Allocation of Title IV-E Training Costs - Illinois Department of Children and Family Services

EXECUTIVE SUMMARY:

This report provides the results of our review of the allocation of training costs claimed by the Illinois Department of Children and Family Services (State agency) under the Title IV-E Foster Care and Adoption Assistance programs. The audit objective was to determine whether the State agency properly allocated joint training costs between Title IV-E and other benefiting programs.

The State agency provides or contracts for various types of training for its employees, foster and adoptive parents, and other providers of foster care. Although this training also benefitted other State programs, the State agency charged the costs entirely to Title IV-E. As a result, the Department of Health and Human Services (HHS), Division of Cost Allocation (DCA), disapproved the State agency's cost allocation plan.

When we commenced our audit of Title IV-E training costs, the allocation of these costs was the subject of an appeal to the HHS Departmental Appeals Board (DAB) . Because of the appeal, we excluded the allocation issue from our prior report on Title IV-E training costs (CIN: A-05-95-00022, dated February 29, 1996) which covered the other areas of our review. In its decision on the appeal issue, the DAB concluded that the joint training costs should be allocated to all benefiting programs. Based on the DAB's decision, we computed the overcharges to Title IV-E and are summarizing the results of our review in this separate report.

The State agency had not allocated joint training costs to all of the benefiting programs. We re-allocated these costs to all benefiting programs and determined that $8,283,904 (Federal share - $5,812,360) was improperly claimed during the period January 1, 1992 through December 31, 1994.

We are recommending that the State agency:

• make a financial adjustment of $8,283,904 (Federal share $5,812,360) to the Title IV-E program, and
  
• develop and implement a cost allocation plan for distributing training costs to all benefiting programs.
  

In its written response to our draft report, the State agency concurred that an allocation factor, based on Title IV-E eligibility ratios, should be applied to joint training costs. However, it did not agree that the computed adjustment should be retroactive to January 1, 1992. The effective date that the costs were required to be allocated to all benefiting programs is the subject of an appeal between the State and the Administration for Children and Families (ACF). The State agency is working with DCA to obtain an approved cost allocation plan for distributing future training costs to all benefiting programs.