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ANTHONY S. COOPER DISTRICT OF COLUMBIA AUDITOR 016:97:DI:DN:kl OFFICE OF THE DISTRICT OF COLUMBIA AUDITOR September 30, 1997
PURPOSE Pursuant to D.C. Act 11 -447, the "Victims of Violent Crime Compensation Act of 1996," the District of Columbia Auditor conducted an audit of the Crime Victims Compensation Program for fiscal years 1994 through 1997, as of February 28, 1997. The Crime Victims Compensation Program (CVCP) was established to compensate eligible victims of violent crimes that occurred in the District of Columbia CONCLUSION As of February 28, 1997, there were 380 pending CVCP claims with an estimated potential liability of $2,506,020.20. There were an additional 15 pending CVCP claims that were classified as protracted with an estimated potential liability of $232,337.75. Also, there were 20 additional CVCP claims in various stages of approval for which no payments had been made by the program. The estimated potential liability for these claims was $ 129,963.41. The total potential liability for outstanding CVCP claims in all categories, as of February 28, 1997, was $2,868,321.36. Expenditures for crime victims' compensation claims for the period October 1, 1996 through February 28, 1996 totaled $281,366.87. As a result of the Auditor's analysis, $228,116.48 is available for the transfer from the Department of Human Services budget to the Superior Court to carry out the mission of the CVCP. The $228,116.48 should be transferred to the Superior Court to continue the administration of the CVCP through fiscal year 1997. The $228,116.48 does not include any federal grant funds that DHS may be entitled to draw down from the federal crime victims compensation grant to reimburse it for crime victims' claims paid during fiscal year 1996. The past four years of the CVCP have been characterized by sporadic funding, inadequate staffing, a backlog of at least 380 cases, and a lack of consistency in budgetary and accounting procedures. These deficiencies were major impediments to the effectiveness of the Crime Victims Compensation Program's performance. FINDINGS
RECOMMENDATIONS
Pursuant to D.C. Act 11-447, the "Victims of Violent Crime Compensation Act of 1996," the District of Columbia Auditor conducted an audit of the Crime Victims Compensation Program for fiscal years 1994 through 1997 as of February 28, 1997. The Crime Victims Compensation Program (CVCP) was established to compensate eligible victims of violent crimes that occurred in the District of Columbia OBJECTIVES. SCOPE. AND METHODOLOGY The objectives of the audit were to:
In conducting this audit, we reviewed applications filed by crime victims, claims paid, and the active caseload of the Crime Victims Compensation Program during fiscal years 1994 through 1997, as of February 28, 1997. During the audited period, we reviewed program funding from all sources and supporting documentation for all claim payments. Appendices containing the names of crime victims or claimants were included in the draft report. However, to protect the privacy of crime victims who have filed claims and received benefits, the appendices were not included in the final report. We interviewed representatives from: the controller's offices in the Department of Employment Services (DOES) and the Department of Human Services (DHS); the Family Services Administration of DHS; the Crime Victims Compensation Program within DHS; and the budget office of the Department of Employment Services. We also discussed the District's Crime Victims Compensation Program federal grant award and draw down activity with the Office of Justice Programs, Office of the Comptroller, U.S. Department of Justice. The audit was conducted in accordance with generally accepted government auditing standards and included such test of the records and other auditing procedures deemed necessary under the circumstances. Difficulties In Conducting The Audit The timeliness in conducting the audit of the Crime Victims Compensation Program was hampered by faulty and inadequate information pertaining to the disposition of claims filed during fiscal years 1994 through 1997 and pending claims filed prior to fiscal year 1994. Missing, inadequate, and faulty data pertaining to claim payments further contributed to delays in completing the audit. Specifically, the Production Control Manager in the Office of Financial Management, Office of Financial Information Services purged payment data from the Financial Management System (FMS) relative to the Department of Employment Services (DOES) CVCP claim payments made during fiscal years 1994 and 1995. Also, DOES had archived all CVCP vouchers and supporting documentation pertaining to its CVCP payments. DOES retrieved the financial and supporting documentation from storage for our review, and we obtained additional payment information from the District's Office of Financial Information Services to assist in reconstructing the CVCP's claims payment history. Also, payment information provided by DHS for this audit contained 38 duplicate claims payment entries totaling $144,008.80. We determined through our research that all of the double entries, except for one (1) duplicate payment and one (1) overpayment totaling $878.88, were data input errors rather than actual double payments made to or on behalf of claimants. The Department of Human Services did not establish a discernible payment tracking or management information system that would, at minimum, have provided a monthly status of CVCP claim payments and the processing status of all