Governor's Office of Elderly Affairs · August 2017 Audit Control # 80170020 1 ... Parish (see Exhibits 1 and 2 on pages 3-5). GOEA did not have procedures in place to ensure compliance

GOVERNOR’S OFFICE OF ELDERLY AFFAIRS STATE OF LOUISIANA

FINANCIAL AUDIT SERVICES PROCEDURAL REPORT

ISSUED AUGUST 23, 2017

LOUISIANA LEGISLATIVE AUDITOR 1600 NORTH THIRD STREET

POST OFFICE BOX 94397 BATON ROUGE, LOUISIANA 70804-9397

LEGISLATIVE AUDITOR DARYL G. PURPERA, CPA, CFE

ASSISTANT LEGISLATIVE AUDITOR FOR STATE AUDIT SERVICES

NICOLE B. EDMONSON, CIA, CGAP, MPA

DIRECTOR OF FINANCIAL AUDIT ERNEST F. SUMMERVILLE, JR., CPA

Under the provisions of state law, this report is a public document. A copy of this report has been submitted to the Governor, to the Attorney General, and to other public officials as required by state law. A copy of this report is available for public inspection at the Baton Rouge office of the Louisiana Legislative Auditor. This document is produced by the Louisiana Legislative Auditor, State of Louisiana, Post Office Box 94397, Baton Rouge, Louisiana 70804-9397 in accordance with Louisiana Revised Statute 24:513. One copy of this public document was produced at an approximate cost of $0.25. This material was produced in accordance with the standards for state agencies established pursuant to R.S. 43:31. This report is available on the Legislative Auditor’s website at www.lla.la.gov. When contacting the office, you may refer to Agency ID No. 3532 or Report ID No. 80170020 for additional information. In compliance with the Americans With Disabilities Act, if you need special assistance relative to this document, or any documents of the Legislative Auditor, please contact Elizabeth Coxe, Chief Administrative Officer, at 225-339-3800.

Louisiana Legislative Auditor Daryl G. Purpera, CPA, CFE Governor’s Office of Elderly Affairs August 2017 Audit Control # 80170020

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Introduction The primary purpose of our procedures at the Governor’s Office of Elderly Affairs (GOEA) was to evaluate certain controls GOEA uses to ensure accurate financial reporting and transparency, compliance with applicable laws and regulations, and to provide overall accountability over public funds. GOEA serves as a focal point for Louisiana’s senior citizens and administers a broad range of home and community-based services through a network of Area Agencies on Aging.

Results of Our Procedures We evaluated GOEA’s operations and system of internal control through inquiry, observation, and review of its policies and procedures, including a review of the laws and regulations applicable to GOEA. Based on the documentation of GOEA’s controls and our understanding of related laws and regulations, we performed procedures on selected controls and transactions relating to travel expenses, payroll expenses, senior center expenses, SenioRx expenses, movable property, and Medicare Improvements for Patients and Providers Act grant expenses.

Current-Year Finding Improper Allocation of Senior Center Funds GOEA did not properly allocate state appropriations for senior centers as required by state law, resulting in incorrect allocations to all 64 parish councils on aging. Of the 64 parish allocations for fiscal years 2015 through 2017, 55 parish councils were over-allocated funds totaling $2,070,657 and the remaining 9 were under-allocated by $2,070,657. The differences range between $591,462 over-allocated to Jefferson Parish and $1,449,973 under-allocated to Ouachita Parish (see Exhibits 1 and 2 on pages 3-5). GOEA did not have procedures in place to ensure compliance with Louisiana Revised Statute (R.S.) 46:1608 in allocating appropriations to the parishes. R.S. 46:1608 states, in part, that GOEA shall include funds in its annual budget request for increases in funding based on a formula using the number of elderly as shown by the latest official census estimate. Additionally, the balance of any appropriated funds remaining shall be allocated to the parish

