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Audit Committee Finds Large Discrepancies in Payments For At-Risk Youth

(L to R) Court Rosen, Chris Morrill, and Brian Townsend discuss the not so pleasant accounting situation at City Hall.

by Valerie Garner

During last Wednesday’s Audit Committee meeting city auditor Drew Harmon stressed to the committee that the scope of the CSA audit was for a very narrow period and a very narrow population of children. “It is indisputable that the city was billed for services that were not provided,” said Harmon.

The Comprehensive Services Act (CSA) was established in 1992 to assist troubled and at-risk youth up to age 21. The majority of referrals come from the Department of Social Services. Councilman Sherman Lea is Chair of the Audit Committee. Court Rosen and Vice-Mayor Dave Trinkle are members.

There are no penalties when vendors bill for services not rendered. They do have to reimburse for any overbilling that is uncovered. The vendors claim “administrative errors,” not “criminal intent to defraud.”  Out of 38 invoices tested, 26 percent of them were identified as billed for services not provided and 45 percent were not properly completed by the vendor.

In Roanoke the average age of youth served is 13 years old. By the third quarter of 2011 there were 401 children who received over 2000 services at a cost of $24,406 per child. During 2010 there were 613 children who received services at a total cost of $14 million.

The interface between the city’s computer system and the state’s system is a software program known as “Harmony.” The Department of Finance submits reimbursement requests to the state monthly. There is $20,000 budgeted to upgrade the Harmony software to make it more efficient.

The process was outlined in a detailed flow chart that covered four pages of the handout to the Audit Committee. Add in multiple agencies and vendors and it doesn’t take long to determine that there is a daunting level of complexity. Reducing the number of steps is a goal. “The more steps, the more opportunities there is for problems,” said City Manager Chris Morrill.

The audit report identified 70 invoices for 36 children who were confined at the Roanoke Valley Juvenile Detention Center in 2009. One invoice could not be located by Social Services. Dates were missing from 31 of the remaining 69. “Obviously they can’t be seen for services if they are in confinement,” said Harmon.

Of 38 service invoices that had dates, 10 invoices were billed for children that were confined. It was determined with certainty the vendor could not have seen them.

“One thing that stands out to me is that we are still struggling to have a complete record of care … we still haven’t achieved that with CSA,” said Harmon.

Jane Conlin, director of social services, said there were confidentiality issues in sharing data between agencies. There is nothing in place that can separate out viewing only certain data.

Harmon suggested a closer look at the Harmony software “because in 2003 it was supposed to address this issue … I’m not sure we are using nearly all the capabilities of it.”

City Manager Chris Morrill gave an overview of CSA and the improvements made in the process since 2009. Morrill said, “There are fewer kids in the system and we’re achieving that by a much better prevention program.”

Assistant Manager Brian Townsend explained that the case manager decides the type of service provided to the child and by whom. After three months in a program the child is evaluated to see if it is working. At that point the services provided can be modified.

Harmon said they would look at the processes with a more thorough audit in 2012. He said, “an important thing to consider [would be] a true sense of what the frequency is.”

Rosen found it hard to believe that the billing for services not rendered were administrative errors. He suggested the results of the audit be submitted to the commonwealth attorney. Harmon said he did provide a copy of the report to Don Caldwell, the commonwealth attorney. These issues have been noted in other localities and the state will be looking more closely at the issue, he said.

In addition to child protective services checks, contracts with vendors will require employees to undergo DMV and criminal background checks. Vendor reports have scant information and Conlin said vendors would be instructed to give more detailed reports.

Lea said, “I still haven’t heard the answer to the question … 26% does that mean intent here?” Harmon responded that “we have to be careful – innocent until proven guilty. The police chose not to pursue it due to the difficulty in proving intent.” Harmon did say that, “just from a practical standpoint I feel like it’s hard to say that it was administrative errors.”

Angela Hodnett, Human Services Business Administrator, said she encourages staff that “if you see a problem your job is to ask questions.”

Harmon, though acknowledging improvements have been implemented in social services to eliminate billing errors, felt in his opinion, “there was a mindset that we need to get these paid – we need to get reimbursed – we need to keep things moving.”

Lea said, “we have to be sure this doesn’t happen again. That mind-set has to be gone. The process looks bad. There were checks and balances and it happened anyway. That is difficult to explain.”


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