Juvenile Assessment Center and

Wayne County Department of Children and Family Services

Contract Compliance Audit Report
December 1999 – December 2003

SUMMARY AND ASSESSMENT OF

CORRECTIVE ACTION PLAN

Management has
Management’s or Intends to Implementation
Comments on Implement the or Targeted
Auditor General Findings and Management’s Action Recommendation Responsible Implementation Auditor General’s
No. Recommendation Recommendation Taken or Planned Yes/No Person/Area Date Assessment

1. The JAC charge the
applicable rate authorized for
a service only in accordance
with their contract approved
by the County Commission.
Agree with The Juvenile Agency Information System Yes M&B April 2005 The Office of Legislative Auditor
recommendation has been revised to include rates and Finance General reviewed the applicable
services in accordance with the approved Director – revised policies and procedures. If
contract. The Juvenile Assessment Center DCFS and the policies and procedures are
(JAC) has also established billing Executive fully implemented as described, the
procedures that occur prior to the Director, actions taken may be sufficient to
submission of the monthly bill comparing JAC address the recommendation.
billed services to eligible rates, service
names, and any previously billed services.
The JAC also compares the monthly
invoices to a roll up report provided by the
DCFS to ensure there are no duplications
from prior invoices.

2. The Department of Children

and Family Services
determine the amount of This recommendation is included and fully addressed in the OAG’s Corrective Action Plan report for the Department of Children and Family Services, Juvenile
over-payments paid to the Services Division, Controls Over Service Provider Contracts operational audit, dated February 9, 2006, DAP No. 2003-57-017(A).
JAC that should be
recovered, then establish a
repayment plan to recoup the
over-paid amounts.

Office of the Wayne County Legislative Auditor General Page 4 of 14

DAP No. 2004-57-003(C)

Auditor General
No. Recommendation
3. The Department of Children
and Family Services revise
the vendor invoice review
process to include adequate
review procedures to ensure
that proper rates are billed
and approved.
4. The JAC obtain
documentation for each
service rendered and billed,
and maintain it in the youth’s
case file.
Office of the Wayne County Legislative Auditor General
DAP No. 2004-57-003(C)
Juvenile Assessment Center and
Wayne County Department of Children and Family Services
Contract Compliance Audit Report
December 1999 – December 2003
SUMMARY AND ASSESSMENT OF
CORRECTIVE ACTION PLAN
Management has
Management’s or Intends to Implementation
Comments on Implement the or Targeted
Findings and Management’s Action Recommendation Responsible Implementation Auditor General’s
Recommendation Taken or Planned Yes/No Person/Area Date Assessment
Agrees with The finance area in the DCFS has been Yes M&B October 2004 If adequate managerial review
recommendation restructured. In December 2004, a finance Finance procedures are implemented and
director was assigned to the department. Director - functioning as described, they may
However, the finance director and staff DCFS be sufficient to address the
report to the Department of Management & recommendation.
Budget. Monthly invoices are verified by a
finance analyst and subsequently reviewed
and approved by the finance director. In
addition, major improvements have been
made in the JAIS system that facilitates the
department’s ability to monitor and analyze
the invoices.
JAC management stated that the JAIS
The JAC agrees database and not the youth’s file is where Yes Director, April 2005 If actions taken by management are
with all youth service records should be stored. DCFS and fully implemented and functioning
recommendation, The JAC has also established a process to M&B as described, they may be sufficient
with clarification. review all billable JAC services in Finance address the recommendation.
conjunction with the JAIS database record Director -
The DCFS agrees of the services provided. The DCFS DCFS
with the subsequently designated the JAIS system as
recommendation. the location to record youth services
performed. As a result, the department’s
Juvenile Justice Services Handbook was
modified to reflect that all AOD screen
report records must be entered into JAIS by
the JAC. The handbook no longer requires
the record to be included within a youth’s
case file.
Page 5 of 14