Governor’s Office of Elderly Affairs Procedural Report

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councils of Beauregard, Bienville, Cameron, Iberville, Natchitoches, Plaquemines, Pointe Coupee, St. John, Vernon, and Winn in an amount equal to the 1982-1983 funding level. The remaining portion shall be divided equally between the parish councils of Orleans and Ouachita. GOEA did not use the latest official census estimates in the base formula to allocate senior center funds as required by the statute, and did not properly consider the 1982-1983 funding levels for certain parishes specifically named in the statute. Upon noting errors in the allocation in fiscal year 2017, our procedures were extended to include a three-year period; however, we are unsure how many additional years these allocation errors may have occurred. Management should implement procedures to ensure compliance with R.S. 46:1608 in the preparation of the annual budget request and in the allocation of appropriations to the parish councils on aging for senior centers. Management should also work with each parish council on aging on the appropriate resolution to allocation errors made in previous fiscal years. Management concurred in part with the finding and noted that budget requests in fiscal year 2017 included increases in funding based on the latest census estimates, but were not funded (see Appendix A). Additional Comments: Although the increase in funding for fiscal year 2017 was requested and denied, GOEA’s total appropriations for senior centers, including supplemental senior center funds, were adequate to allocate funds in accordance with the funding formula specified in R.S. 46:1608. However, GOEA elected to fund senior centers in a manner consistent with allocations in previous years, which was not in accordance with the statutory funding formula.


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Exhibit 1: Fiscal Years 2015 - 2017 Senior Center Fund Allocations

Under Allocations Over Allocations (Continued)

Parish GOEA

Allocations Allocations per Audit1

Under Allocated

Parish Allocations per GOEA

Allocations per Audit1

Over Allocated

1 Ouachita $693,269 $2,143,242 ($1,449,973) 27 Assumption $131,218 $104,282 $26,936

2 Orleans 2,274,392 2,736,046 (461,654) 28 Avoyelles 191,606 164,723 26,8833 St. Tammany 742,748 810,181 (67,433) 29 East Feliciana 122,780 96,130 26,650

4 Lafayette 575,957 610,068 (34,111) 30 Evangeline 156,616 130,105 26,5115 Caddo 818,228 835,983 (17,755) 31 St. James 124,255 97,834 26,4216 Calcasieu 597,278 611,554 (14,276) 32 Pointe Coupee 140,264 114,166 26,0987 Livingston 356,267 370,099 (13,832) 33 Webster 206,032 180,169 25,8638 Ascension 286,247 292,353 (6,106) 34 Vernon 171,530 145,697 25,833

9 Tangipahoa 376,439 381,956 (5,517) 35 West Baton Rouge 120,218 94,866 25,352

Total $6,720,825 $8,791,482 ($2,070,657) 36 St. Mary 216,983 191,804 25,17937 Lincoln 176,066 151,094 24,972

38 Plaquemines 115,463 90,903 24,560Over Allocations 39 Beauregard 163,930 140,226 23,704

Parish Allocations per GOEA

Allocations per Audit1

Over Allocated

40 Washington 213,053 189,945 23,1081 Jefferson $2,037,412 $1,445,950 $591,462 41 Union 138,424 115,549 22,8752 DeSoto 209,359 120,356 89,003 42 Acadia 231,731 209,198 22,533

3 East Baton Rouge 1,326,475 1,238,107 88,368 43 St. John 171,373 150,405 20,968

4 Grant 132,184 93,290 38,894 44 Vermilion 223,759 204,448 19,3115 Caldwell 107,738 75,000 32,738 45 St. Landry 310,271 292,322 17,9496 East Carroll 107,738 75,000 32,738 46 Iberia 257,107 239,998 17,1097 Madison 107,738 75,000 32,738 47 St. Martin 197,498 180,646 16,8528 Red River 107,737 75,000 32,737 48 Cameron 107,738 90,999 16,7399 St. Helena 107,737 75,000 32,737 49 St. Charles 182,143 165,427 16,716

