Purpose

To determine whether the costs claimed by Lifespire, Inc. (Lifespire) on its Consolidated Fiscal Reports (CFR) were valid and consistent with contract terms and in accordance with the Consolidated Fiscal Reporting and Claiming Manual (CFR Manual). The audit covered the two fiscal years ended June 30, 2015.

Background

The Office for People With Development Disabilities (OPWDD) is responsible for coordinating services for more than 128,000 New Yorkers with developmental disabilities, including intellectual disabilities, cerebral palsy, Down Syndrome, autism spectrum disorders, and other neurological impairments. It provides services directly and through a network of approximately 750 nonprofit service providing agencies, with about 80 percent of services provided by private nonprofits and 20 percent provided by State-run services. One of these nonprofit service providing agencies is Lifespire.

Lifespire provides assistance to individuals with mental developmental disabilities. Formed in 1951, the organization now provides services in multiple locations throughout New York State: 82 in New York City, one in Westchester County, one in Greene County, and one in Ulster County. Lifespire operates 118 residences and offers 75 day programs in areas such as habilitation, supported employment, and residential, behavioral, prevocational, mental health, and family support.

Lifespire receives funding from Medicaid, OPWDD, the Office of Mental Health, and the U.S. Social Security Administration. Lifespire’s funding from OPWDD is a combination of Medicaid and State appropriations. For the fiscal year ended June 30, 2014, Lifespire claimed $91.8 million ($82.1 million Medicaid and $9.7 million State) on its CFR, while for the fiscal year ended June 30, 2015, Lifespire claimed $94.8 million ($84.6 million Medicaid and $10.2 million State). Lifespire’s programs were funded 90 percent by Medicaid and other programs and 10 percent by State funds. This audit focused on the State funds for non-Medicaid costs.

Key Findings

For the two fiscal years ended June 30, 2015, we identified $167,041 in claimed costs that did not comply with the CFR Manual’s requirements and recommend such costs be disallowed. The ineligible costs consisted of $70,129 in personal service costs and $96,912 in other than personal service costs.

Among the ineligible costs identified were:

• $70,129 for personal service costs. Lifespire did not provide time records to support the hours worked for 44 employees. We also identified errors in the calculation of hours worked and a lack of supervisory approval on the hardcopy documents.
• $64,051 for obligations that were created after the end of the contract year, which is not allowed per contract terms. Our conclusions are based on a review of all 408 family reimbursement transactions for fiscal years 2014 and 2015, which determined that the purchase order dates of 137 transactions were after the end of the contract year (June 30, 2014 or June 30, 2015), making the expenses ineligible.
• $18,500 in vehicle-related expenses for vehicles assigned to individuals or programs (except for the CEO and CFO) without Board approval, as required.

Key Recommendations

To OPWDD:

• Review the recommended disallowances resulting from our audit and make the appropriate adjustments to the costs reported on Lifespire’s CFRs and its reimbursements.
• Review Lifespire’s supporting documentation to ensure that it is following all contract/program guidelines and regulations.

To Lifespire:

• Ensure that costs reported on future CFRs comply with the requirements in the CFR Manual and contract terms.

Other Related Audits/Reports of Interest

Office for People With Developmental Disabilities: Association for the Advancement of the Blind and Retarded – Options for People Through Services Program (2011-S-11)
Office for People With Developmental Disabilities/The Association of Neurologically Impaired Brain Injured Children, Inc.: Compliance With the Consolidated Fiscal Reporting and Claiming Manual (2013-S-60)