claims. The DOES did maintain a separate responsibility center and revenue source to account for all CVCP activities apart from other programs. However, neither the Department of Employment Services nor the Department of Human Services ever established a Crime Victims Compensation Fund to account for CVCP financial activity as mandated by the Crime Victims Law. The DHS accounting office failed to establish any systems to account for and support all CVCP payments. For example, some CVCP payments were improperly processed through the District's FMS by using Revenue Refund Vouchers which are used to make refunds of overpaid fines, fees, and tax payments. Funds disbursed using Revenue Refund Vouchers are not recorded in FMS as an expenditure. Instead, revenue refund disbursements are recorded as reimbursements of revenue and do not appear in the District's FMS expenditure information. Some CVCP payments were processed by DHS through FMS using a special vendor identification number which was established by DOES specifically for CVCP payments. However, DHS processed other CVCP payments through FMS using a vendor's identification number which lacked any attributes that would link the payment to the CVCP. There were instances in which the DHS accounting office filed hard copy CVCP payment documentation, such as vouchers and supporting documentation, in vendor files. DHS also created separate files specifically for payments to CVCP claimants. However, most of the DHS hard copy CVCP payment documentation necessary for our audit could not be produced by the DHS' accounting office because of filing errors or misplacement of the documentation. Therefore, the Auditor had to rely on other sources of information to confirm CVCP payments. Despite our difficulties, we were able to obtain adequate and reasonably reliable information, in most cases, to support CVCP payments and to reach credible conclusions regarding the status of all outstanding CVCP claims and payments made as of February 28, 1997. Public Law 98-473, "the Victims of Crime Act" (VOCA), authorized the creation of crime victim compensation programs at the state and local levels. The VOCA established eligibility criteria for crime victim compensation and crime victim assistance grants, and allowed state and local governments broad discretion in setting priorities and establishing appropriate guidelines and operating procedures for these programs. D.C. Law 4-100, "Victims of Violent Crime Compensation Act of 1981," established the District's Victims of Violent Crime Compensation Program and authorized the promulgation of regulations and guidelines for administration of the program. D.C. Code, Section 3-413 established a fund to be known as the Crime Victims Compensation Fund (hereafter referred to as "Fund"). The Fund was to be used to account for the financial activity of the Crime Victims Compensation Program. The Auditor's review revealed that the Fund was never established by the Mayor. Administration of the Crime Victims Compensation Program was delegated by the Mayor to the Director of the Department of Employment Services (DOES). The program was administered by DOES during fiscal years 1983 through 1995 (October 1, 1982 through September 30, 1995). During this period, DOES was accountable for the administration and financial management of the CVCP. In the Fiscal Year 1995 Supplemental Budget Act, which was approved by the Council of the District of Columbia and became effective May 2, 1995, all appropriated funding, positions, and responsibility for the administration and financial management of the CVCP were transferred from DOES to the Department of Human Services. In fiscal year 1996, the CVCP was actually transferred to the Department of Human Services and theoretically combined with the Crime Victims Assistance Program which was also administered by the Department of Human Services (DHS). The District government did not provide any appropriated funds to the CVCP for fiscal year 1996. In fiscal year 1997, the District again did not provide any appropriated funds to the CVCP, however, $500,000 was allocated to the CVCP by the Department of Human Services from the budget of the DHS Commission on Social Services. Also during fiscal year 1997, on November 12, 1996, the "Victims of Violent Crime Compensation Emergency Act of 1996" was enacted by the Council of the District of Columbia and became effective December 6, 1996. This legislation redirected management, administrative, and fiscal responsibility for the CVCP from DHS to the Superior Court of the District of Columbia. This law also required DHS to transfer unexpired Crime Victims Compensation funds to the Superior Court. Summary of Funding and Expenditure Activity for the CVCP: Fiscal Year 1994 Through Fiscal Year 1997. As of February 28. 