SOUTHGATE CENTER

Michigan Office of the
Auditor General
Thomas H. McTavish, C.P.A.
Auditor General

EXECUTIVE DIGEST #3933598
SOUTHGATE CENTER

INTRODUCTION
This report, issued in March 1999, contains the results of our performance audit of Southgate Center, Department of Community Health (DCH).

AUDIT PURPOSE
This performance audit was conducted as part of the constitutional responsibility of the Office of the Auditor General. Performance audits are conducted on a priority basis related to the potential for improving effectiveness and efficiency.

BACKGROUND
The Center operates under the jurisdiction of DCH. The Center's mission is to provide the highest standard of residential care through comprehensive supports and services to individuals with developmental disabilities. This is achieved through a person-centered approach designed to increase self-determination and independence, which will enhance the maximum quality of life, thus enabling the person to live in the least restrictive environment.

To facilitate its mission, the Center provides a comprehensive range of services to children and adults. The services include psychological; medical; nursing; social work; psychiatric; occupational, speech, and physical therapy; recipient education; dental; dietary; and vocational services.

The Center is certified as an intermediate health care facility for the mentally retarded. For fiscal year 1996-97, Center expenditures totaled approximately $14.8 million. As of September 30, 1997, the Center had 78 recipients and 202 full-time equated positions.

AUDIT OBJECTIVES, CONCLUSIONS, AND NOTEWORTHY ACCOMPLISHMENTS
Audit Objective: To assess the effectiveness of the Center's continuous quality improvement (CQI) initiatives.

Conclusion: We concluded that the Center's CQI initiatives were of limited effectiveness. Our assessment disclosed one reportable condition related to the Center's CQI program (Finding 1).

Audit Objective: To assess the effectiveness and efficiency of the Center's treatment delivery and discharge planning processes.

Conclusion: We concluded that the Center's treatment delivery and discharge planning processes were generally effective and efficient. However, our assessment disclosed reportable conditions related to person-centered planning, restrictive treatment techniques, and residential placement needs (Findings 2 through 4).

Noteworthy Accomplishments: The Center reported that, since October 1, 1995, it has provided treatment to 189 recipients and has successfully placed 108 of these recipients in community residential settings. Of the 66 individuals admitted to the Center for treatment since October 1, 1995, most had a primary diagnosis of developmental disability with a secondary diagnosis of mental illness. The Center also reported that it improved its ability to provide services to this unique population by hiring three psychiatrists and several registered nurse supervisors with psychiatric experience. In addition, services were expanded to include behavioral programming and use of the most currently available antipsychotic drugs.

Audit Objective: To assess the Center's effectiveness in protecting the rights of its mental health recipients.

Conclusion: We concluded that the Center was generally effective in protecting the rights of its mental health recipients. However, our assessment disclosed reportable conditions related to the initiation and completion of suspected recipient rights violation investigations and complaint acknowledgment letters and status reports (Findings 5 and 6).

Audit Objective: To assess the effectiveness and efficiency of the Center's pharmaceutical purchasing practices.

Conclusion: We concluded that the Center's pharmaceutical purchasing practices were generally effective and efficient. However, our assessment disclosed a reportable condition related to pharmaceutical purchasing, administration, and return functions (Finding 7).

Audit Objective: To assess the effectiveness of the Center's reimbursement billing and collection processes.

Conclusion: We concluded that the Center's reimbursement billing and collection processes were generally effective. However, our assessment disclosed a reportable condition related to collection procedures (Finding 8).

AUDIT SCOPE AND METHODOLOGY
Our audit scope was to examine the program and other records of Southgate Center. Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances.

We examined the Center's records and activities for the period October 1, 1995 through June 30, 1998.

To accomplish our audit objectives, we reviewed applicable DCH and Center policies and procedures. We interviewed Center staff. We assessed the completeness of the Center's performance indicators and performance standards. We evaluated the effectiveness of the Center's data collection and reporting systems.

We assessed the Center's person-centered planning efforts and evaluated its compliance with selected Mental Health Code requirements related to treatment delivery. We assessed the adequacy of the Center's discharge planning process.

We analyzed selected recipient rights complaints and assessed the Center's timeliness in initiating and completing recipient rights investigations and its timeliness in issuing complaint acknowledgment letters and status reports. We evaluated the appropriateness of the remedial action taken by the Center as a result of substantiated rights complaints. We assessed the effectiveness of the Center's efforts to prevent recipients' unauthorized leaves of absence.

We evaluated the effectiveness of the Center's internal control structure over pharmaceutical purchasing, administration, and return functions. We analyzed selected pharmaceutical purchases and assessed the appropriateness of the contracted pharmacy's charges along with the completeness of the Center's pharmaceutical administration records.

We documented and assessed the effectiveness of the Center's internal control structure over reimbursement billing and collection. We reviewed selected billings and assessed their accuracy and completeness. We assessed the appropriateness of the Center's financial liability determinations.

