Compliance with Wraparound program requirements

Recommendations 4

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  program revenues are determined independent of program spending and service level decisions; and,
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  not all staff time spent on the program was recorded on time sheets and billing records, according to Department of Mental Health representatives, resulting in under-stated expenditures. As discussed above, Wraparound program revenues are generated based on the rates that would be paid for each child in a service allocation slot based on their RCL if that child were placed in a group home. Since the program was initiated in El Dorado County in FY 2002-03, average group home rates for the program participants and revenues generated have ranged from $2,719 to $7,900 per child per month. Program expenditures, on the other hand, are determined based on decisions about services and support levels made by Department of Mental Health management and staff, with input from the children’s families and support team. The revenues for each child remain the same regardless of services and goods provided through the Department of Mental Health. As shown in Table 3.5, $173,244 of actual life of program total revenue collected for the program through June 2005, or 21.8 percent of total revenue, was not expended during those three fiscal years2. The budgets for the three year period, on the other hand, assumed program expenditures would exceed revenues. When the $173,244 in unspent revenue collected is combined with the $182,484 in revenue that could have been collected if all service allocation slots had been filled during the life of the program through June 2005, a total of $355,728 ($173,244 + $182,484) in program funding could have been used for services to at risk children. To assess Department representations regarding poor time-keeping and billing records, a review of a sample of client service authorization documents, staff time sheets and staff billing was conducted as part of this audit. This review confirmed that staff time dedicated to the program has not been well documented and that more hours of staff time were provided to program participants than cost records indicate. Since many of those staff hours were not reimbursed by Wraparound program funds, it appears that other Department funds were covering those services inappropriately. While this resulted in under-expenditures of Wraparound program funds, it also means that funding that could have been used for other Department of Mental Health purposes was not available since it was used to cover Wraparound program services. This $173,244 in unspent available funds is different than the previously discussed $182,484 in funds never recovered for the program due to the County not filling all program service allocation slots Harvey M. Rose Accountancy Corporation 24 Section 3: Wraparound program fiscal management Reported Wraparound program staff costs increased dramatically and exceeded budget in FY 2004-05 after two years of being significantly under budget Detailed Wraparound program expenditures and revenues are presented by year in Table 3.6. As can be seen, actual revenues were substantially less than budgeted revenues each year of the three years reviewed. Actual expenditures were substantially less than budgeted amounts for FYs 2002-03 and 2003-04 but were near equal in FY 2004-05. In FY 2004-05 the Department made partial use of the program’s $327,692 end of year fund balance from FY 2003-04 which allowed actual expenditures to be greater than actual revenues. While some variation between budgeted and actual expenditures can be expected, the unexpended amount, $173,244, represents a significant level of services that could have been but were not provided to at risk children in El Dorado County. Table 3.6 Budgeted and Actual Revenues and Expenditures Wraparound Program FYs 2002-03 through 2004-05 FY 2002-03 FY 2002-03 FY 2003-04 FY 2003-04 FY 2004-05 FY 2004-05 Budget Actual Budget Actual Budget Actual Beginning fund balance - - $158,501 $127,365 $327,692 SB 163 claimed revenue $365,604 $188,916 $431,568 296,096 325,000 287,442 Other revenue - 16,772 2,378 2,000 4,630 Total revenues $365,604 $205,688 $431,568 $456,975 $454,365 $619,764 Expenditures: Salaries and benefits 20,000 4,775 60,000 10,912 274,505 304,547 Department non- personnel costs 1 23,104 - 24,568 524 24,468 11,230 Professional services 2 250,000 38,600 270,000 115,145 132,000 123,130 Client goods & services 3 52,500 3,812 57,000 2,702 19,050 2,793 Internal services 4 20,000 - 20,000 - 4,342 4,820 Total expenditures $365,604 $47,187 $431,568 $129,283 $454,365 $446,520 Ending fund balance - $158,501 - $327,692 - $173,244 Sources: Department of Mental Health financial reports, and Wraparound program participant records. Department of Human Services Foster Care claim records. Expenses for materials & supplies for department operations such as office supplies, photocopiers, postage, etc. Expenses for services provided to participant children by Sierra Family Services and other contractors rather than in-house staff. Expenses for non-departmental goods and services provided