title
Receive the Auditor-Controller’s Internal Audit Division’s Internal Control Review of the Department of Health and Social Services Special Investigation Bureau Accounts Receivable
body
Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Auditor-Controller’s Office (ACO) recommends the Board of Supervisors receive the internal control review of the Department of Health and Social Services (H&SS) Special Investigations Bureau (SIB) Accounts Receivable.
SUMMARY AND DISCUSSION:
At the request of H&SS and pursuant to the ACO’s Internal Audit Division (IAD) FY2018/19 audit plan, the IAD performed an internal control review of the SIB Accounts Receivable process. The objectives of the review were to evaluate the effectiveness and efficiency of the internal controls, policies, procedures, and practices in billing and collection of benefit overpayments and general assistance loans. The scope of our review included reviewing accounts receivable policies, procedures, and practices in place as of December 31, 2018.
SIB Accounting Unit manages the billing and collection of benefit overpayments and general assistance loans. Overpayments occur when a client receives benefits to which he/she was not eligible. Client errors and administrative errors may cause overpayments. Overpayments are recovered through voluntary cash recoveries, voluntary grant offset, offset of overpayment and underpayment, recoupment/grant adjustment and/or demand for repayment. General assistance (GA) is a County funded program which provides cash assistance to adults without dependents. GA is considered a loan and the recipient must pay it back.
The County uses CalWIN to support the administration of public assistance programs. Benefits are entered and administered through CalWIN. SIB uses Ventura Automated Collection System (VACS) to manage billings and collections of benefit overpayment and general assistance loans. CalWIN interfaces with VACS after overpayment is identified in CalWIN thus enabling SIB Accounting Unit to initiate billing for overpayments. As of December 31, 2018, outstanding accounts receivable balance for benefit overpayments and general assistance loans is $38,242,383.
Based upon the ACO review, the ACO identified internal control deficiencies and opportunities for improvement in the billings and collections process for benefit overpayments and general assistance loans. The areas the ACO identified include the following:
1. Aging of accounts receivable not done.
2. Uncollectible/invalid debts due to incomplete or missing documentation.
3. Accounts receivable not recorded in OneSolution.
4. Inadequate segregation of duties.
5. Lack of supervisory review of account write offs and adjustments.
6. Need to improve collection efforts on General Assistance loans.
7. Lack of formal written policies and procedures for managing accounts receivable.
8. More involvement of H&SS Fiscal in the accounts receivable process.
9. Evaluate the cost benefit of collecting delinquent accounts including mailing billing statements.
Attachment A provides detail of each of these findings, including recommendations and management’s responses. H&SS management agrees with the findings and recommendations.
The ACO would like to thank Department of Health and Social Services management and staff for their cooperation and assistance during our review.
FINANCIAL IMPACT:
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2019/20 Adopted Budget.
ALTERNATIVES:
The Board of Supervisors could elect not to accept the report. This alternative is not consistent with sound public policy and is therefore not recommended.
OTHER AGENCY INVOLVEMENT:
The Department of Health and Social Services has reviewed and accepted the report. H&SS management responses are included. The County Administrator’s Office has reviewed the report.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION