COUNTY OF LOS ANGELES DEPARTMENT OF AUDITOR-CONTROLLER

KENNETH HAHN HALL OF ADMINISTRATION 500 WEST TEMPLE STREET, ROOM 525 LOS ANGELES, CALIFORNIA 90012-3873 PHONE: (213) 974-8301 FAX: (213) 626-5427
WENDY L. WATANABE
AUDITOR-CONTROLLER ASST. AUDITOR-CONTROLLERS

ROBERT A. DAVIS JOHN NAlMO JAMES L. SCHNEIDERMAN JUDl E. THOMAS

November 4,201 1

TO:

Supervisor Michael D. Antonovich, Mayor Supervisor Gloria Molina Supervisor Mark Ridley-Thomas Supervisor Zev Yaroslavsky Supervisor Don Knabe Wendy L. Watanabe Auditor-Controller

FROM: SUBJECT:

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&An<

$ @

CHILD AND FAMILY GUIDANCE CENTER A DEPARTMENT OF MENTAL HEALTH AND DEPARTMENT OF CHILDREN AND FAMILY CONTRACT COMPLIANCE SERVICES CONTRACT PROVIDER REVIEW

We 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 2010-11. The Department of Mental Health (DMH) contracts with CFGC to provide mental health services, including interviewing Program clients, assessing their mental health needs, and implementing treatment plans. The Department of Children and Family Sewices (DCFS) also contracts with CFGC to provide Wraparound Approach Services (Wraparound) Program to children and their families, including therapy, housing, education, and social assistance. The purpose of our review was to determine whether CFGC provided services in accordance with their County contracts. We also evaluated the adequacy of the Agency's accounting records, internal controls, and compliance with federal, State, and County guidelines. DMH paid CFGC approximately $19 million on a cost-reimbursement basis for FY 2009-10. DCFS paid CFGC approximately $648,000 on a fee-for-service basis for FY 2009-10. The Agency's headquarters is located in the Third Supervisorial District.

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Board of Supervisors November 4,201 1 Page 2 Results of Review DMH Program Review CFGC maintained documentation to support the services to DMH, and the staff billed However, the Agency assigned DMH Program to the had the required qualifications. did not complete some elements of and Client Plans as Assessments Care the required by the DMH contract. CFGC1s attached response indicates that the Agency will provide and Client Care Plan staff, and increase to all their and oversight training supervision. DMH and DCFS Wraparound Programs Fiscal Review

Assessm

CFGC maintained adequate and their controls direct over Program cash, expen were generally allowable, properly and accurately billed. documented, However, CFG charged $80,559 and $19,984 in questioned the DMH costs to and Wraparound Program, respectively, and did not return to $32,257 DCFS. Specifically, CFGC: Allocated $69,889 DMH the to Program shared expenditures for documentation to support the allocation methodologies. CFGC's attached the DMH Program based response indicates that $68,899 to the the Agency on timesheets their cost allocation. to support without

Charged $5,732 and $5,786 in payroll expenditures DMH and Wraparound to the Programs, respectively, to support the documentation without allocation to charge payroll expenditures the Programs. to CFGC's attached response the Agency indicates and Wraparound DMH ($5,732 + $5,786) to the support cost allocations. their willthat reallocate based on Programs timesheets

rates

the to

Charged DMH $1,658 for 100% of August for an employee's 2010 pay. However, the employee performs and administrative accountingfor the general functions Agency, and the salary should have all programs. allocated been CFGC1s attached response indicates payroll expenditures all benefited among that programs. the Agency

amo

reallo

At the end each of Wraparound year, the Program Agency allowed is to retain unspent funds ten percent of their Program expenditures to up for futu Wraparound Program use. any unspent The Agency funds must in excess of return

Board of Supervisors November 4,201 1 Page 3 ten percent accounting Program any unspent to

For Program Year ending April 30, CFGC's 2010, DCFS. the records indicated to retain that they in unspent $55,945 were allowed and should funds, have returnedDCFS. CFGC to $32,257 did not return funds to DCFS.
response indicates repay DCFS. will that the Agency