Auditor General
No. Recommendation
5. The JAC annually forward to
the DCFS and the Division
of Risk Management
insurance binders
documenting that required
coverages are obtained and
in-force.
6. The JAC determine which
present employees have not
had a background check
performed by the Michigan
State Police and ensure they
are conducted and if
necessary take appropriate
action against employees if
background checks warrant.
Office of the Wayne County Legislative Auditor General
DAP No. 2004-57-003(C)
Juvenile Assessment Center and
Wayne County Department of Children and Family Services
Contract Compliance Audit Report
December 1999 – December 2003
SUMMARY AND ASSESSMENT OF
CORRECTIVE ACTION PLAN
Management has
Management’s or Intends to Implementation
Comments on Implement the or Targeted
Findings and Management’s Action Recommendation Responsible Implementation Auditor General’s
Recommendation Taken or Planned Yes/No Person/Area Date Assessment
Agrees with The JAC has complied with this provision. Yes Finance April 2005 If actions taken by management are
recommendation In addition, the JAC finance director is Director, fully implemented and functioning
responsible for providing proof of required JAC as described, they may be sufficient
insurance coverage upon each policy’s to adequately address the
renewal. The Department of Children and recommendation.
Family Services has met with Risk
Management and both have agreed that
Risk Management will assume
responsibility for ensuring that appropriate
insurance coverage and certificates are
maintained. However, in the meantime, the
department has set up an insurance file and
requested insurance documentation from the
Juvenile Assessment Center.
Agrees with According to the JAC, all current Yes Human April 2002 If actions taken by management are
recommendation employees had background checks. In Resource fully implemented and functioning
addition, since 2002 all JAC employees Director, as described, they may be sufficient
have a record of background checks in their JAC to address the recommendation.
personnel files. All employees that the
Office of Legislative Auditor General
identified as not having a background check
in their file are no longer employed by the
Juvenile Assessment Center.
Page 6 of 14

Auditor General
No. Recommendation
7. The JAC establish and
implement a policy to ensure
all new hires receive
background checks
conducted by the Michigan
State Police prior to their
start date.
8. The JAC determine the
deficiencies in the controls in
the billing preparation
process, modify where
necessary, and then
implement the enhanced
control procedures.
Office of the Wayne County Legislative Auditor General
DAP No. 2004-57-003(C)
Juvenile Assessment Center and
Wayne County Department of Children and Family Services
Contract Compliance Audit Report
December 1999 – December 2003
SUMMARY AND ASSESSMENT OF
CORRECTIVE ACTION PLAN
Management has
Management’s or Intends to Implementation
Comments on Implement the or Targeted
Findings and Management’s Action Recommendation Responsible Implementation Auditor General’s
Recommendation Taken or Planned Yes/No Person/Area Date Assessment
Agrees with In a few instances, the JAC had background Yes Human April 2005 If actions taken by management are
recommendation checks performed by the city of Detroit. Resource fully implemented and functioning
The JAC now has a policy in place to Director, as described, they may be sufficient
ensure that background checks are JAC to address the recommendation.
conducted by the Michigan State Police. In
addition, since 2002 all JAC employees
have a record of background checks in their
personnel files.
Agrees with Both the JAC and the DCFS have instituted Yes Finance April 2005 If actions taken by management are
recommendation manual and automated controls and Director, fully implemented and functioning
safeguards to improve the JAC billing JAC as described, they may be sufficient
process. Additional procedures established to address the recommendation.
include the recording of billable services in
both the JAIS system and the JAC
accounting database. Prior to submitting
the invoices, each billable service is cross-
referenced to prior billings to ensure the
accuracy of the client number and service
date. In addition, system controls have
been implemented that prevents invoicing
for the same item more than once.
Page 7 of 14
 Juvenile Assessment Center and
Wayne County Department of Children and Family Services
Contract Compliance Audit Report
December 1999 – December 2003

SUMMARY AND ASSESSMENT OF

CORRECTIVE ACTION PLAN

Management has
Management’s or Intends to Implementation
Comments on Implement the or Targeted
Auditor General Findings and Management’s Action Recommendation Responsible Implementation Auditor General’s
No. Recommendation Recommendation Taken or Planned Yes/No Person/Area Date Assessment

9. The Department of Children
and Family Services
implement the planned
preventive and detective
controls for the JAIS system.
Agrees with The department has implemented many Yes Director, July 2005 If actions taken by management are
recommendation preventive and detective controls within the DCFS and fully implemented and functioning
JAIS system. Specifically, JAC service M&B as described, they may be sufficient
units have been modified to eliminate Finance to address the recommendation.
inconsistency in services, once the Director -
department authorizes a service; the service DCFS.
is locked within the system. This will
prevent double billing.

Office of the Wayne County Legislative Auditor General Page 8 of 14

DAP No. 2004-57-003(C)
 APPENDIX

Corrective Action Plan

Juvenile Assessment Center
and
Wayne County Department of Children and Family Services
Contract Compliance Audit
DAP No. 2003-57-003(C)
Please find below the joint response of the Wayne County Department of Children and Family Services
(WCCAFS) and the Juvenile Assessment Center (JAC) to the restatement prepared by the Office of the
Auditor General of the recommendations contained in the Wayne County Department of Children and
Family Services Juvenile Services Division Juvenile Assessment Center Contract Compliance Audit dated
November 22, 2004.

Recommendation #1

To ensure the Juvenile Assessment Center charges the correct rate for services billed, we
recommend the JAC: Charge the applicable rate authorized for a service only in accordance
with their contract approved by the County Commission.

