Follow-up review. Brain and Spinal Injury Trust Fund Commission

Follow-Up Review 10-05

February 2010

Why we did this review
This follow-up review was conducted to determine the extent to which the Brain and Spinal Trust Fund Commission has addressed the recommendations presented in our September 2007 Performance Audit.
The purpose of the original audit was to assess effectiveness and efficiency by determining if the Commission was operating in accordance with the Constitutional amendment that created the Fund and its enabling legislation. The audit team also reviewed the Commission's operations to determine whether controls were in place to ensure only those who were eligible for services received awards and only eligible items were purchased. Finally, the audit looked at alternatives for improving the Commission's service delivery model.
Who we are
The Performance Audit Operations Division was established in 1971 to conduct in-depth reviews of state programs. The purpose of these reviews is to determine if programs are meeting their goals and objectives; provide measurements of program results and effectiveness; identify other means of meeting goals; evaluate the efficiency of resource allocation; and assess compliance with laws and regulations.
Website: www.audits.state.ga.us Phone: 404-657-5220 Fax: 404-656-7535

Follow-Up Review Brain and Spinal Injury Trust Fund Commission
The Commission has improved its distribution operations; however, further action is necessary
What we found
The Brain and Spinal Injury Trust Fund Commission (the Commission) has taken steps to clarify statutory language regarding whether the Trust Fund operates in compliance with the Constitutional amendment and the state law that established the Fund. The original audit stated that the Commission did not include in its award categories medical expenses that were the result of the traumatic brain or spinal cord injury. The audit noted that the Commission was potentially excluding a portion of the "care and rehabilitative services" described in statute. In December 2009, the Attorney General issued a letter stating the statutory language is broad enough to allow the Commission to exclude certain services based on the criteria it sets. The Commission's distribution policies deem expenses incurred before the Commission's approval ineligible, which include medical care associated with the applicant's initial injury.
Funding for goods and services related to home modifications and transportation continues to represent the majority of awards; the award amounts increased from 66% to 77% of the total expenditures during fiscal years 2008-2009. Of the transportation expenditures in those two years, approximately 17% (nearly $450,000 of $2.6 million) were for the purchase and repair of standard, unmodified vehicles. Total awards for eligible medical care and rehabilitative services decreased from 7.6% in fiscal year 2007 to 6.2% of the total expenditures in the past two fiscal years.
While the Commission has not changed its service delivery model, it has taken action to correct some of the problems identified in its

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distribution operations, though more improvements are needed. It should be noted that the Brain and Spinal Injury Trust Fund was established through a 1998 Constitutional amendment; however, the Commission was statutorily established and given responsibility for establishing policies and procedures for distribution of the funds. As such, it also has authority to make changes to the system as deemed necessary.
Following the release of the audit, the Commission now requires all applicants to submit documentation of Georgia residency, which could include a copy of a driver's license, utility bill, mortgage statement, or employer verification such as a pay stub. The Commission's distribution policies also require the applicants to complete a statement of income to indicate their personal financial and non-financial assets as well as their access to public and private insurance. However, in its current form, the statement of income relies solely on the applicants' self-reported information of only their monthly or annual income. The Commission has also created an Outcome Measurement Tool (OMT) to be included in the application in 2010. Applicants answer a series of questions related to involvement in the community, accesss to transportation, and health. According to Commission staff, it has not been determined how the OMT will be used to prioritize applicants.
Though the Commission has taken steps to verify applicant eligibility and prioritize based on need, further improvements are needed. As noted in our original audit, there is no evidence that all applicants are required to provide a verifiable statement of need (such as a physician recommendation) that demonstrates that the goods or services requested are related to their injury. Additionally, the audit team noted that out of a sample of 18 applications awarded in fiscal year 2010, only one provided verifiable documentation showing the applicant had exhausted other options and the Trust Fund was the payer of last resort.
At the time of the original audit, the Commission had established a policy stating that goods and services must be reasonably priced and in line with identified usual and customary costs; however, it had not established benchmarks for pricing and had not required applicants to provide sufficient information to allow for price comparisons. While the Commission now requires applicants to submit at least one price quote for the items and services requested, staff does not regularly conduct assessments to determine if the selected vendor offers the item for the best price. It should be noted that the Commission has established an agreement with the Department of Community Affairs to select contractors that will comply with standards and code as they perform home modifications for Trust Fund awardees.
According to Commission staff, revisions to the distribution policies have helped lower administrative expenses from 24% in fiscal years 2005-2007 to 20% in fiscal year 2009. The Commission has also decreased its operating costs by eliminating positions, furloughing employees, and trimming office expenses, travel, and printing.
As recommended, the Commission has taken action to release unclaimed awards back into the Trust Fund. The Commission adopted a policy in August 2007 to limit a grant to one year after the Governor's approval. If no funds have been spent after a year, the money is rescinded. Commission staff may make exceptions and leave the funds open for longer than a year if they determine the awardee is experiencing "hardship" while attempting to obtain the good or service. Since the original audit, the amount of funds left unclaimed after a year has decreased by 94% from $605,000 to $36,500.
Finally, the Commission has implemented better internal controls over its purchasing procedures and has worked to ensure its new database contains sufficient controls for greater reliability and accuracy, though tighter controls are recommended.
The following table summarizes the findings and recommendations in our 2007 report and actions taken by the Commission to address them. A copy of the 2007 program evaluation report may be accessed at http://www.audits.state.ga.us/internet/pao/rpt_main.html.