1997 Fiscal Year 1994 In fiscal year 1994, the Department of Employment Services was responsible for the administration and financial management of the Crime Victims Compensation Program. Total funding for the CVCP during fiscal year 1994 was $913,400 which consisted of: $688,000 in appropriated funds from the District and 6 full-time equivalent positions; $149,000 in federal crime victims program grant funds; and $76,400 in fines collected by the Superior Court of the District of Columbia from persons found guilty or pleading guilty to felony crime charges. Expenditures by the Crime Victims Compensation Program during fiscal year 1994 totaled $744,925.38. These expenditures consisted of: $134,178 in personal services, $36,785 in nonpersonal services, and $573,962.38 in crime victims' claim payments. The Department of Employment Services underspent available Crime Victim Compensation Program funding by $168,474.62. The unspent appropriated funds expired at the end of fiscal year 1994 and reverted to the District's General Fund. Fiscal Year 1995 In fiscal year 1995, the CVCP's total budget was $676,135 which consisted of: $490,000 in District appropriated funds and 6 full-time equivalent positions; $129,000 in federal grant funds; and $57,135 in fees collected by the Superior Court. In fiscal year 1995, expenditures totaled $612,989 which consisted of: $476,085 in crime victims' claim payments; $117,106 in expenditures for personal services; and $19,798 in expenditures for nonpersonal services. D.C. Act 11-46, the "Fiscal Year 1995 Second Supplemental Budget and Rescissions of Authority Request Act of 1995," effective May 2, 1995, eliminated the $490,000 appropriation and 6 FTE's from the DOES budget and transferred the funding and positions to DHS. However, at that juncture of fiscal year 1995, approximately $63,146 remained in the CVCP's budget. The CVCP had expended $612,989 of the program's $676,135 funding from all sources. Part of the $476,085 in CVCP claims payments were made with funds from the $129,000 federal Crime Victims Compensation grant and $57,135 in Court collected fines. The remaining $289,950 in claims payments were made with fiscal year 1995 appropriated funds. On July 5, 1995, the Director of DOES suspended the operation of the CVCP because DOES's remaining budget authority for the program was eliminated in the fiscal year 1995 supplemental budget and the program had expended all of the federal grant and Court collected fines made available to the program. On July 7, 1995, nine months into fiscal year 1995, the City Administrator issued a memorandum which stated that it would be disruptive to transfer the CVCP to DHS in the middle of fiscal year 1995, and that the transfer should take effect at the beginning of fiscal year 1996. The memorandum further stated:
After disbursements for crime victims' claims payments and expenditures for personal and non- personal services were deducted, $63,146 in fiscal year 1995 appropriated funds remained, for transfer to DHS. However, since the CVCP's transfer did not occur until fiscal year 1996, the appropriated funding that would have transferred with the program expired at the end of fiscal year 1995 and reverted to the District's General Fund. Fiscal Year 1996 At the beginning of fiscal year 1996, on October 1, 1995, the programmatic and financial responsibility for the CVCP was assumed by DHS. Two employees from DOES were detailed to DHS to administer the program. The CVCP was placed under the organizational and administrative umbrella of the Family Services Administration and, theoretically, combined with the Crime Victims Assistance Program. An appropriation for the Crime Victims Compensation Program was not included in the District's fiscal year 1996 budget. Without appropriated budget authority, DHS continued the suspension of the program's operation until August 1996, when the District was awarded a $160,000 federal crime victims compensation grant, which DHS had to drawn down. Additionally, $55,818.50 in Court collected fines were made available to the CVCP. The $160,000 in federal grant authority and the $55,818 in Court collected fines provided the CVCP with total fiscal year 1996 revenue of $215,818.50. During fiscal year 1996, the DHS did not drawn down any of the $160,000 in federal crime victims compensation grant funds, instead it paid crime victims claims from the Family Services Administration's budget and from Court collected fines. Fiscal year 1996 expenditures consisted of $211,768.15 in payments on 28 crime victims' claims. DHS made $155,949.65 in Crime Victims Compensation payments from the budget of the Family Services Administration and the remaining $55,818.50 was paid with Court collected fines. DOES incurred $117,106 in expenditures in salaries and fringe benefits that were charged to its budget for the two employees detailed from DOES to DHS to administer the CVCP. The CVCP ended fiscal year 1996 with a surplus of $4,050.35 in federal grant authority which carried over into fiscal year 1997. Fiscal Year 1997 In fiscal year 1997, $500,000 was allocated to the CVCP by DHS. In addition to the $500,000 allocation, $4,050.35 in federal grant authority was carried over into fiscal year 1997. The Court System transferred $5,433 in Court collected fines to the DHS administered CVCP during the first quarter of fiscal year 1997. Total funding available to the DHS administered CVCP in fiscal year 1997 was $509,483.35. Expenditures consisted of $281,366.87 in payments on 35 crime victim's claims. The projected $117,106 expenditure for salaries and fringe benefits for the two employees detailed from DOES to DHS were charged to the DOES budget. Fiscal Year 1997 CVCP Funding. Expenditures, and Balance to be Transferred to the Court As noted earlier in this report, expenditures for crime victims' compensation claims, for the period October 1, 1996 through February 28, 1997, totaled $281,366.87. As a result of the Auditor's analysis, $228,116.48 is available for the transfer from the Department of Human Services' budget to the Superior Court for the purpose of carrying out the mission of the CVCP. The $228,116.48 should be transferred to the Superior Court to continue the administration of the CVCP through fiscal year 1997. The $228,116.48 does not include any federal grant funds that DHS may have been