Disabled residents’ cash focus of inquiry
Posted on Saturday, September 6, 2008
URL: http://www.nwanews.com/adg/News/236486/
A bank account with money belonging to developmentally disabled residents at the Alexander Human Development Center is being scrutinized for mismanagement, according to a draft report obtained Friday by the Arkansas Democrat-Gazette.
A criminal investigation concerning the account is also ongoing, Arkansas State Police Capt. Henry LaMar said, adding that he could not comment further.
The six-page report, which is part of a yet-to-be-completed internal investigation by the state Department of Human Services, does not allege that employees stole money.
The report shows that “expenditures [in 2007 ] were not properly documented, forms were altered and receipts were not clearly marked with client’s name. Receipts were often missing for purchases. There were months of documentation not available.”
One business office employee, whose name was not released, was transferred to another department pending the outcome of the investigation, said Julie Munsell, a spokesman for the Department of Human Services, the agency responsible for the Developmental Disabilities Services Division. That division runs all six human development centers in Arkansas.
Munsell said her agency was alerted to the problems when a new business manager at the Alexander facility took over in February. An internal review has been ongoing since then. Information was turned over to state police in March.
“There are procedures to ensure that [the money ] is properly tracked and accounted for, and they’ve worked that way very well for many, many years,” Munsell said. “I think the issue here was... the procedures they put in place to account for it weren’t being followed, and I think that’s a personnel issue.”
The previous manager, James Helton, left in November after four years, Munsell said. The problems were not found until after he left. A call to a phone number for Helton went unanswered Friday evening.
Department of Human Services auditors have reviewed records back to 2003. They found the same kind of issues that took place in 2007, Munsell said. Before 2003, records showed that the account was being handled properly.
“It’s entirely possible that the transactions were very appropriate, but because the documentation was so poor, we can’t determine that either,” she said. “It was just very poor management.”
Human development centers ’ business managers are not required to have accounting degrees, Munsell said, adding that Helton did not have one. Information about what qualifications he did have was unavailable late Friday.
“They’re not the [chief financial officer ],” Munsell explained. “They’re not balancing the agency funds. They are managing the business office.”
The center’s business office handles money for the 115 men who live at the long-term-care facility because they are mentally disabled and cannot care for themselves. Their money comes from Social Security income, money from relatives and income from jobs at the center, like stuffing envelopes.
Though there is only one account for all of the residents ’ money, ledgers detailing deposits, withdrawals and expenditures are supposed to be kept for each resident. When the residents want some of their money, an employee is supposed to fill out a form at the business office to get the cash.
At any given time, Munsell said, there is about $ 40, 000 or $ 50, 000 in the account.
The residents use the money “to go to a baseball game or buy a pizza or go to Wal-Mart,” Munsell said, adding that it is not used for their medical care.
If a resident has any money left over after an outing or a trip to the store, the employee is supposed to turn that in to the business office along with a receipt that shows how the money was spent.
“Best we can tell, that did not happen in this case,” Munsell said. “There are missing receipts, there are missing deposit slips. There is lots of information, documentation missing.”
Auditors also found that: No one reconciled the residents’ account monthly as required. The center had no written procedure manual for handling the account. The center did not set up individual receipt files as required. Individual account ledgers were allowed to have negative balances. Deposit slips were missing.
Cash returned by residents was placed in petty cash. Auditors were unable to trace the petty cash amounts to deposits into the residents’ bank account.
No documentation showed how pocket money given to residents was spent.
Checks written on the residents’ bank account were made out to employees.
Munsell said employees were sometimes written checks on Fridays and asked to cash them at the bank so that there would be enough cash on hand for residents through the weekend. She said business office personnel did not go to the bank and withdraw the money directly because the office had only one employee at any given time and that person couldn’t leave.
Charlie Green, director of disability services, declined to comment. Munsell said he asked her to speak on his behalf.
Munsell said her agency will decide what changes, if any, need to be made once the internal investigation is complete. It’s likely that an additional layer of oversight, like a random audit, will be added to ensure that the money is handled properly, she said.
The Department of Human Services also asked the Legislative Audit Division for assistance.
Charles Fiser, deputy legislative auditor for the Legislative Audit Division, said his division is almost finished with its report on this matter and will present it to the Legislative Joint Auditing Committee.
Fiser said he couldn’t “validate” or comment on the observations released by the Department of Human Services on Friday because he had not had time to review the material in detail.
“Their report is in draft form, and it could change,” he stressed.
Meanwhile, in an unrelated event, the Alexander center’s superintendent, Mark Stitch, was suspended for 10 days — from Aug. 26 through Monday — for failing to follow procedures to place employees on leave after suspected maltreatment of residents, Munsell said.
Munsell said she could not release specific information about the alleged maltreatment because of confidentiality laws, but she did say that Stitch is not the one suspected of the maltreatment. She also said it’s not a serious case of abuse.
In a letter to Stitch on Aug. 26, Green wrote that Stitch failed to meet his expectations but still offered praise.
“The staff and clients of Alexander are fortunate to have such a knowledgeable and caring individual directing the operations of the center. I am confident you can lead AHDC in the right direction,” Green wrote. Information for this article was contributed by C. S. Murphy of the Arkansas Democrat-Gazette.