County agencies responsible for caring for thousands of intellectually disabled state residents have failed to adequately protect the money and property of those they are caring for, according to audits of the agencies.
In more than half of audits conducted during the past three years, dozens of county disabilities and special needs boards were cited for failing to properly manage the funds and property of consumers, the term used to describe the disabled who receive services from the agencies.
The internal audits by the state Department of Disabilities and Special Needs also cited many boards for sloppy financial management, including personal use of board credit cards, inadequate cash and inventory controls and spending issues.
DDSN Commissioner Vicki Thompson of Seneca said commissioners are aware of county audits as they are done but she has not seen a compilation of issues found by auditors to spot systemic issues.
“We don’t have a summary of internal audits so we can identify systemic weaknesses, which we certainly have, and then dig deeper to find out if our administrative directive is not clear or our training not good enough,” she said. “We’re not looking at the right data to be able to fix anything.”
The Greenville News obtained the audits through a Freedom of Information Act request and reviewed them as part of an ongoing examination of the care of the state’s vulnerable adults and the agencies responsible for that care.
DDSN contracts with the county agencies, each of which is overseen by a board, to provide a bevy of services, including residential care, to more than 20,000 people, including intellectually disabled, those with autism, spinal cord or brain injuries.
Only three of 48 audits found no problems. Those were for the Richland-Lexington counties board, the Marion County board and the Jasper County board.
Among the findings:
- Some agencies improperly required consumers to pay for items that should have been provided by Medicaid or the agency, the audits found
- Some did not complete required background checks of their employees, including direct care staff.
- One agency failed to report a series of thefts of consumers’ property to DDSN while another was late in filing critical incident reports.
- Boards for nine of the agencies were cited for failing to meet because not enough members showed up, for having members who had missed too many meetings, or for failing to follow the state Freedom of Information Act, according to the audits. In one case, auditors faulted an agency for nepotism after a board member’s wife was hired. In another case, male board members were called out for inappropriately visiting the rooms of female consumers at night.
- The audit findings concerning the Sumter board were so serious that DDSN required the board to undergo governance training, records show.
The audits are performed about once every three years, and those with findings trigger follow-up examinations, said Lois Park Mole, a DDSN spokeswoman.
Each of the county boards promised corrections with most of the findings but some follow-up audits found the same problems. In 16 of 18 follow-up audits, records show auditors cited the agencies for problems, repeat or new.
DDSN Commissioner Eva Ravenel, of Charleston, said she believes most of the problems found in audits are not the result of intentional misconduct.
“One of our main problems is that we have underpaid people and we are asking them to do big jobs and these people are not really savvy in taking care of people’s finances and writing it down,” she said. “I really don't think we have bad people. I think we have people who just don’t have that expertise. They don’t have that education to do what’s necessary and we don't give them enough training to do it.”
Sen. Thomas Alexander, a Walhalla Republican who chairs the Senate finance subcommittee with oversight of DDSN, said he is pleased the agency is conducting audits of county boards. But he said he is concerned that so many continue to have problems.
“They need to be more aggressive at finding these issues and getting them resolved once you find them,” he said. “The agency (DDSN) contracts with these folks so they should be holding them accountable.”
Sen. Kevin Bryant of Anderson, who serves on the Senate Medical Affairs Committee, said the audits concern him.
“When they tell us they are underpaid and they’re wasting their money on computers and iPads, and then come to us and say they need more money, it seems contradictory,” he said. “We see this all through government. Agencies come to us and tell us how much more money they need and then we look at how they are spending it and are wasting it. It's one of the things we have to deal with. It’s not just DDSN.”
Executive directors of the county agencies reached by The News said that the audits require them to submit a plan of correction and then to report when the problems are resolved. Each said the findings viewed by the newspaper had been corrected.
The most common finding by auditors involved controls meant to protect consumers’ funds and personal property. In 28 of 48 audits, auditors said boards did not always properly maintain and account for consumers’ money or property. In some cases that meant a failure to properly record bank signature cards, in others it meant not reconciling bank statements in a timely manner. In still others it meant a lack of documentation for how consumers’ funds were spent.
- In Darlington County, auditors noted several problems in connection with managing consumers funds, including naming the board as a beneficiary for one consumer’s life insurance policy.
- In some cases, auditors found expenses paid by consumers that should have been paid by the agency or by Medicaid. One consumer, for instance, paid $325 to repair a hearing aid that should have been paid by Medicaid, auditors reported in a 2014 Fairfield County audit.
- In Laurens County, a 2015 audit determined two consumers in a group home spent their own money on mattresses for their beds, even though auditors noted that the bed belonged to the agency which should have paid for the mattresses.
- In Pickens County, auditors totaled $1,046 in medical expenses paid for by a consumer that they said would have been eligible for Medicaid.
- At the Burton Center, an organization that DDSN contracts with and treats as a DSN board, auditors said in 2013 a consumer paid to charter two buses to take those in the day program to the zoo in Columbia at a cost of $1,500.
Burton Center officials said in their audit response that a consumer requesting special trips in the future would have to pay for staff to attend. They said the zoo trip arrangements were unusual. Auditors responded that to charge a consumer for staffing costs was “an inappropriate business practice and unfair to the consumer.”
