Summary

As summarized below, our audit of the Department of Juvenile Justice (Department) for the period July 2005 through February 2007, and selected Department actions taken through August 31, 2007, focused on detention care cost sharing and cost-of-care fees.  The audit also included a follow‑up on the Department’s actions to correct deficiencies related to cost-of-care fees disclosed in our prior audit (report No. 2006-030, dated September 2005).  We found that some processes and controls established by Department management for these activities were in need of improvement to minimize the associated risks.

Detention Care Cost Sharing

Finding No. 1:      The Department did not retain documentation to support the July 2005 initial shared detention care cost calculation estimates utilized for billing the counties for the first five months of the 2005-06 fiscal year (the first fiscal year cost sharing was enacted).  Absent documentation, the Department could not demonstrate that the amounts initially assessed the counties were determined in accordance with established methodology in Department rule. 

Finding No. 2:      The Department did not maintain a dispute log to track the receipt, action taken, and final resolution of each disputed county charge.  Furthermore, the Department had not established benchmarks that addressed time frames for Department response to disputes.  As a result, Department decisions relative to disputes were not timely.  Also, Department correspondence did not provide detailed responses for each disputed case and identified some disputed issues that had not been resolved at the time of the Department’s year‑end reconciliation.  The accuracy of the year‑end reconciliation of differences between estimated costs and actual detention care costs is dependent on the Department’s timely response to, and resolution of, county dispute issues and affects the Department’s final county invoices for detention usage.

Finding No. 3:      Actual detention care costs used in the Department’s 2005-06 fiscal year-end reconciliation did not agree (unexplained difference of $132,273) with the expenditures for detention care shown by the Florida Accounting Information Resource Subsystem (FLAIR).  In addition, the Department failed to timely reconcile differences between estimated and actual detention costs, contrary to Section 985.686(5), Florida Statutes, and, consequently, the counties were not timely invoiced or credited for detention usage.  The untimely reconciliation also precluded the Department’s timely adjustment of the General Revenue Fund special category established for fiscally constrained counties.  Further, the Department did not ensure that financial records at June 30, 2006, accurately reported Shared County/State Juvenile Detention Trust Fund operations.  Specifically, accounts payable totaling $5,968,303, accounts receivable totaling $3,678,313, and advances received totaling $3,879,079 were not recorded.  An estimated $11 million deficit fund balance existed as of the end of the 2005-06 fiscal year for the Shared County/State Juvenile Detention Trust Fund.

Finding No. 4:      The Legislature should amend Section 985.686(6), Florida Statutes, to reference the Shared County/State Juvenile Detention Trust Fund instead of the Juvenile Justice Grants and Donations Trust Fund.

Cost-of-Care Fees

Finding No. 5:      The Department failed to record $7,541,281 in accounts receivable in FLAIR for cost-of-care fees at June 30, 2006.  Additionally, the Department did not retain Accounts Receivable Management System (ARMS) data to support the reported accounts receivable fiscal year-end balance.

Finding No. 6:      Deficiencies in Department records and actions relating to cost-of-care accounts continue to exist and impact the billing, collecting, and reporting of cost-of-care fees.

Finding No. 7:      The Department failed to timely submit cost-of-care delinquent accounts to the State collection agent and failed to submit uncollectible cost-of-care accounts to the Department of Financial Services for write-off approval.

The Secretary's response is included at the end of this report as APPENDIX C.