10 Tensas 107,737 75,000 32,737 50 Iberville 151,079 135,000 16,07911 West Feliciana 107,737 75,000 32,737 51 Lafourche 323,686 313,399 10,28712 Catahoula 107,365 75,000 32,365 52 St. Bernard 134,345 124,754 9,59113 Natchitoches 185,336 153,145 32,191 53 Terrebonne 343,931 336,575 7,35614 Claiborne 120,013 88,702 31,311 54 Rapides 451,891 446,017 5,874

15 Allen 133,349 102,553 30,796 55 Bossier 370,207 366,816 3,391

16 West Carroll 105,304 75,000 30,304 Total $12,268,071 $10,197,414 $2,070,65717 Franklin 131,668 101,392 30,27618 Winn 120,448 90,195 30,253 1In accordance with R.S. 46:1608 19 LaSalle 108,293 78,056 30,23720 Concordia 126,184 96,092 30,09221 Jackson 119,471 89,495 29,97622 Bienville 116,051 86,484 29,56723 Richland 125,110 96,114 28,99624 Jefferson Davis 158,647 129,923 28,72425 Sabine 151,607 123,112 28,495

26 Morehouse 154,436 125,951 28,485


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Exhibit 2: Senior Center Over (Under) Allocations by Fiscal Year

Fiscal Year Over (Under) Allocation

Parish 2015 2016 2017 Total

1 Acadia $8,747 $7,779 $6,007 $22,533

2 Allen $10,467 $10,338 $9,991 $30,796

3 Ascension $1,978 ($1,846) ($6,238) ($6,106)

4 Assumption $9,654 $8,856 $8,426 $26,936

5 Avoyelles $9,373 $8,965 $8,545 $26,883

6 Beauregard $8,769 $7,799 $7,136 $23,704

7 Bienville $9,856 $9,855 $9,856 $29,567

8 Bossier $4,313 $1,603 ($2,525) $3,391

9 Caddo ($560) ($5,782) ($11,413) ($17,755)

10 Calcasieu $527 ($4,161) ($10,642) ($14,276)

11 Caldwell $10,913 $10,912 $10,913 $32,738

12 Cameron $5,580 $5,579 $5,580 $16,739

13 Catahoula $10,788 $10,789 $10,788 $32,365

14 Claiborne $10,487 $10,352 $10,472 $31,311

15 Concordia $10,344 $10,063 $9,685 $30,092

16 DeSoto $30,199 $29,739 $29,065 $89,003

17 East Baton Rouge $41,432 $29,668 $17,268 $88,368

18 East Carroll $10,913 $10,913 $10,912 $32,738

19 East Feliciana $9,400 $9,088 $8,162 $26,650

20 Evangeline $9,340 $8,971 $8,200 $26,511

21 Franklin $10,203 $10,171 $9,902 $30,276

22 Grant $13,530 $12,840 $12,524 $38,894

23 Iberia $7,453 $5,908 $3,748 $17,109

24 Iberville $5,359 $5,360 $5,360 $16,079

25 Jackson $10,203 $9,943 $9,830 $29,976

26 Jefferson $208,568 $197,101 $185,793 $591,462

27 Jefferson Davis $9,866 $9,655 $9,203 $28,724

28 Lafayette ($3,503) ($10,839) ($19,769) ($34,111)

29 Lafourche $5,537 $3,683 $1,067 $10,287

30 LaSalle $10,228 $10,077 $9,932 $30,237

31 Lincoln $9,057 $8,240 $7,675 $24,972

32 Livingston ($70) ($4,788) ($8,974) ($13,832)

33 Madison $10,913 $10,912 $10,913 $32,738

34 Morehouse $10,021 $9,468 $8,996 $28,485

35 Natchitoches $11,299 $11,070 $9,822 $32,191

36 Orleans ($199,418) ($156,497) ($105,739) ($461,654)

37 Ouachita ($541,610) ($485,818) ($422,545) ($1,449,973)


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Fiscal Year Over (Under) Allocation

