Audit of DFSS Homeless Services
August 17, 2015
The Office of Inspector General (OIG) conducted an audit of the Department of Family and Support Services (DFSS) homeless services. The audit focused on how DFSS selected and monitored 57 homeless service providers, known as “delegate agencies,” in 2013 and 2014. During those two years DFSS spent approximately $60.0 million on homeless services provided by delegate agencies.
The objectives of the audit were to determine if,
- DFSS employed a process designed to ensure that it selected only qualified delegate agencies to provide homeless services;
- DFSS’s audit process ensured delegate agency compliance with program requirements; and
- DFSS held delegate agencies accountable for program performance.
OIG found that DFSS cannot assure delegate agencies that it scored all applications correctly. Although DFSS issued an appropriate Request for Proposal (RFP) and generally awarded funding to delegate agencies with the highest scores, OIG found that DFSS scored delegate agency applications inaccurately and inconsistently. DFSS reviewers erroneously awarded points for some programs, incorrectly calculated some applicants’ total scores, and assigned points in excess of the maximum available for an individual question. In addition to these inaccuracies, one application received facility assessment points despite not submitting a facility assessment, and one applicant was incorrectly penalized for having a finding of non-compliance in the previous year. Our review also found that DFSS did not follow its own guidelines for resolving substantial differences between reviewers’ scores. Without accurate and consistent application scoring, DFSS may not select the most qualified applicants.
OIG also found that, in at least once instance, DFSS allowed adverse findings from a program monitoring audit to go unrecorded. The Department uses these audits to monitor delegate agency performance. The audits are principally comprised of record reviews that check service performance reports and evaluate contract compliance. During an OIG observation, a DFSS auditor discovered missing documents, but did not record this issue because DFSS’s audit tool instructed her to report only on the completeness of documents in a chosen sample. The missing documents should have resulted in an adverse “finding” rating, but the Department gave the delegate agency a final rating of “no finding” because the missing documents were not a part of the chosen sample.
Finally, OIG found that while DFSS required delegate agencies to report on their performance, it did not hold them fully accountable for inaccurate reporting. DFSS required agencies to submit quarterly reports on their achievement of homeless service performance objectives and it reviewed the reports for accuracy. However, where DFSS found inaccurate reporting, the agencies were not required to take corrective action to prevent future misreporting. In addition, past misreporting was not recorded as an audit finding and thus was not factored into DFSS’ evaluation of the agency when deciding whether to award future contracts to the agency.
OIG concluded that DFSS may not select the most qualified agencies and fails to hold agencies fully accountable for all potential program inadequacies and inaccurate reporting. OIG recommended that DFSS improve training and quality control over its RFP application review process, design its audit tool to capture all known findings, and should also hold delegate agencies accountable for misreporting performance data.
In response to our audit findings and recommendations, DFSS stated that it has implemented an automated application scoring system to minimize human errors in the application scoring process and, going forward, “will strictly adhere” to its policy to resolve scoring discrepancies. To resolve the issue of unrecorded findings, DFSS has instructed its auditors to record observed issues irrespective of whether they appear in a sample. Finally, DFSS stated that beginning next year it will implement strategies to verify delegate agency performance.