Fraud Questionnaire Guide

Attachment C

Instructions for Foster Care Fraud Review

Quality child welfare programs are not only concerned with the well being of families and children, but through appropriate administrative policies and procedures, can develop and implement methods to prevent, detect and eliminate potential fraudulent and wasteful use of Federal, State and local funds.

HDS is conducting periodic reviews of State administrative procedures and policies designed to detect and minimize occurrences of fraud and waste in Federally supported foster care programs using private group homes and institutions through purchase of service agreements. These reviews have been integrated into the tithe IV-E foster care financial reviews. The review will focus on three important administrative processes: auditing, rate setting and licensing. The Interview Guide being used for this purpose was developed in cooperation with the DHHS Audit Agency. The following describes the process and procedures to be used to conduct fraud reviews.

Preparing for the Review

The Regional Office should request copies of pertinent State audit policies, audit standards and manuals, audit data, annual reports of State audits,and rate setting procedures at least 6-8 weeks in advance of the review. Prior analysis of this information will facilitate the interview, permit more pertinent questions to be asked during the interview and assist in preparing the Federal review team. A request should be made to interview the State agency's chief fiscal officer. Avoid having a large group of State staff assembled for the review. The interview guide should be shared with the agency's chief fiscal program officer prior to the field visit.

Interview

We suggest the interview be conducted by a two person team using the Interview Guide. The guide deals with subjects such as:

Are public and private foster care group homes and institutions audited on a regular basis’
Are the audits conducted in accordance with GAO standards’
Are there audit manuals to provide guidance to auditors’
Do the audits test the provider's internal financial management system and the State agency's existing internal controls over administrative and accounting functions’
Who is responsible for the rate setting process’
Does the rate setting process establish a uniform basis for charging costs’
Are costs analyzed to establish a measure of "reasonable and necessary"’
How are rates established’
Is there adequate documentation to support the determination of rates’
How are rates for out-of-state placements determined’

Report to the State

As the fraud review is integrated with the title IV-E foster care review, a section of the complete review should address the issues relating to the prevention and detection of fraud. This section should include pertinent information acquired through the interview of State officials and review of State materials. It should describe the review team's understanding of State practices, describe shortcomings or problems in State practices to control fraud and waste and make recommendations to improve performance.

When the State is given 30 days to review the entire title IV-E foster care review draft report, it should also have the opportunity the review the section dealing with fraud and respond or comment within 30 days. A copy of the State's comments should be appended to the final report. Copies of the final report should be sent to the following:

Regional Director, HHS
Regional Administrator, HDS,
Director, Office of Management Services, HDS
Director, Office of Regional Operations, HDS
Commissioner, ACYF

Conclusion

HDS and the Department are prepared to work with the States to strengthen and improve practices to control and minimize occurrences of fraud and wasteful expenditure of funds for foster care group homes and institutions. By developing a body of information about State practices, HDS can serve as a conduit to the States to provide information on successful approaches in dealing with this problem.

Attachment

Table of Contents-    Financial Review Guide for On-Site Reviews of the title IV-E Foster Care Program
Attachment A-    Eligibility Checklist
Attachment B-   Sampling Guidance
Foster Care Fraud Review Interview Guide