AGENCY RESPONSES
Our audit report contains 8 findings and 8 corresponding recommendations. The agency preliminary response indicated that DCH agrees with all 8 findings.

Full Audit Report - #3933598 - SOUTHGATE CENTER

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This page was created on 03/05/99.


INTRODUCTION This report, issued in March 1999, contains the results of our performance audit of Southgate Center, Department of Community Health (DCH).

AUDIT PURPOSE This performance audit was conducted as part of the constitutional responsibility of the Office of the Auditor General. Performance audits are conducted on a priority basis related to the potential for improving effectiveness and efficiency.

BACKGROUND The Center operates under the jurisdiction of DCH. The Center's mission is to provide the highest standard of residential care through comprehensive supports and services to individuals with developmental disabilities. This is achieved through a person-centered approach designed to increase self-determination and independence, which will enhance the maximum quality of life, thus enabling the person to live in the least restrictive environment. To facilitate its mission, the Center provides a comprehensive range of services to children and adults. The services include psychological; medical; nursing; social work; psychiatric; occupational, speech, and physical therapy; recipient education; dental; dietary; and vocational services. The Center is certified as an intermediate health care facility for the mentally retarded. For fiscal year 1996-97, Center expenditures totaled approximately $14.8 million. As of September 30, 1997, the Center had 78 recipients and 202 full-time equated positions.

AUDIT OBJECTIVES, CONCLUSIONS, AND NOTEWORTHY ACCOMPLISHMENTS Audit Objective: To assess the effectiveness of the Center's continuous quality improvement (CQI) initiatives. Conclusion: We concluded that the Center's CQI initiatives were of limited effectiveness. Our assessment disclosed one reportable condition related to the Center's CQI program (Finding 1). Audit Objective: To assess the effectiveness and efficiency of the Center's treatment delivery and discharge planning processes. Conclusion: We concluded that the Center's treatment delivery and discharge planning processes were generally effective and efficient. However, our assessment disclosed reportable conditions related to person-centered planning, restrictive treatment techniques, and residential placement needs (Findings 2 through 4). Noteworthy Accomplishments: The Center reported that, since October 1, 1995, it has provided treatment to 189 recipients and has successfully placed 108 of these recipients in community residential settings. Of the 66 individuals admitted to the Center for treatment since October 1, 1995, most had a primary diagnosis of developmental disability with a secondary diagnosis of mental illness. The Center also reported that it improved its ability to provide services to this unique population by hiring three psychiatrists and several registered nurse supervisors with psychiatric experience. In addition, services were expanded to include behavioral programming and use of the most currently available antipsychotic drugs. Audit Objective: To assess the Center's effectiveness in protecting the rights of its mental health recipients. Conclusion: We concluded that the Center was generally effective in protecting the rights of its mental health recipients. However, our assessment disclosed reportable conditions related to the initiation and completion of suspected recipient rights violation investigations and complaint acknowledgment letters and status reports (Findings 5 and 6). Audit Objective: To assess the effectiveness and efficiency of the Center's pharmaceutical purchasing practices. Conclusion: We concluded that the Center's pharmaceutical purchasing practices were generally effective and efficient. However, our assessment disclosed a reportable condition related to pharmaceutical purchasing, administration, and return functions (Finding 7). Audit Objective: To assess the effectiveness of the Center's reimbursement billing and collection processes. Conclusion: We concluded that the Center's reimbursement billing and collection processes were generally effective. However, our assessment disclosed a reportable condition related to collection procedures (Finding 8).

AUDIT SCOPE AND METHODOLOGY Our audit scope was to examine the program and other records of Southgate Center. Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances. We examined the Center's records and activities for the period October 1, 1995 through June 30, 1998. To accomplish our audit objectives, we reviewed applicable DCH and Center policies and procedures. We interviewed Center staff. We assessed the completeness of the Center's performance indicators and performance standards. We evaluated the effectiveness of the Center's data collection and reporting systems. We assessed the Center's person-centered planning efforts and evaluated its compliance with selected Mental Health Code requirements related to treatment delivery. We assessed the adequacy of the Center's discharge planning process. We analyzed selected recipient rights complaints and assessed the Center's timeliness in initiating and completing recipient rights investigations and its timeliness in issuing complaint acknowledgment letters and status reports. We evaluated the appropriateness of the remedial action taken by the Center as a result of substantiated rights complaints. We assessed the effectiveness of the Center's efforts to prevent recipients' unauthorized leaves of absence. We evaluated the effectiveness of the Center's internal control structure over pharmaceutical purchasing, administration, and return functions. We analyzed selected pharmaceutical purchases and assessed the appropriateness of the contracted pharmacy's charges along with the completeness of the Center's pharmaceutical administration records. We documented and assessed the effectiveness of the Center's internal control structure over reimbursement billing and collection. We reviewed selected billings and assessed their accuracy and completeness. We assessed the appropriateness of the Center's financial liability determinations.

AGENCY RESPONSES Our audit report contains 8 findings and 8 corresponding recommendations. The agency preliminary response indicated that DCH agrees with all 8 findings.