Contract Monitoring

The Allegheny County Department of Human Services contracts with hundreds of service provider agencies to deliver most of the publicly-funded services offered by DHS. Discover how DHS monitors the fiscal and programmatic aspects of our contracted providers.

Overview of Fiscal Monitoring of DHS-Contracted Providers and DHS

Allegheny County, through DHS, contracts with hundreds of service provider agencies to deliver most of the publicly-funded services offered by DHS. DHS is committed to exemplary stewardship of public funds and full accountability throughout every aspect of our human services system. The scrutiny begins when an agency expresses an interest in providing services and supports to the most vulnerable individuals and families in our community as a DHS contractor and continues until that relationship is ended.

Providers Are Monitored

  • Prior to entering into a contract
    • Agencies must submit documentation evidencing their solvency and viability as part of the New Provider Application and in response to a contract solicitation (RFP/Q).
  • As a DHS-contracted agency or vendor
  • Allegheny County Controller's Office (may be jointly with DHS) conducts on-site, independent, financial-compliance reviews
    • timing and scope are based on particular circumstances
  • Service providers hire independent auditors to conduct an annual certified audit as per federal regulations
    • of providers expending $500,000 or more annually
      the results of which are scrutinized by DHS fiscal monitoring staff

In all cases, if warranted, the resultant report includes instructions for the provider to submit a Corrective Action Plan within a specified period of time.

  • Follow-up of concerns
    • Providers in violation of their contract
      • must submit a Corrective Action Plan (CAP)
      • must abide by a repayment plan of disallowed funds, if identified

DHS is Audited by the County Controller

The county controller's annual single audit of all Allegheny County departments, and therefore DHS, is conducted February through April by the county controller's office audit staff. The audit includes

  • review and evaluation of DHS internal controls
  • review of a sample of DHS contracts
  • review of a sample of certified audits of DHS service providers
  • review of a sample of invoices
  • review of a sample of DHS fiscal compliance review files

Independent Certified Audit Review

Reasons for Review

DHS-contracted providers who meet these expenditure guidelines

Federal - OMB Circular A-133

  • Federally-funded expenditures greater than or equal to $750,000

Note: Providers that expend a total federal award of less than $750,000 (from ALL funding sources) during its fiscal year, it is exempt from the above audit requirements. However, it is required to maintain auditable records of any federal, state and county funds that supplement such awards, and to provide access to such records by federal, state and county agencies or their designees for a period of at least four years.

State - GAGAS (Yellow Book)

  • PA Department of Human Services - Combined federal and PA DHS expenditures greater than or equal to $750,000
  • PA Department of Health - Department of Drug and Alcohol Program expenditures greater than or equal to $750,000

Items Reviewed

  • supplemental schedules reflecting Allegheny County revenue and expenditures
  • an opinion as to the fairness of the financial statements
  • disclosures for
    • internal controls
    • related-party transactions
    • fixed assets
    • self-reporting of fraud
    • pending litigation
    • the indirect cost allocation plan being used
    • other relevant information

Process

  • Service Provider retains an independent certified public accountant

  • The CPA conducts the audit

  • Service provider submits the completed audit report, management letter and Corrective Action Plan to the DHS Office of Administration for review. The audit report must include an opinion as to the fairness of the financial statements

  • Audit due dates:
    • June 30 fiscal year-end - due March 31 of the following year
    • Other fiscal year-end - due by last day of the ninth month following the agency's fiscal year end
  • DHS conducts a preliminary review to identify audits
    • containing findings (areas of concern) or questioned costs
    • for which a management letter regarding internal control weaknesses have been issued to the agency by the auditor of record
  • Corrective Action Plan required
    • if on-site review identifies a finding
    • if a management letter regarding internal control weaknesses have been issued to the agency by the auditor of record
    • to be submitted with the certified audit package
  • Must address
    • how "control weaknesses" or compliance findings will be resolved
    • the timeline for implementing the CAP
    • responsible agency staff person to implement the CAP

A member of the Contract Compliance Unit will review the CAP to assure it adequately addresses all findings and/or questioned costs and will issue a management decision letter to the agency within six months following receipt of the audit report.

Determination Letter

  • sent to the provider within six months of a review of the CAP

  • will indicate
    • "Accepted," if the CAP is determined to address the findings in the report
    • "Unaccepted," if more information is required before the CAP can be accepted
    • "In process," if the CAP has not yet been finalized due to administrative process

  • must eventually indicate "accepted" for the provider to continue in its contract with DHS

The audit acceptance review checklist is completed by the monitor to assure all necessary reports, schedules, findings, CAPs and management letters are included in the audit report package and are in the correct format. The provider is promptly notified if DHS has additional questions or come or all of their schedules are missing.