entitled to draw down in reimbursements for crime victims claims paid by the CVCP during fiscal year 1996. As of November 30, 1996, Court fines totaling $29,549 had been collected by the Court System. The Court administered CVCP had received $21,557 of that amount as of February 28, 1997 for its CVCP operations. The federal grant award of $107,000, effective February 12, 1997, was made directly to the Court. Therefore, at a minimum, a total of $356,673.48 should be available to the Court system for the remainder of fiscal year 1997 to administer the CVCP. Liability from Claims Approved But Not Paid As of February 28, 1997, there were 20 CVCP claims in various stages of approval. No payments had been made by DHS on these claims. The estimated liability for the claims was $129,963.41. The 20 claims included: eight (8) claims totaling $45,318.00 for which a preliminary decision had been made but the claimant had not been notified; three (3) claims, with a potential liability of $37,748.25, for which a preliminary decision had been made but the final decision was still pending; and nine (9) claims, with a potential liability of $46,897.16, on which a final determination had been made but a request for payment had not been prepared and submitted for processing.
Propriety of All Expenditures and Certification of Payments Made to CVCP Claimants in Fiscal Years 1996 and 1997 Based upon the Auditor's review of available payment data maintained by DHS and the District's Office of Financial Information Services, and supporting documentation in CVCP's claim files, payments made during fiscal years 1996 and 1997 on behalf of CVCP claimants appeared to be substantially consistent with the CVCP law and program guidelines. During fiscal year 1997, the CVCP made payments totaling $281,366.87 on 35 claims. In fiscal year 1996, the CVCP made payments totaling $211,768. l 5 on 28 claims. We did note what appeared to be a $500 payment to claimant "Joseph Walran" in June or July 1996 that was not supported by documentation in the program's file for claimant Joseph Walraven (CVC 196-93). As a result of the chaotic manner in which financial records for the CVCP were maintained by the DHS controller's office, we were unable to conclusively determine whether the $500 was actually disbursed to the payee. We also identified $451.75 in duplicate payments made during fiscal year 1997, and an overpayment of $427.13 made during fiscal year 1994. Together, the questionable payments for the period reviewed totaled $1,378.88. Potential Liability From Pending Claims As of February 28, 1997, there were 380 pending CVCP claims with an estimated potential liability of $2,506,020.20. The 380 pending claims included current and backlogged claims from fiscal year 1997 and prior years. In order to determine the estimated potential liability posed by the 380 pending claims, the Auditor determined the total number (234) and amount ($1,543,182.29) of claims paid during fiscal years 1994 through 1997, as of February 28, 1997, and determined the average payment ($6,594.79) made on those claims. The Auditor then multiplied the average claim payment by the total number of claims pending at DHS as of February 28, 1997 to determine the estimated potential liability. Final payments on pending claims may range from $0 to $25,000 (not including attorney fees). The past and current funding levels for the CVCP have been entirely inadequate to finance the whole, or a significant part, of the estimated potential liability posed by pending crime victims compensation claims should these claims be decided in favor of the claimants in a single fiscal year. Funding for the District's CVCP has not been sufficient over the past three fiscal years to pay claims received and approved within that fiscal year or to pay the program's administrative expenses. This funding inadequacy has contributed to the development of a backlog of pending CVCP claims. The CVCP made payments on a total of 234 claims between fiscal years 1994 and 1997, as of February 28, 1997. Table 1 presents payment ranges and the number of claims paid within each range during the noted period. The majority of these claims were paid in fiscal years after the claims were filed with the CVCP. TABLE 1
Table 2 presents the total amount of Crime Victims Compensation Program payments made and the number of claims paid during each of these fiscal years. TABLE 2
The Auditor believes that a reduction in the maximum $25,000 level that may be paid on a single crime victim's claim will provide adequate assistance to eligible crime victims while benefiting more claimants. Potential Liability From Protracted Claims As of February 28, 1997, there were 15 on-going CVCP claims that were classified as protracted. The estimated potential liability from protracted claims was $232,337.75. The 15 cases dated back to fiscal year 1988 with the most recent case having been filed in fiscal year 1995. In order to determine the potential liability from these claims, the Auditor multiplied the number of claims (15) by the $25,000 maximum amount payable on protracted claims under the CVCP Law and subtracted any payments made against the $25,000 maximum as of February 28, 1997.2 The CVCP rules required quarterly submissions by the claimant to determine the status of protracted claims. There was inadequate documentation in CVCP files indicating that this rule had not been regularly and consistently enforced by the program. The Auditor noted at least one case without any payment activity since 1994 that is eligible for administrative closure.