to children participants and their families such as lessons for the children, and transportation services for families as determined through staff and family Wraparound interactions. Expenses for centralized County services provided to the Department of Mental Health such as information systems support, personnel services, etc. For the first two fiscal years of the program, revenue and expenditure budget assumptions were extremely inaccurate. As shown, it was assumed that Department of Mental Health Harvey M. Rose Accountancy Corporation 25 Section 3: Wraparound program fiscal management staff would provide very little direct service, as represented by the Salaries and Benefits line items, and that most program services would be provided by outside contractors through the Professional Services budget line item. Actual expenditures were much lower than budgeted for both in-house staff and outside contractors, reflecting lower services levels than what was expected by Department of Mental Health management. In FY 2004-05, the situation changed drastically and the cost of staff time charged to the program increased from $10,912 in FY 2003-04 to $304,547, which exceeded the $274,305 budgeted for salaries and benefits. For the first time since the program commenced, contractor services were near the amount budgeted. Revenue assumptions were still inaccurate but the difference between budgeted and actual revenues was not as great as in the previous two years. A comparison of reported salary and benefits expenditures with the number of children served in the same years shows that expenditures per child were unrealistically low in FYs 2002-03 and 2003-04 and increased significantly in FY 2004-05. As shown in Table 3.7, each child would have received only an average of 1.2 hours of staff time per month in FY 2002-03 and 1.3 hours in FY 2003-04, followed by an increase to 37.3 hours per month if these cost records are correct. This is not consistent with service plans for the participating children or staff billing records. The fact that such low expenditures were recorded for two consecutive years followed by a dramatic increase in FY 2004-05 is an indicator of a lack of management oversight of the Wraparound program and its costs. Table 3.7 presents actual average staff salary and benefit expenditures per child per month based on the reported amounts for each fiscal year reviewed. Table 3.7 Department of Mental Health Average Reported Salary & Benefits Costs per Wraparound Participant FY 2002-03 through 2004-05 FY 2002-03 FY 2003-04 FY 2004-05 Reported salary & benefits expenditures $4,775 $10,912 $304,547 Average # total children served/month 7.5 15.1 15.1 Average cost/child/month $57.88* $60.22 $1,680.72 Hours of service/child/month @ $45/hr** 1.2 1.3 37.3 Source: Department of Mental Health financial reports * 11 months only in FY 2002-03 as program started in August of that year. ** Estimated average hourly rate for salaries and benefits of Mental Health Department staff. Not adjusted for annual differences. Actual expenditures for Client Goods and Services, items identified by the participant children, their families and support groups and County staff as being in the best interests of keeping the children out of group homes, totaled only $9,307, or 7.2 percent of the $146,156 budgeted for this purpose and 1.5 percent of the $622,990 total program expenditures during the three years reviewed. A key part of the Wraparound program is Harvey M. Rose Accountancy Corporation 26 Section 3: Wraparound program fiscal management having flexible funds available for services and goods other than County staff time that are not typically provided by government programs if it is determined by the child, their family and support team that such goods and services will be most effective in helping keep the child from being placed in a group home. Though the amounts spent in this way have been minor, the County has used some program funds for items such as karate lessons, food, gas and car repair for participating families. The records show that the County’s approach to the program has been primarily to provide direct staff services rather than goods and services from external sources. It is not clear if these choices of services reflect what participating families want as the service plan records do not document family wishes for the participating child in many instances. Conclusion The County has not consistently filled all of its six authorized Wraparound program service allocation slots since the program was implemented in August 2002. Since State and local program funding is directly related to the number of slots filled, the County has not collected the maximum amount of funding that it could have had all slots been filled. Lost program funding between FYs 2002-03 and 2004-05 was approximately $182,484 that could have provided services to an estimated additional 18.7 children over the life of the program through June 2005. The County has significantly over-budgeted revenues and expenditures for the program, indicating that fiscal management oversight has not been adequate. Actual program funding and service levels have been substantially less than anticipated in the