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Audit: County lost out on $100K

December 19, 2013
By MICHAEL ANICH , The Leader Herald

FONDA - State Comptroller Thomas P. DiNapoli on Wednesday issued a critical report on the way Montgomery County handled reimbursement for social services costs, finding the county lost out on reimbursement of just over $100,000.

The comptroller found Montgomery County was one of seven counties that have not maximized their reimbursement of expenditures related to the administration of social services programs.

A news release from DiNapoli's office said the seven counties - Montgomery, Franklin, Genesee, Greene, Ontario, Sullivan and Tioga - failed to seek reimbursement totaling more than $1.4 million in eligible costs, potentially losing almost $1 million in additional revenue. This revenue was lost because the counties did not establish consistent billing processes, which resulted in billing errors or a failure to bill at all, the release said.

The audit was for the period Jan. 1, 2011, through Dec. 31, 2012. DiNapoli's office interviewed county officials, and reviewed plans, annual financial reports and ledgers, county budgets, payroll records, departments' direct billings for services and other documents.

"My office's audits of local governments improve their financial management practices," DiNapoli said. "These audits are tools for local officials to make sure proper policies and procedures are in place to protect taxpayer dollars and provide the best possible service these taxpayer dollars can deliver."

The state's audit on Montgomery County found the county underbilled by $135,700, and the additional potential revenue the county lost out on totaled $101,775.

Montgomery County Board of Supervisors Chairman John Thayer said today he was aware of the comptroller's work on this issue. He said his county considers the audit a "constructive exercise" by the controller's office to help the county in the future.

"They were just looking at each county's billing for social services," the Root supervisor said. "There's always room for improvement. The systems are so complicated."

The audit stated federal and state regulations permit the reimbursement of certain interdepartmental service costs that are directly billed to the county Department of Social Services. Direct costs are those that can be identified specifically with a particular DSS-related cost. Typical reimbursable direct costs are compensation of employees for the time devoted to social services programs and costs of materials acquired, consumed or expended as they relate to the social services programs, the audit said.

To receive reimbursement for direct costs, county departments are supposed to bill for all actual and appropriate expenditures incurred in administering social services programs, the audit said. Counties should have guidelines and procedures for the departments to follow when directly billing DSS for reimbursable services.

The audit found the counties were "not accurately capturing and billing for interdepartmental service costs related to social services programs."

Some of the departments not properly billing for interdepartmental services among the counties listed included county attorney's offices, district attorney's offices, information systems departments, Offices for Aging and sheriff's offices.

State officials said some of underbilling was related to the Federal Insurance Contributions Act, or FICA.

"The underbillings can be attributed to several reasons," the audit said. "We found that county departments are not fully capturing the counties' share of applicable FICA, disability, workers' compensation, retirement and/or health insurance costs as they relate to the direct services provided for social services programs.

"For example, instead of billing for the actual costs incurred, some county departments used a standard percentage to calculate these payroll-related costs," the audit said. "County departments were also limited to claiming certain amounts based on negotiated agreements between departments."



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