/desigdees during staffmeet.ini~s,upervision Ilours, etc.Identify ou r "olfendersloutliars" through reviexv ofdocurnentation and provide illern withextra attention, coaching and oversigh:btThe loop of feedbaclc arid corrective action needsto be tracked.

a Tmining materials and documentation aids available on ou r intranet: there is a link to th eLAC DMH sponsored CCCP raining and L A C DbLU driven Assessment Training inPPoint For staff use. There are em~nples f acceptable CC C P objectives - to be utilizedby supervisors ond staff.Allocate t ime an d crcale strucbre o n a regular bosis in each program t o nddnssconsistently QA!'QI is su ~s , onvey new informalion, fnciiitate rclared discussionr, a n dl~elp taff developlimprove Clinical Expertise in Writing (documentation, compliance,clinical loop, consistency 'of diagnosis, and apprapriare level of care). These meetings area par: ofthe rnandiitory Ql Plan (mny be built-into existing staffmeetings], and m u s t be!QUAC and lor QI Director driven to ensure the consistency an d accuracy of informationconveyed across ih e programs.

0 EstabIisWreinforce a higher level of oversight, supervision and review of documentationin order to i den t i i y the challenges and addrtss them early "in real time" for clinicalexcellence. EB P documentation presentsam e EPSDT isks that need to be manilared.Review routinely a sample of ar;sessrnentsan d CCCPs and luring ~ l ~ e mor discusians in

Ib ih leen Welch-Toms,PI1.D.Director of Programs

la audit-child and family guidance center (2011)

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