The WCCAFS JAIS data system has been revised by WCCAFS for the purpose of matching exactly the service
names in the Wayne County JAIS database used to invoice for the contracted service names and rates in the
County Commission approved contract. This reduces the potential for error or miscommunication regarding a
specific service in the JAC billing procedure.

Unlike previous contracts, the current Wayne County JAC Contract has effective begin and end dates defined in
the contract thus better ensuring a match of eligible contract dates, the contract names for services and the
contract amount eligible for each service reimbursement.

The JAC has established written financial billing review steps for an in-depth internal billing review that occurs
prior to submission of each monthly JAC bill that compares all billed services with eligible rates, service names
and with any previously billed JAC invoices.

WCCAFS now maintains a monthly and fiscal year to date roll up report. A copy of the roll up report is
provided to the JAC. The WCCAFS roll up report provides documentation to the JAC that WCCAFS has
approved the bills submitted by the JAC as eligible for payment. As a final step in quality assurance, the JAC
matches the new JAC invoice to the WCCAFS roll up report to be certain there are no duplications.

Recommendation #2

We recommend the Department of Children and Family Services:

Determine the amount of over-payments paid to the JAC that should be recovered, then
establish a repayment plan to recoup the over-paid amounts.

The Juvenile Assessment Center (JAC) received payments of $529,214 in excess of what the contract allowed
for on-site screens/alcohol and other drug (AOD) pick ups through February 2004. The Department and the
JAC acknowledged the majority of the overpayment and in July 2004 the JAC reimbursed the county $358,854.

At the time of the Audit, the Department acknowledged that the Contract Managers misinterpreted the
contract’s language in this area. We also acknowledged that the payments were not tied to a specific child in the
Juvenile Agency Information System (JAIS) making this area prone to error.

In our professional opinion, the County cannot hold the JAC responsible for the remaining $170,360. This error
can be traced to the newness of the system and the initial flaws that have now been corrected.
It should be noted that the Department has continued to refine the services provided by the JAC (and all other
entities involved in the county’s juvenile justice program). In FY-2005/06 these refinements will result in a
savings of over $900,000.

The County issued an RFP (April 2005) seeking an independent review of the operations of the JAC. Plante
Moran, in partnership with Alan C. Young and Associates, were the sole bidders and will begin their review
momentarily. Findings from this review will guide the development of the Scope of Services for the assessment
RFP currently being developed.

Recommendation #3

The Department of Children and Family Services: Revise the vendor invoice and review process
to include adequate review procedure to ensure that proper rates are billed and approved.

The finance area of the department has been restructured. In September 2004 the Department of Management
and Budget installed a member of their staff as director of the CAFS finance division. In December 2004 a
permanent director (also a member of M & B) was assigned to the department. All current CAFS finance staff
report to this individual, as does the department’s contract staff. In FY 2006/07 this staff will be re-aligned and
become M & B employees.

Monthly invoices are verified by a Finance Department Analyst and subsequently reviewed and approved by
the department’s Director of Finance. Currently no transactions are processed for payment without the Director
of Finance’s signed approval.

This issue is also addressed in the new contracts. In addition major improvements have been made in the
Juvenile Agency Information System (JAIS) that facilitate the department’s ability to monitor and analyze
required performance, for example, the number of service codes have been dramatically reduced and can now
be easily matched with the invoices.

In addition, the department’s executive and finance staff host monthly meetings with CMS and JAC executives
to ensure that financial and programmatic issues are addressed expeditiously.

Recommendation #4

To ensure the JAC complies with other major contract provisions, we recommend the JAC:
Obtain documentation for each service rendered and billed, and maintain it in the youth’s case
file.

It is not practical or in some case even possible to maintain all of the information relating to a youth in
treatment in their individual case files. The JAIS system is the Wayne County data system. It is this
system that WCCAFS requires the JAC to use.

The JAIS database and not the youth’s file is the location of the record of both the contracted service
provision documentation and verification of the JAC’s invoice.

The JAC has established a process to review all billable JAC services in conjunction with the JAIS data base
record of the services provided.

Services that require narrative or clinical documentation are maintained in the youth’s case file.
JAC services that have or are numerical summaries or specialized codes are maintained only in the JAIS
database. In addition other items that reside only in the JAIS database include AOD screen lab results,
psychological evaluation scores and Care Management Track entries and reviews. AOD lab results are
numerous and are recorded and maintained only in the JAIS database.

The JAC data entry staff matches cup numbers supplied by the Lab, used by the JAC for AOD screens, and then
this information is entered into the JAIS database. This information is then printed in a multiple list format and
due to the multiple clients on each printed page are not in each youth’s case file.

The JAIS AOD data can be matched to lab cup numbers in both the Lab’s computer and in the JAIS database to
confirm the accuracy of the information and to prove that the tests were completed.

