Sincerely,
Jennifer Donnelly
Director
Referred to committee on Children and Family Law.
__________________
Agency Reports
State of Wisconsin
Legislative Audit Bureau
Madison
October 2, 2008
To the Honorable, the Assembly:
We have completed a review of the Department of Administration's (DOA's) oversight of a contract for print and mail staffing services, which we initiated in response to a complaint reported on the fraud, waste, and mismanagement hotline established by
2007 Wisconsin Act 126.
The complaint alleged that DOA was not exercising adequate oversight of contract staff provided by Spherion Corporation, whose employees filled 34.0 of 58.0 full-time equivalent positions in DOA's Bureau of Publishing and Distribution as of June 2008. We did not substantiate any allegations related to workplace safety concerns, a hostile work environment, and fraudulent time recording by contract staff. However, our report includes both a recommendation for DOA to recalculate its cost-benefit analysis related to print and mail service staffing and several strategies to better control state costs associated with DOA's print and mail services.
In fiscal year (FY) 2007-08, DOA spent $20.4 million on print and mail services, including $1.7 million paid to Spherion for staffing services. The current contract with Spherion will expire on June 30, 2009, and DOA has begun preparations to solicit bids in October or November 2008. Using a cost-benefit model developed by DOA, we estimate that as much as $616,500 could be saved in the five-year period from FY 2009-10 through FY 2013-14 if state staff filled all print and mail positions currently filled by contract staff. However, contract costs will be difficult to estimate until DOA has received vendors' bids, and the actual cost of adding state staff is difficult to estimate because of the uncertainty of future salary, fringe benefit, and recruiting costs.
If DOA chooses to continue to contract for some or all print and mail staff in the future, we recommend formalizing billing procedures for supervisory staff, prohibiting the contractor from billing for time new contract staff are trained in the operation of printing and other equipment, and including in the contract standard provisions to impose damages if confidential information is disclosed.
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We appreciate the courtesy and cooperation extended to us by DOA and Spherion in conducting this review.
Sincerely,
Janice Mueller
State Auditor
__________________
State of Wisconsin
Legislative Audit Bureau
Madison
October 8, 2008
To the Honorable, the Assembly:
We have completed financial audits of Mendota and Winnebago Mental Health Institutes for the period July 1, 2006, through June 30, 2007. The audits were requested by the Department of Health Services (formerly the Department of Health and Family Services) to comply with requirements of the Joint Commission on Accreditation of Healthcare Organizations. We were able to express an unqualified opinion on each Institute's financial statements.
Mendota and Winnebago Mental Health Institutes are licensed and accredited hospitals that provide specialized diagnostic, evaluation, and treatment services for mentally ill children and adults. The Institutes also provide services to forensic patients referred to them through the criminal justice system. The Institutes are funded through a mix of general purpose revenue and program revenue.
In FY 2006-07, each Institute reported an operating loss of $3.7 million, in part because operating expenses increased at a faster pace than operating revenues. Salaries and fringe benefit expenses, which were the largest expenditure category at each Institute, increased by $5.7 million at Mendota and $3.5 million at Winnebago. To help address the Institutes' operating losses, the Department increased daily patient rates by 9.5 percent at each Institute effective on October 15, 2007, and approved increases of 9.5 percent at Mendota and 11 percent at Winnebago to be effective October 12, 2008.
Mendota's overall net assets increased by $1.5 million, while Winnebago's declined by $2.6 million for FY 2006-07. Mendota's increase in net assets is primarily attributable to proceeds from the sale of general purpose revenue funded bonds, which it received to install equipment to reduce air pollution at the power plant it operates.
We continued to monitor the status of prior-year concerns related to the administration of approximately $476,000 in client funds by the Program of Assertive Community Treatment, an outpatient unit of Mendota. In our Report on Internal Control and Compliance, we report that the Department has taken some steps to improve controls subsequent to our audit period. However, we still noted concerns during FY 2006-07.
We appreciate the courtesy and cooperation extended to us by Department of Health Services staff during our audit. A response from the Department follows our report.
Respectfully Submitted,
Janice Mueller
State Auditor
