The Institute for Developmental Disabilities, Inc.

This is a Massachusetts State Auditor report reviewing IDDI, a nonprofit that served children and adults with severe disabilities, for the period July 1, 2009 through June 30, 2011.

“The scope of our audit was to examine various administrative and operational activities of the Institute for Developmental Disabilities, Inc. (IDDI) during the audit period July 1, 2009 through June 30, 2011; however, in some instances it was necessary for us to extend the period covered by our audit in order to adequately examine certain transactions that were selected for testing during our review.”

The audit checked whether IDDI followed laws, regulations, contract rules, and good controls for areas such as payroll, benefits, contracts, vehicles, related-party dealings, and fundraising.

“An assessment of IDDI’s business practices and its compliance with applicable laws, rules, and regulations, as well as the various fiscal and programmatic requirements of its state contracts.”

The report matters because IDDI received substantial public funding and the audit found state money was charged for costs the auditors considered unallowable, unnecessary, or improperly handled.

“Consequently, because the $90,922 in LUSA funding was not used for its intended purpose, these payments to IDDI were unnecessary, unallowable, and inappropriate.”

For an ordinary taxpayer, the issue is whether public money meant to support services for people with developmental disabilities was spent and tracked properly.

“According to DDS’s policies, the funding provided under these contracts is to be used by contracted service providers such as IDDI to purchase unanticipated, intermittent, and as-needed services for developmentally disabled individuals.”

The auditor said IDDI should repay several amounts to the Commonwealth and tighten how it buys services, records income, handles benefits, and reports fundraising costs.

“IDDI should remit the $9,335 in unallowable fundraising expenses it charged to its state contracts and ensure that any future fundraising expenses are properly identified and reported.”

The report recommends that IDDI work with state agencies, repay identified improper charges, and change its procedures so future spending follows state rules.

“IDDI should consult with OSD and DDS to resolve the unallowable capital purchases paid for with LUSA funds.”

The audit found multiple control problems, including weak competitive bidding, missing written agreements, unallowable charges, and poor cost allocation, all involving state-funded contracts for services to vulnerable residents.

“Rather, our audit provides findings and conclusions on the extent of IDDI’s compliance with applicable laws, regulations, and contractual agreements, and identifies operational and administrative processes, methods, and internal controls that could be made more efficient and effective.”

A LUSA is a limited-use agreement meant for unexpected, short-term, as-needed services, not for routine capital purchases like vans, air conditioning, or flooring.

“The purpose of LUSAs is to allow providers the opportunity to place on file with DDS a contract that can be accessed at any time during its life when an unexpected or limited time service is agreed upon by both the provider and DDS.”