“Save on Vocational Rehabilitation Costs to Serve More Clients”

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“Save on Vocational Rehabilitation Costs to Serve More Clients”

“Save on Vocational

Rehabilitation Costs to

Serve More Clients”

Oregon Secretary of State Audit Report

2010-xx

Presented by:

Sandra Hilton, OAD Audit Manager

Carl Foreman, OAD Staff Auditor

www.sos.state.or.us/audits/reports/index.html

PRESENTATION OVERVIEW

• Brief background on state vocational

rehabilitation programs

• Why we chose this topic for a performance audit

• Summary of our performance audit results

• Interactions with agency

PROGRAM BACKGROUND

State Vocational Rehabilitation Programs

• Eligibility program.

• Provides services necessary to assist individuals

with physical and mental disabilities in preparing

for, securing, retaining or regaining employment.

• Services vary based on the client’s s employment

goal and what is needed to reach that goal.

• Majority of funding comes from the federal

government (78.7%), with a state match (21.3%)

for the remaining funds.

• Oregon’s s Office of Vocational Rehabilitation

Services (OVRS) spent about $42 million in

federal fiscal year 2008 to serve about 8,400

clients.

WHY WE CHOSE THIS TOPIC

• The Federal Rehabilitation Services

Administration (RSA) collects information from

all state rehabilitation programs and conducts

monitoring reviews of state programs.

• Results from the Oregon Audits Division federal

compliance reviews.

• As of January 2009, OVRS no longer had the

funding to continue serving all eligible

individuals.


Example of questionable cost:

• OVRS paid $16,649 for a commercial grade

play structure that allowed up to 20 children

to play.

• The client’s s goal was to be an in-home

childcare provider.

• The client’s short-term term business goal was to care

for 3 children with a long-term goal of up to 20

children.

• A play structure, commercial or otherwise, is not

required in Oregon for a registered childcare

provider.

Costs approximately $1,600 and $8,300

FEDERAL RESPONSE

RSA responded to auditors’ finding as follows:

• The playground “might have been purchased

at a cheaper amount.”

• Since the client was still providing day-care

services, RSA believed the purchase was a

“prudent and reasonable use of federal funds

for this consumer.”

Compliance vs “Best Practices”

• The purchase of the playground structure had

“complied” with federal requirements.

• Our performance audit raised the bar for

program management.


AUDIT RESULTS

SUMMARY OF AUDIT RESULTS

• Though successful in meeting federal

performance levels, OVRS’ average cost per

client served has been higher than most of the

other state programs.

• It was found that approximately 4,300 more

clients could have been served if OVRS spent

the average cost per client for the other 23 state

programs.

Figure 2: Average Cost per Client Served

• Our audit made 15 recommendations focused

on helping OVRS management save costs,

increase client success rates, and better assist

counselors in performing their duties.

Connecticut

Oregon

Washington

Missouri

New York

Minnesota

Maine

South Dakota

Virginia

Texas

Nebraska

Arkansas

Delaware

New Mexico

Florida

Michigan

Vermont

Average cost of other 23

Iowa

VR programs $ 3,337 excludes Oregon

New Jersey

North Carolina

Massachusetts

Kentucky

South Carolina

Idaho

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Average Cost per Client Served

Source: Federal RSA General State Program data

Data Analysis

• OVRS and federal focus was on percent of closed cases

that resulted in an employment outcome.

“You’re right not because others agree with you,

but because your facts are right.”

Warren Buffet

CEO of Berkshire Hathaway

• To gain a more complete understanding, we performed

data analysis work that included open cases.

• We also used our analysis in selecting a sample of cases

for further review.


Analysis on a Group of Cases

• Reviewed cases that received plan services in

federal fiscal year 2008.

We found the following:

• Success rates went down and costs went up over

time.

• Almost 40% of payments were made for about

20% of cases where clients received plan

services for over two years.

Percent of Rehabilitations by Duration in Program

for Selected Group

Some clients returned repeatedly for program

services.

• 85% of returning clients in FFY08 had returned

1-22 times.