Parish 2015 2016 2017 Total

38 Plaquemines $8,421 $8,453 $7,686 $24,560

39 Pointe Coupee $9,286 $8,774 $8,038 $26,098

40 Rapides $4,765 $2,192 ($1,083) $5,874

41 Red River $10,912 $10,913 $10,912 $32,737

42 Richland $9,834 $9,773 $9,389 $28,996

43 Sabine $9,886 $9,561 $9,048 $28,495

44 St. Bernard $5,169 $3,459 $963 $9,591

45 St. Charles $7,405 $5,464 $3,847 $16,716

46 St. Helena $10,912 $10,912 $10,913 $32,737

47 St. James $9,611 $8,887 $7,923 $26,421

48 St. John $8,111 $7,187 $5,670 $20,968

49 St. Landry $8,007 $5,924 $4,018 $17,949

50 St. Martin $7,468 $5,811 $3,573 $16,852

51 St. Mary $9,157 $8,601 $7,421 $25,179

52 St. Tammany ($11,247) ($22,327) ($33,859) ($67,433)

53 Tangipahoa $2,547 ($1,711) ($6,353) ($5,517)

54 Tensas $10,912 $10,912 $10,913 $32,737

55 Terrebonne $5,442 $2,532 ($618) $7,356

56 Union $8,103 $7,648 $7,124 $22,875

57 Vermilion $7,970 $6,458 $4,883 $19,311

58 Vernon $9,147 $8,643 $8,043 $25,833

59 Washington $8,701 $7,814 $6,593 $23,108

60 Webster $9,050 $8,572 $8,241 $25,863

61 West Baton Rouge $9,178 $8,483 $7,691 $25,352

62 West Carroll $10,101 $10,102 $10,101 $30,304

63 West Feliciana $10,912 $10,913 $10,912 $32,737

64 Winn $10,084 $10,084 $10,085 $30,253


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Travel Expenses GOEA has one controlled billed account (CBA) for airfare, hotels, and car rentals. Due to the inherent risks associated with this account, we obtained an understanding of GOEA’s related policies and procedures. We analyzed CBA transactions for the period July 1, 2016, through January 31, 2017, and randomly selected 10 transactions for review. Based on our review of the selected transactions, we determined that GOEA had adequate controls to ensure that expenses were properly approved and made for proper business purposes; sufficient documentation was maintained to support the expenses; and there was evidence of review by a supervisor.

Payroll Expenses We obtained an understanding of GOEA’s controls over the time and attendance function and reviewed selected employee time statements, including overtime earned or leave taken, if applicable. Based on the results of our procedures, GOEA has adequate controls over the time and attendance function to ensure timely entry and certification of hours worked by employees; timely review and approval of employee time statements, including leave and overtime requests, by the supervisors; leave taken does not exceed the employee’s leave balance; and timely review of the time statements by the time administrators.

Senior Center Expenses In accordance with R.S. 46:1608, the legislature appropriates funds for GOEA to allocate to parish councils on aging for senior centers, a minimum of $25,000, plus $5.18 per person above a base population of 3,000 persons age 60 or older residing in the parish, as shown by the latest official census estimate. We analyzed and recalculated GOEA’s allocations to determine if the allocations were distributed in accordance with state law. Based on the results of our procedures, we determined that GOEA did not allocate senior center funds in accordance with state law (see Current-year Finding section).

SenioRx Expenses R.S. 40:1219.3 established the Louisiana Rx and Aging and Disability Information Station Programs within GOEA to help seniors and persons with adult-onset disabilities in accessing manufacturers’ discount cards and pharmaceutical assistance programs. GOEA is required to prepare and submit quarterly reports on the programs to the governor with data including the number of clients served, the number of prescriptions filled and refilled, the value of the drugs provided, and the number and type of supports and services assistance provided. Based on the results of our procedures, we determined that GOEA properly submitted each quarterly report for fiscal year 2017 as required by state law.


