Advocates, Inc. Administration of Limited Unit Rate Service Agreements
July 17, 2013 · Read the full official report (PDF) ↗
Published July 17, 2013 Audit covers July 1, 2008 – June 30, 2011 Under Suzanne M. Bump · 2011–2023
source
“We found problems with all $950,545 of Advocates’ accounts-payable-period LUSA transactions, including inadequate documentation to substantiate that LUSA services were properly authorized, inadequate documentation to support LUSA billings, and LUSA contract funding not being used for its intended purposes, as follows:”
Read the plain-English breakdown
The Auditor was reviewing how DDS used LUSA contracts, especially payments made late in the fiscal year, because those payments appeared higher-risk.
“The overall audit of DDS was conducted as part of OSA’s ongoing efforts to audit human-service contracting activity by state agencies and to promote accountability, transparency, and cost effectiveness in state contracting.”
Without proper paperwork, the state could not be sure the services were approved, actually delivered, or not paid for twice.
“The lack of adequate documentation violated provisions of the Commonwealth Terms and Conditions for Human and Social Services, and as a result, there was insufficient evidence to show that these LUSA payments had been properly authorized and accounted for; that they were not duplicative or excessive; and that the contractor had actually provided the LUSA services billed.”
If you are a Massachusetts resident, this concerns public money paid to a nonprofit that provides services to DDS clients in eastern and central Massachusetts.
“Advocates annually receives over $16.3 million in contract payments from DDS.”
Auditors did not say every dollar was definitely improper, but they questioned $950,545 because the controls and documentation were not good enough.
“The unduplicated amount of questioned funding is $950,545.”
The Auditor said oversight agencies should review the issues, and Advocates should improve controls so services are properly performed, documented, billed, and accounted for.
“In accordance with the recommendations of the overall report and the testing results specific to Advocates, Advocates should implement appropriate control measures to ensure that all LUSA services are performed, documented, billed, and accounted for in compliance with applicable requirements.”
The report says the Advocates issues were part of a broader DDS problem with how LUSA money was managed and used.
“DDS’s practice of improperly administering and using LUSAs has led to the problems with the administration and use of these funds at various DDS contractors, such as Advocates.”
A LUSA is a DDS contract tool meant for short-term, as-needed services for clients not already covered by another contract.
“LUSAs are a form of a master contract agreement that can be used by DDS to purchase services from a preapproved contractor on an intermittent, limited-time basis for clients who are not already covered through an existing contract.”
5 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Obtain information required to assess the system of internal controls DDS has established over its administration of LUSA contract funding.
- Did not comply Determine whether LUSA funding is being used as intended and in compliance with applicable laws, regulations, policies, and procedures by conducting audit testing of a judgmental sample of DDS human-service contractors that received significant LUSA funding.
What the Auditor found
Why it matters: There was insufficient evidence that payments were properly authorized, accounted for, not duplicative or excessive, and actually supported by services delivered.
Standard: DDS requirements for Authorization for Services Forms and Section 7 of the Commonwealth Terms and Conditions for Human and Social Services. ( Chapter 11, Section 12, of the Massachusetts General Laws; Section 7 of the Commonwealth Terms and Conditions for Human and Social Services; 808 CMR 1.00 )
1 recommendation
- Advocates should implement appropriate control measures to ensure that all LUSA services are performed, documented, billed, and accounted for in compliance with applicable requirements.agency: already implemented
Agency response & Auditor reply
Agency: "We have modified our practices and procedures to fully comply with the more stringent rules going forward, and we appreciate the additional guidance."
Why it matters: Retroactive authorization violated DDS requirements and weakened assurance that services were approved before they began.
Standard: DDS requires an Authorization for Services process before services begin.
1 recommendation
- Advocates should implement appropriate control measures to ensure that all LUSA services are performed, documented, billed, and accounted for in compliance with applicable requirements.agency: already implemented
Agency response & Auditor reply
Agency: "We now understand that LUSA’s were not the preferred vehicle for reimbursing many of the costs for which they were used, and that the mechanics of their use is more complicated and time sensitive than we previously believed."
Why it matters: Using LUSA funds for these transactions created procurement, service utilization, and accounting problems, and required service delivery documentation was absent.
Standard: DDS policies governing the use of LUSAs and DDS policy and contract language require other payment mechanisms for these situations.
1 recommendation
- Advocates should implement appropriate control measures to ensure that all LUSA services are performed, documented, billed, and accounted for in compliance with applicable requirements.agency: already implemented
Agency response & Auditor reply
Agency: "With respect to the assertion that LUSA payments we received were unreasonably excessive . . . we respectfully disagree."
Verified dollar findings
Identified dollar findings that do not fall in a named band.