Claims Not Paid Due to CVCP's Inability to Contact Claimants During the review of CVCP claim folders, the Auditor identified claims that were approved for payment but were not paid because of the program's inability to locate the claimant. In these cases, claimants did not accept or respond to the CVCP's Notice of Preliminary Determination which was sent to each claimant by registered mail, return receipt requested. It generally took the District's Crime Victims Compensation Program more than a year after a claim was filed to render a decision. The Auditor reviewed over 100 claims dating back to fiscal year 1994 that had not been paid due to the CVCP's inability to locate the claimant. Many of these claims had been on file with the CVCP for at least two years before it rendered a decision. As a result of the CVCP's inability to contact the claimants and the claimants failure to respond to the Preliminary Notice of Determination, the CVCP denied these claims after the expiration of the 15 day period within which the claimant was required to either accept the award or file an appeal. Between the date the claim was filed and the date the CVCP rendered a decision, numerous CVCP claimants had suffered evictions, financial hardships, harassment by creditors, and negative credit ratings as a result, in part, of the inability of the CVCP to obtain necessary information to process claims in a timely, efficient and effective manner. The CVCP, which was developed to assist victims, surviving dependents, and persons responsible for the economic support of a crime victim, should have been able to obtain necessary information and render decisions on crime victims' claims in a timely manner and on an equitable basis in order to help and not add to the distress and problems of claimants.
Claims Disposition: Fiscal Years 1994 Through 1997. as of February 28, 1997 Based on data provided by the CVCP, the Crime Victims Compensation Program started fiscal year 1994 with a backlog of 494 claims. During fiscal year 1994, the program received 331 new claims. Inadequate documentation was available to the Auditor to determine how all of the purported 494 backlogged claims prior to fiscal year 1994 were resolved. However, the Auditor identified 140 claims from prior years that were paid in fiscal years 1994, 1995, 1996 and 1997. We noted an additional 14 claims from years prior to fiscal year 1994 that were pending as of February 28, 1997 Between October 1, 1993 (fiscal year 1994) and February 28, 1997 (fiscal year 1997), the Crime Victims Compensation Program received a total of 684 claims. Of these claims, 132 were denied, 92 were approved for payment, the Auditor could not locate a claim file for 26 cases, 17 awards were pending, 50 cases were closed, and 366 claims were pending as of February 28, 1997. The 366 pending claims did not include the 14 claims pending from fiscal years prior to 1994. Between fiscal years 1994 and 1997, a total of $ 1,543,182 in claim payments was disbursed by the Crime Victims Compensation Program. The Crime Victims Compensation Program developed an extensive backlog of over 366 claims between fiscal years 1994 and 1997. A review of the CVCP claims indicated that claimants were adversely impacted by the relatively complex application process and inadequate resources dedicated to application processing, review, and decision making. The Auditor's review indicated that approximately 110, or 33 percent, of the claims filed in fiscal year 1994 were denied for: failure to timely provide information to complete the application process; failure of the claimant to respond to the CVCP's notice of preliminary decision within the allotted 15 days; or withdrawal of the claim by the claimant three to six months into the claims process. An additional 21, or 6 percent, of the fiscal year 1994 claim files contained incomplete applications. Application activity on some of these files had not occurred as far back as April 1994. For most of the claims, the last recorded activity occurred during calendar years 1995 and early 1996.