The last published audit of the Greenville board, now called Thrive Upstate, reported in 2013 that in two instances, disbursements from consumers’ funds did not have receipts. It also reported four findings in the management of consumers’ property, concerns over a terminated contract, and found that inventoried assets and equipment were not managed using sound internal controls.
But those problems paled in comparison to findings concerning Greenville’s previous board of directors, included in the 2013 audit. Complaints about the administration of the agency came to the Greenville County Council in 2012 and the council eventually passed an ordinance which effectively dissolved the agency’s board and administration.
The subsequent audit found one board member missed three consecutive meetings and the finance committee once took action without a quorum, including increasing the executive director’s procurement authority from $15,000 to $75,000 without board approval. The audit also reported that an unnamed board member, who was the parent of a disabled person served by the board and was their payee representative, owed money to a provider in a matter that was eventually turned over to the State Law Enforcement Division over concerns of possible financial exploitation.
The audit also reported a lack of competitive bidding concerning services valued at more than $50,000 initiated with the former administration and a “questionable” accounts payable check for $7,500 that was to be a legal retainer but was returned after the board was dissolved.
John Cocciolone, the executive director who took over in 2013, said the findings have all been corrected.
“They were doing things they shouldn’t have been doing,” he said of the former board and administration. “As far as I can tell and what I heard from the auditors, no money was missing. It was just really poor management.”
He said he has tried to make the agency much more transparent, allowing families to speak at board meetings, and has helped direct improvements, including guiding the agency onto more stable financial footing. At one time during the previous board, the agency had a $1.5 million deficit.
“Now we have some money in the bank and we’re moving forward and doing different things,” he said. “Things are going really well.”
One of the harshest audits came about not because of auditors but as the result of employees bringing allegations to the state inspector general in 2014.
The resulting DDSN audit of the Anderson County DSN Board in June 2015 found a host of problems, including a series of allegations outlined by the inspector general: using salvaged vehicles to transport consumers, “questionable” purchases and management decisions, $57,000 paid by the state for an early intervention employee who had been laid off, repeated problems in financial audits, and the use of the agency’s account by an official to gain Best Buy rewards for himself, records show.
DDSN auditors also reported that fraudulent activity on a consumer’s debit card was not reported for a week. According to the audit, 25 other consumers had their debit cards compromised. Auditors reported that numerous other critical incident reports were filed late.
The auditors also reported repeated financial deficiencies, as well as various problems, including inaccurate information.
“To date, we have not received a balance sheet that balances,” the auditors wrote.
The board said in its response to the audit that it had hired a new finance director and the concerns noted by auditors would be corrected.
Tyler Rex, who in March became the agency’s new executive director, said all of the findings had been corrected before he took over and he has personally verified the corrections.
Anderson was by no means alone in financial management problems.
Auditors reported problems with credit, charge or purchase cards at six other county agencies, including personal use of cards.
- In Orangeburg, auditors found 11 cards of four different types with a collective credit limit of $65,000. The executive director there had a credit limit of $25,000, according to auditors.
· In Pickens County, which auditors said had no policy on credit cards, auditors found seven different types of cards with a combined credit limit of $87,750. One official made personal and agency purchases using the American Express card but reimbursed the agency, auditors reported. Officials said in their responses that they would do a better job of monitoring the cards, reduce some of them and prohibit personal use of cards.
The most critical audit of board actions was conducted in 2014 at the request of DDSN officials due to “numerous concerns” about the Sumter County agency.
Auditors reported “a work environment that is riddled with fear and intimidation from certain board members.”
“One interviewee referred to the board meeting room as ‘the bully pit’ while several other interviewees told of being ‘interviewed’ by the board for several hours,” the auditors reported. “Almost all agreed the tension level in the building increased when board members were on-site which, for some board members, is almost on a daily basis.”
Some board members “overstepped their bounds” and took on management roles, auditors reported, including investigating a death, investigating consumers’ admissions and involving themselves in personnel actions. No board members names were mentioned in the audit, nor was there a response from the board included in the audit report.
“Staff stated that board members enter the residence and search through the consumer rooms, closets and medical cabinets,” the auditors reported. “On one occasion, male board members entered a female consumer’s room while she was asleep. On another occasion, two male board members entered a female residential home after 8 pm while the females were preparing for bed.”
DDSN notified the board that it would receive mandatory governance training and was prohibited from firing, demoting or taking any adverse action against staff who had cooperated with the audit.
Neither the agency’s executive director nor the board’s chairman could be reached for comment.
In another audit performed as a special request, a DDSN auditor, along with SLED, earlier this year looked into allegations that some consumers of the Beaufort County board had been financially exploited while working as janitors.
The audit reported that the agency had filled out the proper forms to use some consumers there for janitorial services in cleaning county recreation buildings and to be paid less than the minimum wage.
But auditors found that the agency was not properly paying consumers for travel time between job sites and that pay totaled $18,370 for 39 consumers.
The agency in its response said it would reimburse all the consumers. Executive Director Bill Love said the reimbursements have all been paid and he approved paying at least minimum wage for any of the travel hours at issue.
A local cleaning company filed suit this month against the county, alleging it had allowed the disabilities board to unfairly bid on cleaning services.
Love said his agency’s bid for janitorial work was all done “fairly and squarely.”
“Our responsibility is to put individuals who can do the work in job situations where they can earn and make some money,” he said.