Office of Children and Family Services
Youth Facility Chargeback Rates to Localities
Issued: March 21, 2012
Link to full audit report 2009-S-20
Purpose
To determine whether chargeback rates used by the Office of Children and Family Services (OCFS) were calculated appropriately, and whether OCFS has been collecting the appropriate reimbursements from localities. The audit covers the period January 1, 2006 through December 31, 2007 for our evaluation of the chargeback rates, and through January 2010 for our verification of care days and accounts receivable.
Background
OCFS is responsible for all elements of the State's juvenile justice program including the administration and management of various facilities housing juvenile offenders. Localities are required to reimburse OCFS for 50 percent of the expenditures incurred for the care, maintenance, and supervision of the youth within these juvenile facilities. OCFS' Rate Setting Unit develops the "chargeback" rates used to bill localities. In calendar years 2006 and 2007, there were 43 juvenile facilities in New York State servicing over 3,000 youth. OCFS' total annual juvenile facility operating costs for this period exceed $200 million. Updated cost information for 2008 and 2009 was not available at the time of our audit.
Key Findings
- OCFS calculates juvenile facility chargeback rates correctly. However, in general, OCFS has been deficient in revising its rates in a timely manner, as well as in billing and collecting millions of dollars in required reimbursements from localities.
- As of August 2010, OCFS officials have yet to collect at least $40 million that should have been billed and collected in prior years.
Key Recommendations
- Revise chargeback rates annually as required and aggressively pursue outstanding receivables from localities. If necessary, offset those receivables with State monies due to those localities.
- Recalculate the rates for 2006 and 2007 by including the underreported expenses included in our report. Adjust future billings for these periods accordingly.
Other Related Audits/Reports of Interest
Office of Children & Family Services: Grants & Contracts Awarded to Educators for Children, Youth and Families, Inc. Report 2007-S-128
Office of Children & Family Services: Oversight of Operating Revenue Contracts Report 2009-S-18
State Government Accountability Contact Information:
Audit Director: Frank Patone
Phone:(212) 417-5200; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236