annual program budgets since FY 2002-03. Besides recovering less Wraparound program funding than anticipated, the County did not expend $173,244 over the life of the program in funding that was available for the program and could have been used to provide services. The funds are in reserve and can still be used for the program but it is not clear why the funding has not been used to provide services as it was received. Combined with the $182,484 in funds not recovered due to unfilled service allocation slots, the County forewent $355,728 worth of services that could have been provided to children at risk of group home placement during the three years reviewed. Recommendations Based on the findings presented in this section, it is recommended that the El Dorado County Board of Supervisors: 3.1 Direct the inter-departmental Wraparound management team and Chief Administrative Officer to review the Wraparound program FY 2005-06 revenue and expenditure budget, its assumptions about the number of children to be served, slots to be filled, actual number of “slotted” and non-revenue generating children served and actual revenues and expenditures year-to-date and report back to the Board within six weeks on whether adjustments should be made to make the budget more realistic. Harvey M. Rose Accountancy Corporation 27 Section 3: Wraparound program fiscal management 3.2 Direct the inter-departmental Wraparound management team and Chief Administrative Officer to prepare a budget plan each year based on the actual revenues and expenditures for the previous year and documented assumptions about the number of children to be served, both slotted and discretionary non- revenue generating, and the nature of services to be provided in the budget year. 3.3 Direct the inter-departmental Wraparound management team to at least quarterly monitor actual program revenues and expenditures and number of children served for comparison to the budget. 3.4 Direct the Chief Administrative Officer to separately present the Wraparound program budget each year in the proposed Department of Mental Health budget document presented to the Board of Supervisors and to include planned and previous year actual numbers of slotted and discretionary non-revenue generating children program participants, hours of staff service provided, contractor service hours and expenditures for unique external goods and services. 3.5 Direct the inter-departmental Wraparound management team and Chief Administrative Officer to develop an expenditure plan for the approximately $173,244 Wraparound program fund balance and transmit the plan to the Board of Supervisors for review. Costs/Benefits The costs of implementing the above recommendations will be mostly in the form of staff time. The benefits of the recommendations will include improved financial information for the Board of Supervisors, the public and program managers. Revenue and expenditure assumptions will be disclosed in public budget documents, enabling decision-makers to make adjustments to program operations when needed and to allocate resources and determine more realistic service levels than has been the case in the past three fiscal years. Harvey M. Rose Accountancy Corporation 28
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  Wraparound program fiscal management q State and local funding is provided to the County’s Wraparound program based on the number of “service allocation slots” filled by children participating in the program. Between its inception in August 2002 and June 2005, the County authorized six service allocation slots per month but filled an average of only 4.8. As a result, the County did not collect an estimated $182,484 in available program funding that would have enabled services to an additional 18.7 children. q In addition to under-recovered available revenue, program expenditures were approximately $173,244 less than actual funding received during the three fiscal years reviewed. These unspent funds have been carried over each year and are still available for the program, but reflect lower service levels for program participants and unnecessary encumbrance of County General Fund monies during the review period. Combined with the $182,484 in funds not recovered due to unfilled service allocation slots, the County did not provide $355,728 worth of Wraparound services that could have been provided during the three fiscal years reviewed. q During the three years reviewed, actual Wraparound program revenues were $327,938 less than budgeted revenues and actual program expenditures were $628,547 less than budgeted. These substantial variances reflect a lack of program planning and oversight by Mental Health and Human Services Department executive management. q Total reported Department of Mental Health salary and benefits costs for Wraparound were only $4,775 and $10,912 the first two years of the program, respectively, but increased to $304,547 in FY 2004-05. Department of Mental Health staff report that staff time sheet and billing records did not capture all staff time dedicated to the program in its first two fiscal years. If actual staff costs were higher than the amounts charged to program funds, those program costs were covered