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Movable Property We obtained an understanding of GOEA’s controls over movable property and performed procedures to determine the existence of items on the property listing and the completeness of that listing. We also obtained and reviewed the Certification of Annual Property Inventory for fiscal year 2017, totaling $302,259 and noted there was no unlocated property. Based on the results of our procedures, assets were properly safeguarded and recorded and complied with state property regulations.

Medicare Improvements for Patients and Providers Act of 2008 We obtained an understanding of GOEA’s policies and procedures over the Medicare Improvements for Patients and Providers Act grant. Based on our review of selected transactions, we determined that GOEA’s controls over compliance with program requirements were in place and operating effectively.

Trend Analysis We compared the most current and prior-year financial activity using the GOEA’s annual fiscal reports and/or system-generated reports to identify trends and obtained explanations from GOEA’s management for significant variances that could potentially indicate areas of risk. Management provided reasonable explanations for all significant variances. We prepared a summary of GOEA’s expenses during the fiscal year, as of June 30, 2017 (see Exhibit 3). Expenses for the Older Americans Act federal programs (Titles III, IV, V, and VII) comprised nearly 69% of total expenses. These federal programs foster and assist in the development of cooperative agreements with federal, state, and local agencies, organizations and providers of supportive services to provide a wide range of support services for older Louisianans.


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Exhibit 3: GOEA Expenses

(As of June 30, 2017) Total: $41,978,962

Under Louisiana Revised Statute 24:513, this report is a public document, and it has been distributed to appropriate public officials.

Respectfully submitted, Daryl G. Purpera, CPA, CFE Legislative Auditor

EM:BQD:EFS:aa GOEA2017

$28,961,527 69%

$6,329,631 15%

$3,294,849 8%

$3,392,955 8%

Older Americans Act programs

Senior Centers

Parish Councils on Aging

Administrative

Source: Prepared by legislative auditor's staff using agency-generated reports

APPENDIX A: MANAGEMENT’S RESPONSE

A. 1

B.1

APPENDIX B: SCOPE AND METHODOLOGY

We performed certain procedures at the Governor’s Office of Elderly Affairs (GOEA) for the period from July 1, 2016, through June 30, 2017. Our objective was to evaluate certain internal controls GOEA uses to ensure accurate financial reporting and transparency, compliance with applicable laws and regulations, and to provide overall accountability over public funds. The scope of our procedures, which are summarized below, was significantly less than an audit conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. We did not audit or review GOEA’s Annual Fiscal Report, and accordingly, we do not express an opinion on that report. GOEA accounts are an integral part of the State of Louisiana’s financial statements, upon which the Louisiana Legislative Auditor expresses opinions.

We evaluated GOEA’s operations and system of internal control though inquiry, observation, and review of its policies and procedures, including a review of the laws and regulations applicable to GOEA.

Based on the documentation of GOEA’s controls and our understanding of related laws and regulations, we performed procedures on selected controls and transactions relating to travel expenses, payroll expenses, senior center expenses, SenioRx expenses, movable property, and Medicare Enrollment Assistance Program expenses.

We compared the most current and prior-year financial activity using GOEA’s annual fiscal reports and/or system-generated reports and obtained explanations from GOEA’s management for any significant variances that could potentially indicate areas of risk.

The purpose of this report is solely to describe the scope of work at GOEA and not to provide an opinion on the effectiveness of GOEA’s internal control over financial reporting or on compliance. Accordingly, this report is not intended to be, and should not be, used for any other purpose.

PPENDIX A: SCOPE AND METHODOLOGY

Documents

Governor's Office of Elderly Affairs · August 2017 Audit Control # 80170020 1 ... Parish (see Exhibits 1 and 2 on pages 3-5). GOEA did not have procedures in place to ensure compliance