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Brain and Spinal Injury Trust Fund Commission Follow-Up Review, February 2010

Original Findings/ Recommendations

Current Status

Action should be taken to ensure that the Commission operates in compliance with the Constitutional amendment and the state law that establishes the Fund. The Commission does not fund medical expenses that were the result of the traumatic brain or spinal cord injury, thus potentially excluding a portion of the "care and rehabilitative services" in statute. Additionally, the Commission has distributed a large proportion of its payments to support home modifications and transportation rather than medical care and rehabilitative services.

Fully Implemented - In December 2009, the Attorney General issued a letter stating the language in Georgia statute is broad enough to allow the Commission to exclude certain services (such as prior medical care) based on the criteria it sets. According to the Attorney General, the statute does not "limit or specify the type of care or rehabilitative service" for which distributions are applicable.
The Commission continues to award the majority of its funding to goods and services related to home modifications and transportation. The percentage of funds spent on items such as modified vans and wood flooring has increased from 66% at the time of the original audit to approximately 77% throughout fiscal years 2008-2009. Of the transportation expenditures for those two years, approximately 17% were for the purchase and repair of standard, unmodified vehicles. Funding for medical services made up 6.2% in the past two fiscal years, a drop from 7.6% in fiscal year 2007.

The Commission should take steps to reduce its administrative expenses, thereby increasing the amount of funds available for its overall purpose of providing care and rehabilitative services. In fiscal years 2005-2007, administrative expenses accounted for nearly 24% of the Trust Fund's total expenditures.

Fully Implemented - In fiscal year 2009, administrative expenses accounted for 20% of the Trust Fund's total expenditures. According to Commission staff, lower operating costs have been achieved by eliminating positions, furloughing employees, and decreasing office expenses, travel, and printing. Due to the Trust Fund's decreased reserves, distribution awards were also lower in fiscal year 2009.

The Commission should take steps to operate in a more efficient and effective manner and provide better stewardship of the state funds that it administers.

Partially Implemented - The Commission has not altered its service delivery model for processing and awarding applications. According to Commission staff, they spend an average of 70 days helping an applicant complete the application. Applications are reviewed a minimum of seven times before the distribution award is approved.
As noted in the following sections, the Commission has taken some steps to improve its current process, which include requiring documentation of Georgia residency, creating a tool for prioritizing applicants, and rescinding unused distribution awards after one year.
In its response to the follow-up review, staff noted that "The Commission is satisfied with the delivery model currently in use. Improvements to the model are under continuous discussion." It also noted that the 70 days for applicants to complete applications and the assistance required is "due to the cognitive and physical deficits that impede our applicants."

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Brain and Spinal Injury Trust Fund Commission Follow-Up Review, February 2010

Original Findings/ Recommendations
Action should be taken to ensure that only those applicants who meet the eligibility criteria receive awards from the Trust Fund. Applicants are not required to include documentation that they are Georgia residents or that they have exhausted other fund sources. Additionally, physicians' letters indicating the nature and cause of the applicants' injuries are not verified.

Current Status
Partially Implemented Commission policies now require applicants to submit documentation of legal residency in Georgia (driver's license, utility bill, etc.). Applicants are also required to look into other sources of funding before their request is processed; however, there is no evidence the Commission verifies this.
The audit team reviewed a sample of 18 applications awarded in fiscal year 2010 and found that only one provided verifiable documentation (such as denial letters) that the Trust Fund was the payer of last resort. Nearly all applications reviewed were for vehicles and vans, for which Commission staff stated that the Trust Fund is a payer of last resort as no other state or federal agency will pay for them.
Finally, there is no evidence that the Commission has begun to verify the authenticity of physician letters describing the applicant's injury, though Commission staff indicated an unofficial policy requires letters to be on letterhead or a prescription pad.

The Commission should require sufficient information to allow it to accurately assess an applicant's need for services and to effectively prioritize awards. The Commission does not require an updated assessment on the severity of applicants' injuries, and it does not require applicants to submit a verifiable statement of income. Additionally, the Commission does not consistently require proof that the item requested is related to the injury sustained.