CFGC's attached

Details of our

review,

along

with for corrective recommendations action,

are

attac

Review of Report

We discussed the results of our review with CFGC, DMH, and response indicates that they re-allocated their administr benefitted programs, will re-allocate $80,417 to + $5,732 + $5,786) the DMH ($68,899 and Wraparound and return Programs, $32,257 in unspent Both funds departments will work to ensure the CFGC with Agency implements the recommendations in our report. We thank CFGC Please me call if you have (213) 253-0301. management and assistance their for cooperation during any your staff may contact Don Chadwick at questions, or our

Attachment Chief Executive Officer c: William T Fujioka, Phillip Browning, Interim Director, DCFS Dr. Marvin J. Southard, Director, DMH Sari Scheer, Board CFGC Chair, Roy Marshall, President and CEO, CFGC Public Information Office Audit Committee

AND FAMILY GUIDANCE DEPARTMENT HEALTH AND DEPARTMENT OF CHILDREN AND OF MENTAL FAMILY SERVICES' WRAPAROUND PROGRAMS FISCAL YEARS 2009-1 AND 2010-11 0 BILLED SERVICES Objective
Determine services contract. Child and whether Family the Department of Mental billed to Guidance Health

CHILD

CENTER

Agency) provided the Center (CFGC or (DMH) in DM14 accordance

Verification

We selected 50 billings, totaling minutes, 5,676 from 998,457 of service approved Medi-Cal January billings and for February the most 2010, current which w billings available at the time of our review (September the 2010). Assessments, Care Plans Client and Progress inNotes clients' the maintained charts for the selected billings. The services provided to 20 program represent 5,676 minutes participants.

Results
CFGC Progress some contract. maintained documentation the billed as Notes required the DMH by contract. elements Assessments the of and services,completed the and to support However, complete CFGC not Client Care DMH by the Plans

as

Assessments

Nine (45%) of the 20 client Assessment forms not adequately reviewed the describe did symptoms and behaviors consistent Diagnostic with Statistical the and ofManual Mental Disorders as required by the (DSM), DMH contract. The DSM published by the American Psychiatric Association for menta which lists different mental orders categories the criteria for diagnosing and of them. Client Care Plans Ten (50%) 20 Client of the Plans reviewed Care required the DMH by contract. did not contain as

client-specif

AUDITOR-CONTROLLER COUNTY OF LOS ANGELES

Child and Family Guidance Center Recommendation 1.

Page 2

CFGC management ensure that Assessments Client Care Plans and are completed in accordance with the County contract. STAFFING QUALIFICATIONS

Obiective

Determine services.
Verification

CFGC's treatment whether

staff

had

the

required

qualificat

We reviewed the California Board website and/or Behavioral of the personnel treatmentwho provided staff, to DMH services clients files for 17 of the 190 CFGC during January and February 201 0.
Results

Scien

Each

employee
Recommendation None.

the qualifications reviewed

had

required servicesto the

provide billed.

UNSPENT WRAPAROUND PROGRAM REVENUE

CFGC's Wraparound Approach Program (Wraparound) Services Department of Children and Family unspent revenue percent up to ten Wraparound operating of their Agency is required place to the excess a reserved in funds Wraparound Program expenditures. of ten in excess returned to the County.

contract the Services to retain (DCFS) expenditures. for future account percent Any be must funds

records that indicate For the Program Year ending April 0, CFGC's accounting 30, 201 they had unspent Wraparound $88,202, and funds, Program totaling expenditures (10% of $55,945 $559,454) totaling $559,454. As a result, isCFGC allowed to retain for future Wraparound expenditures, have returned the remaining $32,257 and should to DCFS. CFGC did for future reserve not ($88,202 - $55,945) Wraparound Program or returnexpenditures,in excess funds to DCFS. $32,257 the Subsequent our review, to future Wraparound CFGC $55,945 in their reserved Program use. the restricted for account

AUDITOR-CONTROLLER COUNTY O F LOS ANGELES

Child

and

Familv

Guidance

Center

Page 3

Recommendation 2. CFGC management CASHIREVENUE Objective repay DCFS $32,257.