The Care Management Track for each youth contains each event of utilization in the youth’s treatment path.
The number of these events is huge and consequently they are only recorded and maintained in the JAIS
database. Each CMS is paid based upon these Care Management Track records. The JAIS system has an audit
function that maintains a record of each individual who makes an entry together with the contents of that entry
for each youth in treatment. This information is retained in the JAIS database and is available at any time to
verify the accuracy of the Care Management Track record for each youth in care.

Recommendation #5

The JAC: Annually forward insurance binders documenting that required coverages are
obtained and in-force to the department and the Division of Risk Management.

The JAC has provided all documentation of all insurance coverages required by the Wayne County contract to
WCCAFS by delivery of that information to the Division of Risk Management. The JAC Finance Director has
been given the task of providing to the Division of Risk Management proof of the required coverages upon each
policy renewal.

Under the reengineered county contracting process Risk Management establishes insurance requirements prior
to the release of any RFP or contract. Further, Risk Management is responsible for ensuring that appropriate
insurance coverage and certificates are maintained.

Recommendation #6 and #7

The JAC: Determine which present employees have not had a background check performed by
the Michigan State Police and ensure they are conducted and if necessary take appropriate
action against employees if background checks warrant.

The JAC: Establish and implement a policy to ensure all new hires receive background checks
conducted by the Michigan State Police prior to their state date.

All current employees have background checks and as noted in the JAC response to OAG in November of
2004, it was confirmed by the JAC that since 2002 all JAC employees have a record of background checks in
their personnel file.

Recommendation #8
To strengthen and enhance controls over the billing process, we recommend the JAC: Determine
the deficiencies in the controls in the billing preparation process, modify where necessary, then
implement the enhanced control procedures.

Multiple tiers of manual and automated controls and safeguards have been designed and implemented to correct
to improve the JAC invoice process, as outlined below.

Two primary deficiencies in the control of the JAC billing process were identified by the JAC. The first was
that the use of the Wayne County JAIS database, which is required by WCCAFS, contained flaws that were
unknown to both the JAC and WCCAFS. The discovery of these flaws in the JAIS database that included errors
in client names resulting in duplicate billing led the JAC to create a Quality Assurance review process with
written billing procedures that must now be complied with prior to submission of the JAC invoice each month.
Billable JAC services are recorded in JAIS. When the service is completed it is also recorded in the JAC
accounting database. Thus, the service is recorded in separate and distinct databases. Prior to submission of the
JAC Invoice to WCCAFS, each JAC service unit is cross referenced with previous submissions in the JAC
Accounting data base and with the JAIS service entry documentation to validate and assure accuracy of JAC
service documentation, the correct client registration match, service date match and possibility of duplication
and/or policy discrepancy before the JAC Invoice is completed and submitted.

Further, as noted in Response #1, WCCAFS has revised the JAIS system to also correct this deficiency.

The second deficiency of the JAC was not obtaining a copy of the monthly invoice review as performed by
WCCAFS. The institution of the WCCAFS monthly roll up report provides the verification to the JAC of
WCCAFS review of submitted invoices and the rejection or acceptance of each service unit. Further, in
development with the plan being no check box, but the system will not allow same services for same youth to
be repeated and prevents invoicing for the same item more than one time. This check box system also alerts
JAC staff that an item has already been invoiced and approved by WCCAFS. All JAC invoice submissions are
also cross-referenced by the JAC accounting staff against prior invoices and the JAC accounting database to
search for and eliminate duplicates.

Recommendation #9

We recommend the Department of Children and Family Services: Implement the planned
preventative and detective controls for the JAIS system.

Improvements in the GVT/JAIS

Issue: Overpayments and Duplicate Payments

Answer: Refine/Re-program existing “JAC Services Report” on JAIS

Report needs to be organized by service rather than by juvenile’s name in alphabetical order. This is
100% complete.

JAC Service Units include:

01 – Intake and Commitment and Evaluation;
02 – Psychological Test and Comprehensive Report;
03 – Academic Outcome Testing;
06 – Employment Outcome Verification
08 – Abridged Intake
09 – Abridged Psychological
11 – Non-scheduled Payment;
13 – On Site Screening Pick-up;
14 – Satisfaction Survey;
15 – Psychiatric Evaluation;
16 – Title IV-E Eligibility Determination;
17 – Adoption Home Study;
18 – AOD Juvenile Justice;
AOD Screen Child Welfare

Issue: JAIS terminology needs to be revised, in some cases, to match the above terminology. This will
provide consistent terminology between the JAC and JAIS and eliminate multiple descriptions. This is
100% complete.

Issue: Allow for a CAFS Authorization column. Once authorized, JAIS should lock date, youth and
service authorized. This will prevent double billing. In process.