Consolidation of the Crime Victims Compensation Program with Crime Victims Assistance Program Under the Department of Human Services Was A Failure The Auditor's review of the DHS administered Crime Victims Compensation Program revealed inadequate preparation and planning by DHS to administer a viable Crime Victims Compensation Program. This lack of preparation and planning was evidenced by the inadequacy and insufficiency of personnel and other resources made available to the program by DHS. Correspondence and other data reviewed by the Auditor indicated that the executive management of DHS was more optimistic about DHS's ability to effectively administer the CVCP than could be executed by those DHS employees responsible for the day-to-day management and administration of the program. For example, in an April 30, 1996 letter to the U.S. Department of Justice's Office for Victims of Crime, the DHS Director stated:
During our field work, we did not observe an effective administrative or financial record keeping or management information system in place for the CVCP or a plan of action to improve the program's responsiveness and effectiveness. We did observe a program that was plagued by inadequacies. The Department of Human Services failed to dedicate any significant amount of its staff end other resources to the operation of the CVCP. The employees who administered the day to day duties and responsibilities of the program were detailed from and paid for by the Department of Employment Services. The budget and accounting responsibilities for the CVCP were haphazardly carried out by the Department of Human Services' budget and accounting staff. As noted earlier in this report, DHS failed to establish an adequate system of accountability specifically for CVCP payments that would also provide accountability and an audit trail to support all CVCP payments. CVCP program staff submitted payment authorizations and supporting documentation to DHS's accounting department for payment and the accounting department repeatedly returned the authorizations because of budget and account coding deficiencies. The Auditor's review indicated that a hearing process for CVCP claims was never established by DHS. Further, DHS did not dedicate any of its staff on a full time basis to administer the CVCP. We did not observe any expenditures for furniture, telecommunications equipment, or computer equipment. All furniture and equipment made available to the CVCP staff appeared to have been used or surplus government furniture and equipment. Only one outmoded telephone and one telephone line was made available for the CVCP's use and when that telephone was in use by one person no other calls could be received or made by CVCP staff. The lack of adequate resources affected the CVCP in the following ways:
The overall impact was that fewer victims of violent crime were served due to the insufficient allocation of financial and human resources to the CVCP. Federal Grants for the CVCP tied to the District's Financial Commitment According to Public Law 98-473, federal grant funds made available to the District's Crime Victims Compensation Program may only be used to pay the claims of victims of violent crime. The District of Columbia Government is responsible for paying the administrative expenses for its CVCP from District appropriated revenue. Federal crime victim compensation grants are made at the rate of 40% of District appropriated funds used to pay crime victims' compensation claims two years prior to the federal grant award. For example, the fiscal year 1997 federal Crime Victims Compensation grant award to the District should be based on 40% of District appropriated funds paid on Crime Victims Compensation claims during fiscal year 1995. Federal grant funds may not be used to pay the administrative expenses of the program. Over the four fiscal years examined by the Auditor, the District received federal crime victims compensation grants totaling $438,000. Over the same four year period, the District spent $542,079 in appropriated funds for administration of the program and $ 1,105,182 in appropriated funds on victims' compensation claims. The federal crime victims compensation grant funds accounted for only 28% of funds spent by the District on CVCP administration and claims payments. The District has not made a significant financial commitment to its CVCP and, as a result, the effectiveness of the program has been minimal. The lack of a definite and adequate funding source for the CVCP in fiscal years 1995 and 1996 contributed to the low level of federal grant assistance.
As of February 28, 1997, there were 380 pending CVCP claims with an estimated potential liability of $2,506,020.20. There were an additional 15 pending CVCP claims that were classified as protracted with an estimated potential liability of $232,337.75. Also, there were 20 additional CVCP claims in various stages of approval for which no payments had been made by the program. The estimated potential liability for these claims was $129,963.41. The total potential liability for outstanding CVCP claims in all categories, as of February 28, 1997, was $2,868,321.36. Expenditures for crime victims' compensation claims for the period October 1, 1996 through February 28, 1996 totaled $281,366.87. As a result of the Auditor's analysis, $228,116.48 is available for the transfer from the Department of Human Services budget to the Superior Court to carry out the mission of the CVCP. The $228,116.48 should be transferred to the Superior Court to continue the administration of the CVCP through fiscal year 1997. The $228,116.48 does not include any federal grant funds that DHS may be entitled to draw down from the federal crime victims compensation grant to reimburse it for crime victims' claims paid during fiscal year 1996. The past four