by other Department funding sources, inappropriately curtailing other services. q Though encouraged by the Wraparound program concept, only $9,307, or 1.5 percent of total program expenditures during the three fiscal years reviewed, have been spent on unique goods and services jointly identified by program participants, their families and County staff as being in the best interests of the child. Most of the program funding has been used for traditional County staff-provided services. State Wraparound program law allows counties to apply for State foster care funding to be used flexibly in combination with County funds to provide services and goods to children who are designated by the county as being at risk of being placed in group homes. The amount allocated to the program per child is equal to what would otherwise be provided for their placement in a group home. Like all counties, rates paid by El Harvey M. Rose Accountancy Corporation 19 Section 3: Wraparound program fiscal management Dorado County to group homes and other residential placement facilities are pre- approved by the State and vary depending on the subject child’s Rate Classification Level, or RCL, a standardized classification system for children in placement that measures their overall emotional and mental condition and determines the type of facility and services they need. Children placed higher on the RCL scale are provided higher levels of services and are thus reimbursed at a higher rate. In El Dorado County, one of the higher level group home rates is $5,994 per month, or $71,928 per year. El Dorado County is required by the State to cover 60 percent of what would be paid for group home placements for Wraparound program participants and the State provides 40 percent. For the group home rate of $5,994 per month, the County would be responsible for $3,596 per month, or 60 per cent of the total, and $43,156.80 per year per child. The County has authorized six “service allocation slots” for the program, meaning State and County funding is provided each month to the program based on up to six children participating in the program. If all six slots were filled with children at the $5,994 monthly rate, the County’s annual obligation would be $258,940.80. Table 3.1 presents this distribution of costs. Table 3.1 Distribution of County and State Wraparound costs for children with a $5,994 monthly placement rate State County Total Distribution 40% 60% 100% Cost per month $ 2,397.60 $ 3,596.40 $ 5,994.00 Cost per year $ 28,771.20 $ 43,156.80 $ 71,928.00 If six slots filled $172,627.20 $258,940.80 $431,568.00 County expenditure and revenue records show that the combination of State funds received and County funds allocated to the Wraparound program have been less than the amount that would have been available if all six slots were filled. This is explained by two factors: 1) the program has rarely had all six slots filled for a full month; and, 2) the participating slotted children are not always classified or reimbursed at the highest group home rate because they don’t always meet the highest RCL standards1. An additional factor besides the rate of the participating child is that 50 percent of any placement costs incurred for the child are not reimbursed by the State. Harvey M. Rose Accountancy Corporation 20 Section 3: Wraparound program fiscal management Table 3.2 presents the actual average number of slots filled per month since the program began, the funds allocated to the program, and the average funding level per month per child. It is not surprising that children participating in the program are classified at a mix of RCL levels and are thus reimbursed at different rates. The fact that there have consistently been fewer than six children assigned to the program’s service allocation slots represents a difference between Department management plans and actual program performance. Table 3.2 Actual Wraparound Program funding, number of slots filled and average funding per slot 2002-03 2003-04 2004-05 Total State/County funds allocated 1 $188,916 $296,096 $287,442 Average # slots filled per month 4.2 5.3 4.9 Average program funds per slot/month 2 $4,107 3 $4,627 $4,872 Sources: Department of Mental Health financial reports, and Wraparound program participant records. Department of Human Services Foster Care claim records 1 Amounts shown are annual allocations and do not include interest earnings on fund balances. Averages may be different than if manually calculated due to computer rounding of average number of slots filled per month. Program operated for only 11 months in FY 2002-03. The difference in program funding between what was actually allocated and what would have been available if all slots had been filled is presented in Table 3.3. As can be seen, the County could have had an estimated $182,484 more available over the three years for the Wraparound program if all six program slots had been filled. Table 3.3 Program funding if all Six Service Allocation Slots had been Filled 2002-03 2003-04 2004-05 Total Actual average # slots filled 4.2 5.3 4.9 4.8 Average program funds per slot/month 1 $4,107 $4,627 $4,872 $4,421 Actual State/County funds allocated $188,916 $296,096 $287,442 $772,454 Program funding if all six slots filled $271,053 2 $333,108 $350,777 $954,938 Difference $82,137 $37,012 $63,335 $182,484 Sources: Department of Mental Health financial reports, and Wraparound program participant records. Department of Human Services Foster Care claim records 1 Averages may be different than if manually calculated due to computer rounding of average number of slots filled per month. Program operated for 11 months only in FY 2002-03. Harvey M. Rose Accountancy Corporation 21 Section 3: Wraparound program fiscal management Determining the number of children affected by the County not recovering the additional $182,484 to which it was entitled requires first identifying the total number of children participating in the program. Besides the six authorized service allocation slots that can be filled by a qualified child, the County provides Wraparound program services to other children who are at risk of being placed in a group home but for whom the risk is not considered imminent. During the three year review period, the County has provided Wraparound services to an average of 9.1 non-revenue generating children per month in addition to the average 4.8 children assigned to the service allocation slots, for an average total of 13.9 children per month. As shown in Table 3.4, average actual expenditures per child per month were $1,281 during the review period and average length of stay for program participants was 7.6 months per child. On that basis, the additional $182,484 in program funds would have translated in to services for 18.7 more children from the inception of the program in August 2002 through the end of June 2005, as presented in Table 3.4. Table 3.4 Number of children who could have been served if Wraparound program had recovered full funding FYs 2002-03 through 2003-04 a. Actual average service allocation slots/mo. 4.8 b. # non-revenue generating participants 9.1 c. # slots & non- revenue generating children/mo. = (a+b) 13.9 d. Total actual expenditures $622,990 e. # months of program 35 f. Average actual expenditures per child per mo. 1 = (d/e)/c $1,281 g. Average length of participation/child 7.6 mos. 1 h. Un-recovered program funds $182,484 i. # children that could have been served per month w/ unspent funds = (h/f)/g 18.7 Sources: Department of Mental Health financial reports, and Wraparound program participant records. Department of Human Services Foster Care claim records. Based on actual participant children records. Harvey M. Rose Accountancy Corporation 22 Section 3: Wraparound program fiscal management Wraparound program revenues and expenditures have been significantly less than the amounts budgeted Besides under-recovering program funding, Table 3.5 shows that actual revenues and expenditures have been substantially less than the amounts budgeted over the life of the program. As a result, a substantial amount of program revenue that was expected and planned for the program, as reflected in the program’s budget each year, was not collected or spent. As shown in Table 3.5, actual revenues for the three fiscal years starting in FY 2002-03 were $796,234 or $327,938 less than the $1,124,172 budgeted. Actual expenditures during the same time period were $622,990, or nearly half the amount budgeted. Table 3.5 Total Wraparound Program Revenues and Expenditures FYs 2002-03 through 2004-05 (35 months) Budgeted Actual Difference Revenues 1 $ 1,124,172 $ 796,234 $ 327,938 Expenditures 1,251,537 622,990 628,547 Under/(over) expenditures (127,365) 173,244 (300,609) % revenue unspent -11.3% 21.8% -91.7% # Service allocation slots 6 4.8 1.2 Revenue/slot/month 2 $5,353 $4,739 $614 Expenditures/slot/month $5,960 $3,708 $2,252 Sources: Department of Mental Health financial reports, Wraparound program participant records. Department of Human Services Foster Care claim records. Revenues include interest earned on fund balances over the three fiscal years reviewed. Based on 35 months of program operations. As shown in Table 3.5 and as previously discussed, an average of only 4.8 service allocation slots were filled each month rather than the six authorized. Reimbursement averaged $4,739 per month per slot rather than $5,353 assumed by the Department of Mental Health for budgeting purposes, reflecting lower average RCL classifications of program participants than assumed for the program budget. The significant difference between budgeted and actual expenditures represents a lower level of service compared to what Department management expected and allowed for in the program budget each year of the review period. Average expenditures per service allocation slot assumed in the budgets of the three years reviewed was $5,960 per month but actual expenditures were only $3,708 per service allocation slot per month, or $2,252 less than the amount assumed in the budget. These actual expenditures amounted to only 62 percent of the average expenditure amount per slot assumed in the program budget. This difference indicates either a lower level of service for program participants than management expected and/or a lack of management attention to program performance and fiscal matters. Harvey M. Rose Accountancy Corporation 23 Section 3: Wraparound program fiscal management The Wraparound program under-spent program funds available Besides collecting less revenue than planned and budgeted for the program over the three year review period, the Department of Mental Health under-spent the funds that were collected by $173,244. There are two primary explanations for this variance:
