AIDS Office fights audit results
Bay Area Reporter - San Francisco, CA
March 24, 2005
by Matthew S. Bajko
The city's AIDS Office is disputing audit results of two programs funded by Ryan White CARE Act dollars in which federal auditors have recommended as much as $340,000 be returned to the Department of Health and Human Services.
The federal department's Office of Inspector General conducted the audits of two contracts from the 2001 fiscal year between April 2003 and last August. The audits came at the bequest of the Senate's finance committee, which asked for audits nationwide to ensure Ryan White CARE Act monies were being properly spent.
An audit of the AIDS Offices' $1.5 million contract with Baker Places to provide short-term and emergency housing to low-income people living with HIV or AIDS found that the agency had inappropriately claimed costs of $216,461. Federal auditors have also questioned another $80,776 claimed for housing that may not have met the intent of the CARE Act.
The second audit found that the AIDS Office had reimbursed Continuum HIV Day Services $42,625 in excess of allowable program costs under a contract to provide integrative services to people living with HIV or AIDS.
In both instances, the AIDS Office is disputing the inspector general's findings and has raised concerns about the legality of the audits in the first place. In their written response to the audits, health department officials claim they received conflicting information regarding the "intent, purpose, and objective" of the audits of both agency's contracts. They claim at first they were informed that the visits were to "merely conduct a survey... and not an audit" and that the information provided to the inspectors "would only be used to select a local contractor to be audited."
Because local health officials, agency staff, or the local inspectors "were not clear on the intent of the audit," it "led to the remarks of the intital interviews as stated by the staff to be taken out of context." Thus, health department officials claim in their response that the audits contain "inconsistant statements regarding contractual relationships," fiscal processes and the organization and delivery of program services."
AIDS Office Jimmy Loyce could not be reached for comment. Nancy J. McGinness, director of the office of financial policy and oversight at the Health Resources and Services Administration, is in negotiations with the AIDS Office on if, and how much money, it will be required to reimburse.
"They are still negotiating with the agency on how this money and other recommendations will be handled," said Judy Holtz, a spokeswoman for the inspector general's Office of Audit Services. "We have not officially gotten word back oneither one. We do understand discussions are ongoing between HRSA, the agency, and the contractors."
If the AIDS Office is not sucessful in refuting the audits' recommendations, it could be required to pay back the money or the funds would be offset through future grant money, said Holtz.
"Or they could appeal that and it would just be written off," Holtz said.
As for the findings of the Baker Places audit - whose final report was released August 27, 2004 - the money dispute centers around how long the agency should have provided "short-term" housing services to its clients. The auditors claim that the agency "extended housing services beyond a reasonable limit." In their investigation, they found that three clients received housing for more than eight years and seven others for more than four years.
As such, they found that the AIDS Office did not establish a reasonable time limit for housing assistance and did not develop a strategy for ensuring clients could make the transition to a stable living situation." They also raised concerns about the AIDS Office's fiscal monitoring of the contract.
Jonathan Vernick, Baker Places exective director, did not return a call seeking comment by press time.
In its response to the audit's findings, the AIDS Office not only states that Baker Places provided services "consistent with the CARE Act" but that it "received adequate program monitoring." Office officials also called the auditor's criticisms of some client's length of stay as "unreasonable," bluntly calling the inspectors' decision to define short-term as meaning only one and half years "an arbitrary standard."
They also point to language in the contract that specified that clients' length of stay could be "as brief as six months or can be extended as long as necessary." Imposing an arbitrary time limit on clients "may only serve to destabilize clients and push clients out of housing and into homelessness," local officials stated in their response.
While the AIDS Office agreed that Baker Places made a "small mistake" in some of its documentation and billing, the officials nonetheless do not believe they merit paying back up to $298,000.
In the case of Continuum, the auditors - whose report was released February 9 of this year - found that the agency could not provide the needed documentation to support whether programs and services it billed the AIDS Office for were actually provided. Specifically, the auditors raised questions about primary care services and food packs given to clients.
However, Continuum officials contend the audit findings are due simply to a missing box of paperwork.
"It is a little embarrassing but it is as simple as that, actually. Really, what happened is we moved our clinic. There was some confusion where the box was. We finally found the box. It just took us a while to find it," said Continuum executive Director Mark Cloutier, who was tapped this week to lead the San Francisco AIDS Foundation.
Cloutier was not at the helm of Continuum during the time of the contract and he stressed that his comments should not be viewed as his predecessor having done anything wrong.
"There never was an issue of misuse of funding. I think it is very clear in the audit. It was just a matter of having the particular matter of documentation," he said. "We have remedied it. We have instituted better document management inside the organization. We have gone through a set of monitoring processes by the AIDS Office and it has not been a problem since."
In its response to the audit findings, the AIDS Office acknowledged that not all the proper records were available "at the time of the audit" but now that the records are available, there is no need to reimburse any funds.
Though it did concede that "Continuum should implement measures to track and safeguard documents during moving" and that it "should improve its (own) program monitoring to ensure that Continuum provides the expected program services."