years of the CVCP have been characterized by sporadic funding, inadequate staffing, a backlog of at least 380 cases, and a lack of consistency in budgetary and accounting procedures. These deficiencies were major impediments to the effectiveness of the Crime Victims Compensation Program's performance. Respectfully submitted, AGENCY COMMENTSOn August 19, 1997 the Office of the District of Columbia Auditor transmitted this report, in draft, to the Acting Director of the Department of Employment Services, the Director of the Department of Human Services, and the Director of the Crime Victims Compensation Program in the Superior Court of the District of Columbia for review and comment. The comment period expired on September 10, 1997. Comments on our draft report were received from the Executive Officer of the District of Columbia Courts on September 9, 1997. We also received comments from the Department of Employment Services on September 17, 1997, and the Department of Human Services on September 18, 1997. Where appropriate, changes to the final report were made to reflect the comments. The comments in their entirety are included with this report. An exit conference was held on September 18, 1997 and was attended by representatives from the Department of Human Services, the District of Columbia Superior Court's Crime Victims Compensation Program, and the Office of the District of Columbia Auditor. At this meeting, the Department of Human Services agreed to transfer the balance of $75,625.48 to the D.C. Superior Court Crime Victims Compensation Fund before September 30, 1997. The Director of the Superior Court's Crime Victims Compensation Program sent a letter, dated September 22, 1997, to the Director of the Family Services Administration in DHS which restated the agreement to transfer the balance of $75,625.48 that was reached at this meeting. This letter is also included with the agency comments. District of Columbia Courts September 3,1997 Anthony S. Cooper Dear Mr. Cooper: After a careful review of the information contained in the draft report entitled "Audit of the District of Columbia's Crime Victims Compensation Program For the Period October 1,1993 through February 28, 1997," several issues requiring resolution are raised First, the analysis by the Auditor indicates that $228,116.48 is available for transfer from the Department of Human Services budget to Superior Court to continue the administration of the CVCP through fiscal year 1997. Based upon information contained in your letter dated April 18, 1997 to Chief Judge Hamilton, which contained preliminary audit results, the Court requested the transfer of available funding from the D.C. Department of Human Services. After a conference call with interested parties in both agencies, the Court was advised that only $152,491.00 was available for transfer from the D.C. Department of Human Services. We received the transfer of funding from the D.C. Department of Human Services and accepted physical custody of approximately 388 backlogged cases. The entire $152,491 has been expended on the payment of victims' claims. The balance of the funding is needed to continue to pay victims' claims. Second, what evidence supports your statement of the reversion to the District's General Fund of unspent Program funding in fiscal years 1994 and 1995? The amount of unspent reverted funds was $168,474.62 in fiscal year 1994 and $63,146 in fiscal year 1995. This raises concerns because in each of these fiscal years the entire amount of the federal grant is characterized as being used for the payment of victims' claims. The federal grant must be spent within the year awarded, plus one year. In other words, it could have been carried over into the next fiscal year. Why were appropriated funds not deemed to have been used first in your analysis, so that there would be no reversion to the Districts General Fund? Is the reversion documented? Is there evidence which shows the actual source of funding for payment of claims? Third, the "undetermined source" of funding that was combined with Court
fines to pay claims in fiscal year 1996 is vague and non-specific. The Court received 20
pending claims from the D.C. Department of Human Services in various stages of approved
awards that were not paid. Is there evidence that supports that the federal grant funding
was not meant to pay these pending claims? I hereby request that a review conference be scheduled at your earliest convenience to resolve these issues. I look forward to working toward a resolution of these matters that will provide the additional support that the Crime Victims Compensation Program requires to carry out its mission. Ulysses B. Hammond, Esq. cc: Duane B. Delaney Laura Banks Reed Deborah Nichols Department of
Employment Services Sep 15 1997 Mr. Anthony Cooper Dear Mr. Cooper: Enclosed is the Department of Employment Services (DOES) response to the draft audit entitled, "Auditor of the District of Columbia's Crime Victims Compensation Program for the period of October 1, 1993 through February 28, 1997." Please note that our responses are to add clarity to the audit versus responding to the audit issues since the responsibility for CVCP has been transferred from DOES. Please contact me on (202) 724-7712 or have a member of y our staff contact Melinda E. Jones, Chief Financial Officer, DOES, on (202) 724-7150 if you have any questions regarding our response. Sincerely, Attachment Department of Employment Services' Response Page 2, Difficulties in Conducting the Audit: Audit Comment: "Specifically, the Department of Employment Services (DOES) purged payment data from the Financial Management System (FMS) relative to CVCP claim payments made during fiscal years 1994 and 1995." Response: DOES did not purge data. In accordance with the established rules and regulations, the FMS