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  Wraparound Program Records q Claims for State Wraparound funding are filed by the Department of Human Services each month as part of its larger claim for Foster Care funding. A review of Department records showed that there is sufficient supporting documentation for the Wraparound program claims filed between FY 2002-03 and 2004-05. q The Department of Mental Health’s Wraparound program accounting, timesheet and other records do not provide sufficient information to determine if program funding has been properly accounted for since the program’s inception. A new record-keeping system implemented in February 2005 has improved this situation but since it was not in place for the first two and a half years of the program, it is not possible to accurately determine actual program costs during that time or the source of funding for all services provided. q A review of Department of Mental Health time sheets and contractor billings for four randomly selected months showed that actual staff hours and costs were higher than recorded in the Department’s financial records. Time and cost records were not compiled or reviewed by program managers prior to February 2005 to ensure that program funding was appropriately used and accounted for. q Program records are maintained reporting the number of children assigned to service allocation slots but there is no documentation of the number of children considered for Wraparound service allocation slots who were not accepted in to the program. There is no documentation at all of the number of other at risk children considered for and accepted in to the program who are not assigned to service allocation slots. Such information should be recorded to document that all children in the program meet the eligibility criteria and to determine if adjustments are needed to the number of service allocation slots authorized by the County. q A review of treatment plans and time sheets for four randomly selected months showed variances between services planned for children in the program and what was actually delivered. While there may be valid reasons to divert from original treatment plans as a child’s situation changes, a comparison of planned to actual staff and contractor hours and services should be regularly prepared to ensure that program resources are being allocated effectively. Claims to the State for Wraparound funds The Department of Mental Health is the primary service provider for the Wraparound program. Department staff provides individual therapy, one-on-one mental health Harvey M. Rose Accountancy Corporation 29 Section 4: Wraparound Program Records services, group therapy, family therapy and case management services to children in the program, as well as indirect services such as program administration. Direct services are also provided by private organizations under contract to the Department. As explained in Section 3 of this report, funding for the program is comprised of State foster care monies combined with a mandatory County General Fund contribution. The State monies are obtained through the County’s monthly foster care claim. The claim is prepared by the Department of Human Services and submitted to the State Department of Social Services which then reimburses the County for the claimed amount with a combination of Federal and State funds. A County contribution is also required to cover total foster care costs. The County’s claim for Wraparound program funding is based on the number of children assigned to the six County-authorized service allocation slots. Funding provided for Wraparound, however, is for only the State portion of what would be reimbursed if the child were placed in a group home. The State funding covers 40 percent of that cost with the remaining 60 percent covered by the County. Unlike most other Foster Care programs, no Federal funds are provided for the Wraparound program. Services provided to program participants covered by Medi-Cal are deducted from the claimed amount. To obtain State Wraparound funding, the Department of Human Services compiles documents showing the names and other information about the children assigned to the service allocation slots, including their Rate Classification Level (RCL) and what rate they would be charged if placed in a group home. A sample of such documents from four months from FY 2002-03 through 2004-051 were reviewed as part of this audit to ensure that claims were properly documented and consistent with Department of Mental Health service and cost records. Documentation reviewed included a sample of the claims forms and all back-up materials regarding the children in the Wraparound program, their RCL levels and their group home rates. The documentation reviewed showed that the Department had sufficient records to support the amounts claimed for the program. Journal entry