Determine the Agency's

Verification

the Agency whether records

deposited properly.

cash

receipts

in timely, and

We interviewed CFGC and reviewed management, also reviewed bank reconciliations three 2010. for

the July

Agency's records. We financial

CFGC deposited cash timely, and

Recommendation None. COST Obiective

recorded

revenue

properly.

ALLOCATION PLAN

Determine the Agency's Cost Allocation whether was prepared in compliance with Plan the DMH and Wraparound the Agency used the Plan and to that contracts, allocate shared expenses appropriately.
Verification

We reviewed the Agency's Cost Plan, and Allocation selected shared expenses, 16 totaling $95,376, incurred during July and toAugust 2010, ensure that the were allocated the Agency's among programs appropriately.

expenditure

CFGC's Cost Allocation Plan However, CFGC allocated without payroll records or allocate the expenditures.

complies with the DMH $68,899 in Fiscal Year (FY) to the 2010-1 DMH Prog 1 time reports to to support

AUDITOR-CONTROLLER COUNTY OF LOS ANGELES

Child and Family Guidance

Center

Paqe 4

During service. Agency actual

contract year, DMHa negotiated CFGC rate based on pays unit of per However, if the Agency's Program revenue exceeds the its must the excess DMH revenue. repay The Agency reports expenses in their annual Report. Cost

the

Recommendations CFGC management:

3.
4.

Provide DMH documentation the $68,889, and reduce their to support FY 2010-1 DMH Program 1 expenditures by any unsupported amount. Ensure that allocation documentation. EXPENDITURES methodologies by are supported adequate

Objective

Determine allowable
Verification

the DMH and Wraparound whether under their County

Program contracts,

related documented

exp

We interviewed documentation $95,798, incurred

Agency personnel, and for and Wraparound ten DMH non-payroll during July 0. and 201 August

reviewed expenditure

CFGC's expenditures
Recommendation None.

were

allowable,

documented

properl

FIXED ASSETS Obiective

Determine Wraparound and billed

asset whether Programs accurately.

depreciation expenses and charged fixed the County allowable were contract, under documented

AUDITOR-CONTROLLER COUNTY OF LOS ANGELES

Child and Family Guidance Center Verification We interviewed we reviewed Program. Results CFGC's fixed assets and Wraparound Recommendation None. PAYROLL Objective Determine Programs personnel files as Verification We reviewed DMH and Wraparound $16,361, for 11 employees for the employees' personnel files. Results CFGC costs. charged the DMH Specifically, $7,390 and CFGC: the Wraparound Program-related period ending PERSONNEL AND Agency $55,289

Page 5

personnel the Agency's and fixedInreviewed addition, assets. in depreciation to DMH and the Wraparound expenses

charg

depreciation were charged expenses appropriately to the DMH Programs.

whether payroll expenditures and Wraparound the DMH were appropriately. In addition, determine whether the Agency required.

charged main

August 11

payroll 31,

Program

Charged DMH and Wraparound $5,732 and $5,786, respectively, in salaries for nine employees who multiple on worked programs, withoutsupport documentation to the allocations to the programs. used CFGC Specifically, predetermined rates the four employees' payroll of actual hours costs, worked on instead each program. Charged DMH $1,658 for 100% of an employee's payroll costs. employee The performs general accounting and administrative all the for Agency's functions programs.

AUDITOR-CONTROLLER COUNTY OF LOS ANGELES

Child and Family Guidance Center Recommendations CFGC management: 5. 6. 7.

Pane 6

Provide documentation to support the $5,732, or reduce their FY 2010-11 DMH program expenditures by $5,732. Provide documentation to support $5,786, or repay DCFS for any unsupported amount. Allocate the administrative employee's salary, including the $1,658, t o all benefitted programs, and reduce the FY 2010-11 DMH payroll expenditures by the amounts allocated to non-DMH programs. Bill payroll expenditures based o n actual hours worked each day by program. Ensure that shared payroll expenditures are appropriately allocated among all benefited programs. COST REPORT

8.
9.