Partially Implemented - Applicants must now complete a statement of income, which, according to the Commission's policies, is designed to prioritize applicants according to their access to insurance as well as personal financial and non-financial assets. In its current form, however, it relies solely on self-reported information and requires no verifiable documentation of income or insurance. Additionally, the Commission has not established eligibility related to income (i.e., criteria that states individuals with an income over $100,000 would be ineligible for awards).
The Commission has also created an Outcome Measurement Tool (OMT) to be approved and included in the application in 2010. The OMT relies on self-reported information related to areas such as involvement in the community, access to transportation, and applicant health. Preliminary validation studies conducted by a statistician at the Shepherd Center indicate the OMT could be useful in differentiating applicant need; however, the Commission has not determined a scale of OMT scores that would prioritize applicants. Once implemented, the Commission should assess the effectiveness of the tool in differentiating applicants' need and make improvements to the tool as necessary.
Finally, as noted in the original audit, while the Commission continues to require a physician's recommendation for certain types of requests (such as durable medical equipment, wheelchairs, and assistive technology), applicants do not have to document how their injury creates a need for other goods such as personal electronics or home modifications. The Commission's broad criteria for accepting awards (inclusion in the community, independence, and a positive outcome) continue to allow for the purchase of any type of item, regardless of whether the need for the item is related to the applicant's injury. Items approved since the original audit include computers and printers, a camcorder, mortgage assistance, and a GPS navigation system. The Commission should consistently require sufficient information relating any applicant request to his/her injury to further verify the applicant's need for that good or service and prioritize accordingly.
In its response to the follow-up review, it was noted that internal checks are in place since distribution committee members have experience in determining applicants' need based on injury and physical limitations.

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Brain and Spinal Injury Trust Fund Commission Follow-Up Review, February 2010

Original Findings/ Recommendations

Current Status

Partially Implemented - Applicants are required to submit at least one price quote for the item requested. However, because of its "consumer choice" policy, the Commission does not regularly conduct assessments to determine if the selected vendor offers the item for the best possible price. The Commission intervenes only when, during the approval process, the price is deemed to be excessive based on staff and Commission members' own knowledge, internet research, or the pricing standards of other programs such as Medicaid.

The Commission should take steps to ensure that the goods and services that it purchases are obtained at the best possible price.

It should be noted that in fiscal year 2010, the Commission entered into a contract with the Department of Community Affairs (DCA) to arrange for contractors to carry out the home modification awards. The Commission pays DCA an annual fee to ensure that the contractors have the necessary expertise, that costs are covered according to the Commission's approval, and that all completed projects are up to code. When selecting contractors for the Trust Fund's awardees, DCA implements the same standards as its own home modification grant program.

In response to the follow-up review, the staff noted that "Vendor pricing fluctuates day to day and hour to hour in an open marketplace, especially so on the internet. Conducting a best possible price assessment would be problematic and entail additional staffing hours to perform an assessment of doubtful validity in the short or long-term time horizon."

The Commission needs to establish better internal controls over its purchasing procedures.

Fully Implemented - The Commission now has a process for tracking and approving purchases made through the state's purchasing card. All expenditures must be matched with the Trust Fund's activity log and receipts. Only one Commission staff member (the Director of Finance and Operations) uses the purchasing card.

Action should be taken to identify unclaimed awards so that any unused funds are returned to the Trust Fund and made available to other applicants.

Fully Implemented - The Commission adopted a policy in 2007 to limit a grant to one year after the Governor's approval. After that, the Commission sends the awardee a notification letter before the outstanding grant is withdrawn. Since the original audit, the amount of funds left unclaimed for more than a year has decreased by 94% from $605,000 to $36,500 (as of 11/30/09).
Some applicants who have not accessed their award in a year may be given extensions based on "hardship;" however, this is determined on a case-by-case basis. The Commission should create official procedures for rescinding awards and standards for what constitutes hardship.

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Brain and Spinal Injury Trust Fund Commission Follow-Up Review, February 2010

Original Findings/ Recommendations

Current Status

The Commission should ensure that its new database contains sufficient controls to provide reliable management information.

Partially Implemented The Commission's new database, implemented in fiscal year 2009, provides some added security controls. For instance, each staff member is given a designated level of access; however, even the most restrictive levels allow users to alter award amounts. The Commission should reevaluate the level of access allowed to staff to protect against potential errors.
The new database also does not contain built-in controls that would restrict users from changing information after the award has been approved or prevent changing the amount of an award. Commission staff indicated that such errors would likely be caught during the application process.

9 Recommendations

4 Fully Implemented 5 Partially Implemented 0 Not Implemented

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For additional information or for copies of this report call 404-657-5220 or see our website: http://www.audits.state.ga.us/internet/pao/rpt_main.html