SALT LAKE CITY -- An audit of the state's Division of Rehabilitation Services said the state could potentially save as much as $612,000 a year, if the agency used the Medicaid rate of payment for services, instead of their own rate structure.
The audit, released Thursday morning during a meeting of the social services appropriations committee at Edison Elementary School, identifies four deficiencies.
Along with finding the department could reduce costs and improve controls by contracting medical functions, the deficiencies identified include:
* Compliance problems with what were termed "questionable vehicle" modifications with 15 non-farm vehicle modifications authorized during a two-year period. The audit said DRS counselors authorized an average of $172,000 a year in vehicle modifications. It also said the DRS does not reclaim assets when a client changes his or her employment objective.
* Potential problems with direct authorization policy expenditures. The finding questions almost $350,000 of expenditures during a three-year period, saying there was no documentation for the expenses. It said better oversight and controls could reduce the risk of misuse of funds.
* The potential for fraud in identification. The audit recommended the division require identification documents, including the ability to work in the U.S., as part of its oversight.
The audit included a review of authorizations during the 2010, 2011 and 2012 calendar years, according to David Pulsipher, performance audit director. It included a review of client case files, a comparison of policies for the department with six surrounding states and discussions with division staff.
Pulsipher is recommending the Legislature evaluate the current organizational alignment and reporting structure due to the significance of the concerns in the four findings, combined with the differing roles between the vocational rehabilitation and the State Office of Education.
The timing of the audit put DRS acting director Russell Thelin in a unique position, since he won't formally assume oversight of the department until Monday, due to the retirement of Don Uchida. The timing didn't appear to put him on the defensive.
Thelin said one of the reasons the state uses its own base rate for paying medical costs for its clients, is because many physicians and specialties will not accept patients they can only bill at the Medicaid rate. He described the state's rate of payment as middle of the road.
"We're paying a rate that allows for us to receive those services," Thelin said.
Addressing the audit overall, Thelin said his agency generally supported the recommendations. He described the program in Utah as ranking in the top 10 percent of agencies for efficiency in the U.S. and among the top 10 in the lowest cost for successful closure of clients in the country. He said a recent study shows for every dollar of allocated funds, there is a return of $5.64.
"We're about continuous improvement," Thelin said.
He said he thinks the agency is well situated as far as oversight, but said he is open to any changes the Legislature may require.
Sen. Allen Christensen, R-North Ogden, who chairs the committee, gave the soon-to-be director some encouragement.
"Welcome to the position, welcome to the hot seat," Christensen said.
The Division of Rehabilitation Services facilitates vocational rehabilitation services to clients whose disabilities prevent them from gaining or retaining meaningful employment. Much of the funding for the program comes from federal dollars.