Obiective

Determine accounting
Verification

whether 2009-10 FY CFGC'sCost Report DMH records.

reconciled

to

the

We traced records.
Results

the FY 2009-10 Agency's

Cost Report DMH

to

the

Agency's

CFGC's

cost

report the Agency's to reconciled

accounting

records.

Recommendation None.

AUDITOR-CONTROLLER COUNTY OF LOS ANGELES

Attachment Page 1 of 6

Sari Scheer, Choir Community Advocate Ronnie Weissman, Vice Choir Kalser Permanente Karineh Momdlan, Treosurer Kaiser Permanente Linda Drescher, Secretory Travelers Services uf Southern California Marilyn Aja Norrhrop Grumrnan Joyce L Barkln Barkln, Perren, Schrvager & Doian, LLP Eric M. Book Morgan Stanley Smith Barney Melissa Broadwell Matadors Community Credit Union Shekhar Chlkhalikar, ESQ SNC Lavr Office Ramon Escobedo, Jr. Napa Street School Robert Garcia, Jr., E5Q Law Offices of JeMey C. Mclntyre Stephen H. Howard, Ph.D. Ciinical Psychologist Janice Kyser WellPoint, lnc. Scott London I(PMG, LLP Myies M. Mattenson, E5Q

April 6,20 11 County of Los Angeles . Department of Auditor-Controller 500 W. Temple Street, Room 525 Los Angeles, California 900 12 Attn: Wendy L.Watanabe Auditor, Controller

Re: ChiId and Family Compliance Review

Guidance DMWWraparound Center

This is in reference to the report 6.om the Auditor-Controller concerning the Child and Family Center(CFGC) Compliance Guidance D m I and DCFS Wraparound P r o a a m Review, specifically regarding Fiscal Review. We are pleased with the generally minor findings and positive appreciate suggestions and constructive on the draft report. We will help uswhich our high standard of continue recommendations compliance and services our clients, to children and families almost for 50 years. We concur with the auditor's Results and Recommendatio~ls which are as follows: outcome

Christine A. McClane, ESQ Law & Mediation Offices of Christine A. McClane

Deborah M. Neal, Ed. D. Los Angeles Unified School District Benjamin Stroock & Strooclc & Lavan, LLP Geliy Y. Valero Lavryers Paralegal Inc. Bill Winkelrnann Anheuser-Busch Roy Marshall, M.P.A. Presidenf/CEO Jeff Adler Ph.D. Director o f Operations DucTu DirectorofFinance Kathleen Welch-Torres, Ph.D. Director o f Programs Main Address 9650 Zelzah Avenue Northridge, CA 91325-2003 818.993.931 1
31 0 East Palmdale Bouievard

Potter

Staffing Qualifications: Each en~ployee our in sample the qualifications required to possessed provide the services billed. No recommendations. Expenditures: Guidance Center's expenditures supported by docunlentation as required.
were No allowable, and accurately recommendations.

Fixed Assets: Guidance Center's fixed assets and equipment listing appropriately identified adequately the 20 items. No recommendations. safeguarded Cost Report: Guidance Center's reconciled to the Agency's accounting report Cost records. No recommendations.

Palmdale, CA 93550

661.265.8627

Attachment Page 2 of 6

We take

exceptions on some

the of findings as specified in our responses beIow:

FINDINGS - COST ALLOCATION: Allocated and $4,868 to the DMII and Wraparound $69,899 for shared progsam expenditures without methodologies. RESPONSE: Data used for were interim. We revised our allocation allocation updated for August 2010 YTD per the Timesheets data 2011 (as noted in the corrected Plan ataction of this the end original basis $68, 899 and $4,868 for the questioned revised and with support and documentation. corrected PINDINGS - PAYROLL AND PERSONNEL Charged in$5,732 10-1 1 for FY 20 four employees' payroll who worlced expenditures on multipIe programs without to support the allocation documentation used to rate chasge their payroll expenditures Specifically, the program. to Guidance Center predetermined to charge rates four employees' payroll instead h0~u.s costs worked on each program. Charged the Wraparound Progranl$5,786 for five employees' expenditures payroll programsdocun~entation support the allocation without to who worlced in multiple chasge to paj~roll their expenditures to tlie program. Specifically, rate used Center used predetermined rates to charge the five employees' payroll costs instead a c l a l hours worked program. each on 100%one employee's payroll of Charged D M 3 $1,65 8 for performs general and administrative accounting RESPONSE: expenditures ~110 functions.
basis on based implemented letter). the Hence, arecosts accordingly allocation February

