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New York City Comptroller William C. Thompson, Jr. today issued an audit finding that the Administration for Children’s Services (ACS) overpaid a Manhattan not-for-profit foster care provider more than $366,772.

“Graham Windham is responsible for providing essential services to the City’s most valuable resource – our children,” Thompson said.  “At a time when the Mayor has asked all agencies to tighten their belts due to tough economic times, ACS must be more diligent in ensuring that no penny is wasted, that it receives all of the services it pays for, or gets its money back.”

Graham Windham is a not-for-profit organization located in Manhattan that provides foster care services under a contract with ACS. In Fiscal Year 2002, ACS reimbursed Graham Windham $23,535,078 for providing services to 1,785 children – 262 in its Institution Program, 1,125 in its Foster Boarding Home Program, 94 in its Therapeutic Foster Boarding Home Program, 291 in its Emergency Foster Boarding Home Program, and 13 in its Supervised Independent Living Program.

Foster care providers, such as Graham Windham, are reimbursed on a per diem rate that is calculated according to a formula developed by the New York State Office of Children and Family Services (OCFS). The per diem rate is limited to the Maximum State Aid Rate (MSAR) established by OCFS and ACS. In addition, these reimbursements are governed by rules and regulations established in the New York State Standards of Payment for Foster Care of Children, and the City Foster-Care Reimbursement Bulletin No. 92-5 regulations.
Thompson’s audit - which can be viewed at www.comptroller.nyc.gov – found that Graham Windham owes the City $366,772 resulting from the difference between the funds it received from ACS and the actual expenses it incurred to operate its programs during Fiscal Year 2002.

During this time period, ACS advanced Graham Windham $23,535,078. However, Thompson’s audit found that the organization was only entitled to receive $23,175,401, a difference of $359,677. In addition, Graham Windham owes $7,095 for overbilling ACS for 116 days of care.

Secondly, the audit disclosed that, for Fiscal Year 2002, Graham Windham inappropriately claimed $404,220 in expenses that were not allowed under the New York State Standards of Payment and the City Foster-Care Reimbursement Bulletin No. 92-5 regulations.
These discrepancies are a result of: the improper allocation of funds, claims in unallowable legal fees and administrative expenses, inappropriately claimed interest expenses, overstated expenses, overbilling, and other bookkeeping errors.

 “While our audit found that Graham Windham generally complied with accounting regulations, we found several exceptions over the course of our review, the fact of the matter is that children must receive the maximum support possible from every dollar spent on foster care services,” Thompson added. 

As a result of this audit, Thompson recommends that Graham Windham:

• Remit $366,772 in excess funding to ACS;
  
• Include only allowable program expenses in its Report of Actual Expenditures;
  
• Ensure that ACS program expenses are offset against other related sources of income that Graham Windham receives;
  
• Maintain separate accounts for ACS and non-ACS programs; and,
  
• Report its days of care accurately and in accordance with New York State and ACS regulation, billing ACS for only those children in attendance at the foster care programs.
  

Thompson also recommends that ACS:

• Issue a written notice to Graham Windham requiring that it remit $366,772 in excess funding to ACS; and,
  
• Ensure that Graham Windham complies with the report’s other recommendations.

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