Southern Worcester County Rehabilitation Center, Inc. Administration of Limited Unit Rate Service Agreements

The audit was part of a broader review of how DDS used LUSA contracts with human-service providers, especially payments made near the end of the fiscal year.

“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.”

The report says these funds were supposed to pay for limited, unexpected client services, but DDS and the contractor did not always show that the payments were properly authorized, documented, or used as intended.

“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.”

For taxpayers and families who rely on services for people with developmental disabilities, the issue is whether public money was properly tracked and spent on actual services, not unsupported or misclassified costs.

“LUSA agreements are supposed to be used to provide direct services to clients, rather than to directly reimburse contractors for capital items such as vehicles, or other non-service items such as employee overtime costs.”

Auditors questioned $471,084 in funding because the same payments often had multiple problems, including retroactive approvals, missing support, or use through the wrong payment process.

“In many instances, the same transaction was associated with multiple problems.”

The auditor said oversight agencies should review the issues and SWCRC should add controls so LUSA services are properly performed, documented, billed, and accounted for.

“In accordance with the recommendations of the overall report and the testing results specific to SWCRC, SWCRC 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 matters because the problems at SWCRC were presented as part of a larger DDS-wide pattern of poor LUSA administration and improper year-end funding practices.

“That report presents our system-wide audit, which determined that, although LUSA funding is supposed to be used for intermittent unanticipated services to clients as needed, DDS is not properly administering these contracts.”

A LUSA is a type of DDS contract meant for short-term, as-needed services for clients who are 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.”