Programs, documentation

respectively to support

th

used of

Guidance of

CFGC folIowed procedures and deemed compliant in previous accepted similar audits. The abovementioned questioned are valid documented and payroll costs payroll expenses. Actual were costs supported by payroll of staff and traced to records. Staff a daily on work based on initial basis time assignments the approved is based on actual activity of the and final Directors/Supervisors. Cost allocation respective as reflected in the timesheets and the Personnel ActivitylSalay staff allocation worksheets.
The above are in with OMB Circular accordance Profit Organizations: of salaries and wages, Support
- A-122 Cost

by

Principles NonSection report must be 2(a) "The

for

Attachment Page 3 of 6
signed by the individual or by a responsible employee official having supervisory hand lu-iowledge of the activity performed by the eniployee, the distribution of that activity represents a reasonable estimate of the performed by the actual work employee during theby the reports." periods covered first

the "Expenditures by properly be supported shall The Center compliance that is in executed payroll, time records, other invoices, or official documentation vouchers, evidencing in proper the nature and propriety oEt11e charges". detail Notwithstanding we appreciateabove, the the Auditor Controllers and we suggestions ensure that and all payroll based costs are on will continue in compliance to stay actual hours and all shared expenditures ainong all are appropriately benefited programs.
As of February 2011, we have implemented use of new the timesheets record to Cost-Centers. This actual hours spent by individual employees to various timesheets were applied retroactively from the beginning of the and year changes in the report were effected financial accordingly. UNSPENT WRAPAROUND REVENUE

allo

For the program year ending April 30,2010, the Guidance unspent Center's Wraparound funds totaled $88,202 $559,454.program and As a result, Guidance is allowedCenter to reserve $55,945 $559,454) (10% of EuWe for Wraparound use toand return the $32,257 ($88,202 - $55,945) in excess is required contract. Subsequent funds to DCFS as required by the County account for Guidance Center reserved the 555,945 in their restricted Wraparound use. program
RESPONSE:

expenditures to our future review,

The Guidance was able to effectively Center control costs while monitor and delivering quality Wraparound in the services we will resulting surplus. However, Auditor-Controllerretun tlie excess hnds in accordance with tlle to comply with the Wraparound We contract. have reserved the $55,945 in our restricted for account future Wraparound program use.

RECAP OF RECOMMENDATIONS AND RESPONSE: 1. Guidance Center management ensures that Assessments Plans are completed in accordance with the County contract.
See attached response and corrective
Care and Client

action.

Attachment Page 4 of 6

2. Guidance Center inanagement repay DCPS $32,257. CFGC will repay DCFS $32,257, of verified upon billing. receipt

3. Provide documentation to support the $68,899 and reduce their F Y 2010-11 DME Program expenditures by the unsupported amount.
The $68,899 wecosts allowable valid, expenses. re-allocated based on This will be allocations implemented February 2011. effective timesheets supporting cost Documentation and supporting details will before the provided m or be annuaI D on FY 10-1 lCost Repoi-t closing.
4. Ensure that documentation.