records showed that the amounts claimed were combined with County General Fund monies and transferred to the Department of Mental Health for the Wraparound program as required by State law. Department of Mental Health Wraparound services provided and staff costs cannot be fully determined from Department time sheets and billing records For reimbursement from Medi-Cal and other third party payers, Department of Mental Health clinical staff are required to keep track of their time by patient and type of service provided. This time accounting system has been in place since before the Wraparound program was implemented in 2002, indicating that records should be readily available showing staff hours charged for services provided to Wraparound program participants. Unfortunately, such records are not available because the Department did not distinguish 1 Claims documents from January 2003 through June 2005 were reviewed. Harvey M. Rose Accountancy Corporation 30 Section 4: Wraparound Program Records Wraparound program participants from other Department clients in their billing records until February 2005. The only way to determine staff hours provided to Wraparound children participants is to go through individual monthly client services statements and extract the hours of service received that were billed to Wraparound. This was apparently never done during that time and, as a result, staff costs billed to Wraparound were lower than actually incurred in FYs 2002-03 and 2003-04. A review of a sample of client services statements and staff time sheets from the three review years indicates that the cost of most staff hours allocated to the Wraparound program were not charged to the program. As discussed in Section 3 of this report, that means that other Department of Mental Health funding sources that could have been used for other purposes were unnecessarily used for Wraparound program costs. In FY 2004-05, the Department’s salary and benefits costs charged to the program increased significantly as a system was implemented of charging a fixed amount of Department staff costs to Wraparound regardless of how much staff time was actually allocated to the program. Current Department staff does not have documentation on how these charges were determined as this was done under the jurisdiction of staff no longer employed at the Department. As a result, the legitimacy of the staff costs charged to the Wraparound program between July 2004 and January 2005 cannot be determined. In February 2005, the method of charging staff time to the Wraparound program was changed again as a result of a new Memorandum of Understanding (MOU) executed that month between the Departments of Mental Health and Human Service. The MOU requires the Department of Mental Health to track staff time and prepare monthly invoices detailing the hours of service provided and other costs incurred, by child. As a result of this change, records now exist that detail how much staff time is spent and what costs are incurred providing services to Wraparound program participants. A determination can be fairly readily made of the legitimacy of costs charged to the program since this new cost accounting system was implemented. Records of children admitted to the Wraparound program are incomplete As discussed earlier in this report, children in the Wraparound program are either assigned to one of the County-authorized service allocation slots or they are accepted in to the program as non-revenue generating participants who are deemed by Department of Mental Health staff to be at risk of group home placement that is not considered imminent. State and local funding for the program is derived from the number of filled service allocation slots. To the extent that the funds generated exceed the amount expended on the children assigned to the slots, they are used for services for other non- revenue generating children. As discussed in Section 2, assignment to service allocation slots is made by the Placement/Referral subcommittee, comprised of representatives of the County Departments of Mental Health, Human Services and Probation and the County Office of Education. Subcommittee meeting minutes show the names of all children assigned to Harvey M. Rose Accountancy Corporation 31 Section 4: Wraparound Program Records service allocation slots each month as well as any children entering or exiting the slots. The subcommittee discusses and approves the children identified as entering the system. What is not recorded in the subcommittee minutes or any other program documents is the children who are referred to the program but are determined to be ineligible or inappropriate for the program. This information should be compiled by the Department to determine if there is sufficient capacity in the program compared to need and for internal control purposes to demonstrated that all children considered for the program are evaluated by the same criteria. There are no records documenting the eligibility and admission to the program for the children not assigned to service allocation slots. Rather than a documented process, these children are admitted through informal staff processes. While this approach probably results in admission