Office of the Inspector General’s Audit of District-Owned Nursing Homes
Councilmember Muriel Bowser, Chair of the Committee on Government Operations; Councilmember David Catania, Chair of the Committee on Health; and Councilmember Marion Barry, Chair of the Committee on Aging and Community Affairs announce a joint public oversight roundtable to review the findings of the Office of the Inspector General’s (OIG) Audit of District-Owned Nursing Homes, the Washington Center for Aging Services (WCAS) and the J.B. Johnson Nursing Center (JBJ). The joint public oversight roundtable will be held on Thursday, June 21, 2012 at 10:00 A.M., in Room 412, of the John A. Wilson Building, 1350 Pennsylvania Avenue, NW.
On September 23, 2011, the OIG issued a final report summarizing the results of its audit of the two District-owned Nursing Homes (OIG No. 10-1-02BY/HT), WCAS and JBJ. This audit was included in the OIG’s annual audit plan and is part of its continuous review of the District Medicaid program. The audit was initiated because each home had been operated by Vital Management Team Long Term Care Management, Inc (VMT) via long-term contracts to WCAS for over 20 years and JBJ for 15 years. The lack of rebidding raised the question of whether the District was paying the best possible price for management services.
During the course of the audit, it was found that VMT used approximately $2 million of District funds without authorization and violated performance conditions of its WCAS contract valued at approximately $750,000. These events occurred because the DC Office of Aging (DCOA) lacked internal controls to provide adequate contract oversight. In addition, VMT used its experience and assertive management style to execute questionable hiring practices and exercise improper account management. Without proper contract oversight, significant contract violations went unresolved or undetected for several years. As a result of the audit, OIG identified $2.7 million in contract costs that the District could have avoided.
Also, the OIG directed five recommendations to the Executive Director of the DCOA, four recommendations to the Chief Procurement Officer, Office of Contracting and Procurement, and one recommendation to the Chief Financial Officer, Office of the Chief Financial Officer necessary to correct the deficiencies noted in the audit report.
The recommendations, in part, focus on:
- Implementing steps to recover $1.8 million of District funds VMT used to settle a Department of Labor fine, without District approval;
- Implementing steps to recover $195,489 VMT used to pay for its corporate legal fees, without District approval;
- Implementing steps to recover $400,000 from VMT for violating conditions of the WCAS contract by not submitting claims for Medicare reimbursement;
- Implementing steps to recover $357,839 from VMT for violating conditions of the WCAS contract, which prohibits subcontracting for services without proper approval;
- Developing procedures to expand COTR Training;
- Implementing periodic COTR meetings to share best practices;
- Developing procedures to outsource COTR services when specialized expertise is required; and
- Implementing policies that maintain relevant work experience for COTR personnel to ensure proper contract monitoring.
The Joint Public Oversight Roundtable is intended to provide an opportunity to review the audit results in detail, provide a forum to hear from VMT management and employees, and examine agency efforts to implement the recommendations of the OIG.
Individuals and representatives of organizations who wish to testify at the joint public oversight roundtable are asked to telephone Jim Slattery, Legislative Analyst to the Committee on Government Operations, at (202) 727-8272, or via e-mail at email@example.com and furnish their names, addresses, telephone numbers, and organizational affiliation, if any, by the close of business Tuesday, June 19, 2012. Persons presenting testimony may be limited to 3 minutes in order to permit each witness an opportunity to be heard.
If you are unable to testify at the hearing, written statements are encouraged and will be made a part of the official record. Copies of written statements should be submitted to the Committee on Government Operations, Council of the District of Columbia, Suite 113 of the John A. Wilson Building, 1350 Pennsylvania Avenue, N.W., Washington, D.C. 20004.