allocation

methodologies a r e supported by

adequate

CFGC will ensure that allocation are supported by adequate methodologies distribution by costdocumentation, primarily by the timesheets showing acfxal time center and using as support for cost these allocation. 5. Provide documeritation to support the $5,732 or reduce their FY 2010-11 program expenditures by $5,732. The $5,732 costs are valid payroll timesheets supporting Documentations and FY 10-1 1 Cost closing. Report expenses. This will be re-allocated on based cost allocations implemented supporting be provided or before the annual. DMH details on will

effe

6. Provide documentation to support $5,786 or repay DCFS for unsupported amount.

The $5,786 valid payroll are costs expenses. will Thisre-allocated be on timesheets supporting cost implemented effective February 2011. allocations Suppoi-ting detaiIs and documentations be provided or before will on annual DMH the FY 10-1 1 Cost Report closing. 7. Allocate the administrative employee's salary including the $1,658 to a 1 1 benefited programs and reduce the FY 2010-11 payroll expenditures by the amounts altocated to non-DMH pro,-rams. We have re-allocated benefited programs the employee's including administrative the all$1,658 to FY and 10-1 adjusted 1 payroll the expenditures by the amounts. based

Attachment Page 5 of 6
CORRECTWE PLAN OF ACTION
Starting February 1, CFGC has developed and implemented 201 newwhichtimesheets, are designed to k l l y compIy with the Auditor-Controller requ&ements, specifically to capture actual tinle spent by individual for every program and for given period. staff

forward. For cost allocation going support for the and We will use the new timesheets Fiscal Year 2010-1 will 1, we the timesheets, use establish and apply the time percentages allocations retroactively to the beginning of the Fiscal Year to tlie present). (July 2010 Such merl~odology (per agreed-upon procedure by Susan IGn, Auditor-Controller JP Pentecostes, CFGC Finance Manager) consistent will be Principal Accountant and with the recommendations acceptable s a h y cost for more distribution cost and allocation.
Retroactive revisions in progress and supporting details will be provided are of the annual FY 10-11 Cost Report. closing after

Sincerely,

Due Tu Finance Director

Attachment Page 6 of 6

Auditor-CormtrollerAudit 20 18 - Clinical Part Response and Corrective Action Plan

Child and Family Guidance Center 3D~!Ei/WraparoundCompliance Review
Findings:
1. T[le assessments did not adequately describe the symptoms and behaviors to support the disgaosis. 2. The CCCPs did not eontnin specific and measurable objectives.

identified Barriers: A. A number of clinicians fail to understand the importonce of fully documenting rbe DSM IV diagostic criteria in support of their diagnosis, tlte requirement o f ~stablishmenl Medical: Necessity, and/or the EPSDT documenlation regulations 3. Insufficient avzrsight and supervision related to t l ~ e assessment documentation and the clinical loop C. Focw of trainin~s ESP resulted in limited Lime allocated to QAIQI trainings and ongoing flow on of QA infomiation and communication loap during regular staff meetings jar sther designated times]; pressure af produclivj ty. Corrective Action Plan:
Assessment and CCCP training to at1 staff- with focus on ongoing and documented (use signing sheets) fo!low-up by supenfisors/desigdees during staff meet.ini~s, supervision Ilours, etc. Identify our "olfendersloutliars" through reviexv ofdocurnentation and provide illern with
o f s t a f f attendance

attention, coaching and oversigh:bt The loop of feedbaclc arid corrective action needs to be tracked. Tmining materials and documentation aids available on our intranet: there is a link to the LAC DMH sponsored CCCP training and LAC DbLU driven Assessment Training in PPoint For staff use. There are em~nples acceptable CC CP objectives -to be utilized of by supervisors ond staff. Allocate time and crcale strucbre o n a regular bosis in each program t o nddnss consistently QA!'QI issu~s, convey new informalion, fnciiitate rclared discussionr, and l~elp staff developlimprove Clinical Expertise in Writing (documentation, compliance, clinical loop, consistency 'of diagnosis, and apprapriare level of care). These meetings are a par: ofthe rnandiitory Ql Plan (mny be built-into existing staffmeetings], and must be! QUAC and lor QI Director driven to ensure the consistency and accuracy of information conveyed across ihe programs. EstabIisWreinforce a higher level of oversight, supervision and review of documentation in order to identiiy the challenges and addrtss them early "in real time" for clinical excellence. EBP documentation same EPSDT risks that need to be manilared. presents Review routinely a sample of ar;sessrnentsand CCCPs and luring ~ l ~ e m discusians in for
extra

Ibihleen Welch-Toms, PI1.D. Director of Programs