The notes to the audited financial statements are closely reviewed for related-party disclosures, self-insurance, administrative cost allocation plan, accounts receivable/payable to Allegheny County, fixed-asset disclosures self-reporting of fraud and pending litigation.

The final review checklist includes the reconciliation of costs per audit to payments made by DHS. The audited financial statements and schedules are reviewed for completeness, accuracy and logic.

A year-end audit reconciliation is completed, reconciling audit expenditures, expenditures eligible for DHS participation and final contract payments.

A letter is sent to the service provider following the final audit review and may request a return of funds (agency surplus) or close the audit.

Related Information

Allegheny County Provider Audit Guidelines(PDF, 3MB)

DHS On-site Review of Financial Compliance

Reasons for Review

Periodic and Mandated

  • Required by state/federal mandates
    • PA Department of Drug and Alcohol Programs (DDAP), annually November - March
    • Office of Developmental Supports room and board programs/person funds, every two years
  • DHS cyclical review schedule or senior management recommendation
    • Most other DHS-contracted providers
  • Contracts under $500,000

Cause-Related

  • Results of risk assessment
  • Findings or management comments included in the certified audit received by DHS
  • Concerns raised by the Director's Action Line (DAL)
  • Recommendations by DHS senior management
  • Recommendations by DHS Bureau of Financial Management, Budgets and Reports
  • Recommendations by DHS program staff

Note: DHS deputy directors and monitors are asked to voice any specific fiscal concerns or issues with the provider before the on-site audit begins,

Items Reviewed

Standard On-Site Financial Compliance Review

  • Internal accounting controls
  • Fee-for-service program controls
  • Fee-for-service billings
  • Invoice claims
  • Expenditures
  • Compliance with contract terms
  • Compliance with funding regulations (e.g., PA Department of Drug and Alcohol Programs (DDAP))
  • Personnel Action Plan for MH/D&A/ID service providers
  • Current year agreements
  • Board of directors composition and meeting minutes

Personnel Action Plan (PAP)

  • Required for all mental health, drug and alcohol and developmental supports providers

  • Includes agency policies concerning
    • Salaries
    • Fringe benefit rates
    • COLAs
    • Appointments
    • Bonuses
    • Merit salary increases
    • Promotions
    • Reclassifications
    • Position abolishment
    • Demotions
    • EEO/Affirmative Action
    • Authorizations to create new positions

  • Includes a current organizational chart and evidence of board of directors' approval

  • Reviewed to ensure conformity with governing regulations

Process

Priority Monitoring - High Risk to Low Risk

  • Determines the frequency of routine reviews based on
    • Whether the provider is required to submit a certified audit
    • The amount of funding
    • Results of prior reviews
    • Findings and recommendations included in prior audits or reviews

  • High-risk providers are monitored annually

  • Low-risk providers are monitored once every three years

On-site Monitoring

  • Based on a DHS-office-specific fiscal monitoring work program

  • Results in a report that is submitted to
    • The CEO and the chair of the Board of Directors of the service provider
    • County manager
    • DHS director
    • DHS deputy director

Corrective Action Plan

  • Required
    • If on-site review identifies a "finding" or area of concern
    • Within two weeks of the date of the report
  • Must address
    • How "control weaknesses" or compliance findings will be resolved
    • The timeline for implementing the CAP
    • Responsible agency staff person to implement the CAP

Determination Letter

  • Sent to the provider within six months of a review of the CAP

  • Will indicate
    • "Accepted," if the CAP is determined to address the findings in the report
    • "Unaccepted," if more information is required before the CAP can be accepted
    • "In process," if the CAP has not yet been finalized due to administrative process
  • Must eventually be "accepted" for the provider to continue in its contract with DHS

Technical Assistance

Annual technical assistance meeting for all service providers addresses

  • Contracting
  • Insurance
  • Invoicing
  • New regulations
  • Programmatic issues
  • Contract compliance information

On-site technical assistance is provided at the request of the provider.

Overview of Program Monitoring of Contracted DHS-Providers

Through each program office's program monitoring unit, DHS monitors all aspects of each service provider's program to ensure accountability for the expenditure of funds, to promote program effectiveness and efficiency and to ensure safety of people through quality service delivery.