80%

60%

65%

• 15% received services more than twice.

45% 44%

40%

25%

20%

Up to 1 Yr 1-2 Yrs 2-6 Yrs Over 6 Yrs

CASE FILE REVIEWS

Average Cumulative Purchased Costs and Number

of Clients Re-entering entering OVRS

$9,852

$10,519

$10,134

$8,589

$6,444

Average Cost

Total Cases

$2,869

3,433

1,401

568

215

61

42

1 2 3 4 5 6 or more

Number of Times Client Re-entered Services

Source: Oregon Office of Vocational Rehabilitation Services


Identified Issues

• Unrealistic Employment Goals in Client Plans

• Plans Lacked Clear Expectations and Milestones

• Counselor Monitoring of Cases Could Be Improved

• Expenses Sometimes Strayed From Employment Goal

and From Expenses Identified in the Plan

• Allowable Expenses Varied by Counselor

Some Examples

Unrealistic Employment Goals

• $255 was spent for a client to be a security

guard. (Client could not obtain a license because

of prior criminal convictions.)

• $7,100 was spent for a client that could not

provide the necessary documentation for

employment in this country.

Some Examples

Unrealistic Employment Goals (Continued)

• $21,400 was spent over 4.5 years to train a client

in a profession that required physical contact,

even though the client was uncomfortable with

touching people.

• (Funds were also used to help move the client to

another state with different licensure

requirements since Oregon requires physical

contact during exam.)

Some Examples

Plans Lacked Clear Expectations and Milestones

• $4,270 was spent to purchase a custom-built laptop

for a client to use in classes with a goal of becoming

a computer game developer. (The client had

previously had a case closed for the same goal. The

client had difficulty passing required math classes.

The lap top and computer classes were paid for

without addressing the client’s s prior inability to pass

required math classes.)

Some Examples

Counselor Case Monitoring Could be Improved

• In some instances it took months for some

counselors to contact nonresponsive clients.

Some Examples

Expenses Sometimes Strayed From Employment

Goal and Plan

• Over $900 was spent on classes and workshops

for a client to attend which were unrelated to the

employment goal.

• A client was reimbursed $393 for an

interviewing outfit from Nordstrom, which was

$100 over agreed to purchase limit.


Some Examples

Allowable Expenses Varied by Counselor

• Mileage rates used by counselors varied during

the same timeframe.

• Some counselors set $500 or $1,000 limits on

vehicle repairs, whereas other counselors set no

limits.

Policy and Administrative Concerns

Use of Data

• Unclear process for using client data to assist in

developing program strategies and policies.

Policy and Administrative Concerns

Counselor Guidance Needed

• Policy manuals were issued over 10 years ago

and lacked specific policies and procedures.

• Minimal cost guidelines and fee schedules

existed.

Policy and Administrative Concerns

Minimal use of available local and federal resources.

• Audit identified local and federal resources that OVRS

could use to assist in program management.

• OVRS paid $647,000 to one vendor to develop a

strategy for enhancing employment outcomes. Minimal

evidence existed that OVRS considered other available

resources.

Policy and Administrative Concerns

Limited Use of Budgets and Performance Evaluations as

Tools to Help Achieve Positive Outcomes

• Allocation of funds for client expenses to branch

offices and counselors did not adequately take into

account caseload demographics and other factors.

• Performance evaluations were not routinely conducted.

Policy and Administrative Concerns

Limited Use of Surveys to Identify Opportunities

to Improve Program Effectiveness

• OVRS surveys were infrequent and focused on

clients that received program services.

• Surveys of business partners, employers, referral

sources and program staff were not performed.


IT’S S NOT EASY TO BE AN

AUDITEE

INTERACTIONS WITH OVRS

MANAGEMENT

INTERACTIONS WITH AGENCY

QUESTIONS

• Initially management focused on the individualized nature of

program services and the flexibility provided under the

Rehabilitation Act.

• As data analysis and issues were discussed, management became

increasingly more receptive to what the auditors were sharing.

• At the end of the audit program management made a policy

change related to a finding that was effective immediately.

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