Purpose

To determine the extent of implementation of the seven recommendations included in our original report, Youth Facility Chargeback Rates to Localities (2009-S-20).

Background

Our initial audit report, which was issued on March 21, 2012, examined whether chargeback rates used by the Office of Children and Family Services (OCFS) were calculated appropriately, and whether OCFS had been collecting the appropriate reimbursements from localities. We found that OCFS calculates juvenile facility chargeback rates correctly. However, in general, OCFS has been deficient in revising its rates in a timely manner, as well as in billing and collecting million of dollars in required reimbursements from localities. We also found that, as of August 2010, OCFS officials had yet to collect at least $40 million that should have been billed and collected in prior years.

Key Findings

• Officials made considerable progress in ensuring all costs are accurately included in the calculation of the annual chargeback rates.
• A comprehensive User Manual has been developed, which outlines how the rates should be calculated and all the costs that should be included when performing the calculation. Hard copies of the user manual are available to staff who are responsible for calculating the annual chargeback rates; an electronic copy is available to other staff on a shared network drive.
• Additionally, OCFS has made considerable progress in perusing outstanding receivables and has been annually revising rates as required. However, officials reiterated that they will not be revising rates for 2006 or 2007 or rebilling localities for those years.

Key Recommendation

• Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review.

Other Related Audit/Report of Interest

Office of Children and Family Services: Youth Facility Chargeback Rates to Localities (2009-S-20)