Program monitoring on-site reviews of service providers is conducted based on

  • Regular monthly/quarterly/yearly scheduled visit
  • Reports from DAL, management, or any other source of concern or complaint
  • Technical assistance visit
  • Special circumstances or unusual incidents
  • Licensing reviews

Items/records reviewed during a program monitoring on-site review of service providers

  • Adherence to DHS contract and work statement
  • Facilities or site
  • Health and safety
  • Incident reports
  • Individual service plans
  • Licensing
  • Personnel
  • Policy and procedures
  • Quality of service
  • Rates

Practices regarding conducting a DHS program monitoring on-site review of service providers

DHS engages in a series of announced as well as unannounced monitoring visits to contracted service providers.

Monitoring may occur at a frequency based on fund type or may be triggered as a result of reported complaints or concerns.

To facilitate two-way communication between the department and its publics, DHS maintains the Director's Action Line, (DAL) (1-800-862-6783), which receives concerns/complaints about DHS-related services or personnel from people receiving services, interested parties, including stakeholders and the general public. Any concern which requires some level of investigation is recorded and forwarded to the appropriate county staff for managing the response, follow-up and ultimate resolution.

Additionally, DHS supports several other hotlines and an information and referral line that can be utilized by the public.

All program monitors have extensive knowledge within their field and are experienced with the rules outlined by funders and DHS contracts.

Monitoring visits are designed to collect data to validate whether or not programs are operated in accordance with their contract. Various report formats and monitoring tools provide information for a written report of findings and recommendations. A monitoring visit may include on-site interviews, a review of provider records and a review of the physical site.

A wide variety of records and information is reviewed and obtained on a monitoring visit. All monitoring visits are followed with a report(s) to the provider agency. These reports cite observations, findings and recommendations. A request for a Corrective Action Plan is made, if warranted.

In addition to contract monitors, DHS caseworkers in CYF and AAA are also responsible for monitoring DHS/person satisfaction with provider performance. Some general responsibilities include

  • Assistance to families and individuals to link, arrange for and obtain services
  • On-going assistance in managing these services and supports
  • Monitoring these services for appropriate quality, type, duration and frequency

Reviews by State and Federal Funding Agencies

DHS is subject to scheduled and discretionary on-site monitoring visits by various state and federal funding agencies. Funding agencies also review and forward the results of annual licensing for those providers required to be licensed. The following list details the monitoring review frequency and procedures performed by state and federal funding agencies.

Area Agency on Aging (AAA)

  • Corporation for National Service (Senior Companion Program) - Every two years
  • Senior Service America (Senior Employment Programs) - Annually
  • Pa. Department of Aging (Block grants and Title V) - Random, periodic reviews

Office of Behavioral Health (OBH)

  • Pa. Department of Human Services (Title XIX) - Periodic
  • Pa. Department of Drug and Alcohol Programs (All D&A fund types and programs) - Annually
  • Pa. Department of Human Services (Medical Assistance Transportation Program) - Annually

Office of Children, Youth and Families (CYF)

  • Social Security Administration (SSI and SSA) - Annual on-going review
  • Pa. Auditor General (IV-E, TANF and 148 Invoices) - Annually
  • Federal Title IV-E (Eligibility determinations and documentation) - Every three years

Office Community Services (OCS)

  • Three Rivers Workforce Investment Board Monitoring of Workforce Investment Act (WIA) Contracts - Annually
  • U.S. Department of Health and Human Services Administration for Families, Region III - Every three years
  • Pa. Department of Labor and Industry, Governor's Office of Citizen Services PennSERVE - Annually
  • Pa. Department of Community and Economic Development (CSBG) - Every two years
  • Pa. Department of Labor and Industry - Annually

Office of Developmental Supports (ODS)

  • Pa. Department of Human Services, Office of Developmental Programs - Periodic

Other

  • Other state and federal agencies - As needed for specific service inquiries 

Office-specific Program Monitoring

Each DHS program office is responsible for monitoring the programmatic aspects, including the provision of services, of the DHS-contracted agencies within its purview. The standards by which each agency is assessed are set by state and federal oversight agencies. Specific information about each office's program monitoring process is available below. A profile for each office is also supplied to give an overview of the services it provides.

Area Agency on Aging

Office of Behavioral Health

Office of Children, Youth and Families

Office of Community Services

Office of Developmental Supports

Doing Business with DHS

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