of many qualified children to the program, it raises questions about how their risk of group home placement was determined, how many other children the staff considered and why they were not admitted to the program and how relative need is determined among children considered. Without clear criteria for admission to the program and a documented process for considering candidates, the potential is raised that not all children eligible for the program are being admitted or that different criteria are used for different children. In considering how many service allocation slots the County authorizes and how program resources are allocated, it is important for program staff to know and document total need for the program and it is important for the public to know that there is a standardized process to determine eligibility for admission to the program, either in a service allocation slot or as a non-revenue generating participant. The number of children referred to the program and the number accepted should be documented, regularly reviewed by the program staff and periodically reviewed by the executive management team. Discrepant treatment plans and client service records should be evaluated to assess program capacity and resource allocation An assessment is conducted and a treatment plan prepared for each child receiving services from the Department of Mental Health or its contractors. A sample of treatment plans for children in the Wraparound program were reviewed from four months from the first three fiscal years of the program’s operations and compared to client service statements, which report actual hours of service provided by individual child2. A comparison of these documents showed discrepancies which in some cases, meant that the Wraparound program children did not receive the level of service detailed in the plan or, in other cases, more services than included in the treatment plan. While changes in needs and services should be expected, compiling and comparing plan and actual service hours data would be a useful exercise for the program as it would allow for a determination of service capacity relative to need. As discussed in Section 3 2 Detailed records were reviewed from November 2002, August 2003, April 2004 and May 2005. Harvey M. Rose Accountancy Corporation 32 Section 4: Wraparound Program Records of this report, Department of Mental Health budget records show that the Wraparound program under-spent its available funding between FYs 2002-03 and 2004-05 by approximately $173,244. That would indicate that more of the services in the service plans not provided could have been, assuming that the children still needed the originally prescribed services. On the other hand, because of the unreliable program cost records maintained by the Department between FY 2002-03 and February of FY 2004-05, it could also be true that the Department did not have the capacity to provide the services it was prescribing. The Department could improve its ability to align its capacity with its service plans. The Department should start each fiscal year with an estimate of available staff hours based on an assumed number of program participants and funding and incorporate this information into service plans so that services prescribed are reasonable relative to funding available and so that children receive services at or near the level prescribed in their treatment plans. Conclusion The County obtains State funding for the Wraparound program as part of the Department of Human Services’ monthly claims for foster care reimbursement submitted to the State. A review of a sample of claims and supporting documents conducted for this audit showed that the Department has sufficient documentation about the program participants to justify the amounts claimed. Department of Mental Health time sheet and cost records are not adequate to determine actual program costs and services provided prior to February 2005 when a new time and cost tracking system was implemented. While the new system is an improvement, other Wraparound program records are not being maintained to adequately document program costs, services and eligibility and admissions procedures. Records are not maintained of the number of children eligible for the program who were not admitted. No records are maintained regarding which children are admitted to the program but not assigned to service allocation slots or children considered but not admitted to the program. Program participant mental health treatment plans are not consistent with actual services delivered in many instances, possibly indicating a lower level of service than planned. Plans should be updated to reflect changes in prescribed services as conditions change and prepared in conjunction with an inventory of available service provider resources. Harvey M. Rose Accountancy Corporation 33 Section 4: Wraparound Program Records Recommendations Based on the above findings, it is recommended that the Board of Supervisors: 4.1 Direct the inter-departmental Wraparound management team to include in its annual program evaluation provided to the Board of Supervisors: statistics on the number of children referred to and considered for the program; the number and