administrator purges data for all prior years. Audit Comment: "Neither the Department of Employment Services nor the Department of Human Services established a Crime Victims Compensation Fund to account for CVCP financial activity as mandated by the Crime Victims Law." Response: However, DOES maintained a separate responsibility center and revenue source to account for all CVCP activities apart from other programs. DEPARTMENT OF HUMAN SERVICES OFFICE OF THE DIRECTOR Sep 12 1997 Mr. Anthony S. Cooper Dear Mr. Cooper: Thank you for the opportunity to review the draft report entitled, "Audit of the District of Columbia's Crime Victims Compensation Program for the period October 1, 1993 through February 28, 1997. " I am enclosing the comments of the Department of Human Services. As you are aware, the Department no longer manages the Crime Victims Compensation Program. While the Department cannot implement the report's operational recommendations, it is proposed that they be forwarded to the D.C. Superior Court for assessment and implementation, as appropriate. This Department would like to request an exit conference to review the recommendations and share our responses. Staff within the Family Services Administration and the Office of Investigations and Compliance will be available to participate in the exit conference. Should you have any questions about the comments or need additional assistance, please feel free to contact me on 279-6004. Sincerely, Jearline F. Williams Enclosure Comments of the Department of Human Services to the "Audit of the District of Columbia's Crime Victims Compensation Program for the Period October 1, 1993 through February 28, 1997" Recommendation: The Department of Human Services immediately transfer the balance of $228,116.48 in CVCP funds to the Superior Court. Response: In May 1997, the Department of Human Services transferred, through an Recommendation: The Crime Victims Compensation Program comply with CVCP rules requiring quarterly submissions to determine the status of protracted claims. Response: As the Auditor's report noted, the Crime Victims Compensation Program within the Department of Human Services was operated by two staff detailed from the Department of Employment Services. Prior to the transfer, the Department of Employment Services had operated the program with a staff of six. In both cases the staffing was inadequate to process the claims received and to conduct the quarterly reviews. With a full complement of staff, the issues involved in the protracted claims could have been addressed faster and determinations made on a quarterly basis. Recommendation: The Crime Victims Compensation Program review all protracted cases and close those cases that have been inactive for more than two quarters. Recommendation: That CVCP develop a review and approval process that includes technical assistance for claimants and sensitivity to the claimants' status as a crime victim. Recommendation: The CVCP review all pending cases and close all cases in accordance with CVCP rules. Response: These recommendations relate to the ongoing operation of the Crime Victims Compensation Program. While the Department of Human Services concurs that these recommendations would significantly improve the operation of the program and service delivery to clients, the "Victims of Violent Crime Compensation Act of 1996" moved operational responsibility for the program from the Department to the D.C. Superior Court. It would be more appropriate for the Court program to address the process of implementing these recommendations. Recommendation: That stable and reliable funding be established for the CVCP so that it may operate in an efficient and effective manner. Response: The successful delivery of compensation services to victims of crime is contingent upon adequate and reliable funding of the Crime Victims Compensation Program. As the Auditor's report noted, "The past and current funding levels for the CVCP have been entirely inadequate to finance the whole, or a significant part, of the estimated potential liability posed by pending crime victims compensation claims . . . " The program which was transferred to the Department of Human Services in Fiscal Year 1996 did not have any appropriated funding. A backlog of more than four hundred cases was transferred to DHS. In FY 1996 the program operated with only $160,000 in federal grant funds and $55,818.54 in D.C. Superior Court fines. The Department had anticipated that it would be able to secure additional funding and positions to fully operate the program. However, throughout Fiscal Years 1996 and 1997, the budget of the Department of Human Services was reduced to comply with the mandates of Congress and the Financial Authority. With the imposition of the Congressional ceiling on positions, the Department was precluded from adding positions for the Crime Victims Compensation Program. Through passage of the "Victims of Violent Crime Compensation Act of 1996", the D.C. Superior Court Crime Victims Compensation Program will have additional resources. The Act established a Crime Victims Compensation Fund consisting of funds transferred from the Department of Human Services, monies recovered through subrogation or repayment, costs assessed under the Victims of Violent Crimes Compensation Act of 1981 and monies received from the Federal Government or other public or private sources. SUPERIOR COURT OF THE
DISTRICT OF COLUMBIA EUGENE N. HAMILTON Chief Judge September 22, 1997 Ricardo Lyles Dear Mr. Lyles: I am extremely pleased that we were able to resolve the issue of the balance of funding to be transferred by the D.C. Department of Human Services to D.C. Superior Court Crime Victims Compensation Fund in compliance with the "Victims of Violent Crime Compensation Act of 1996," at the exit conference with the Deputy Auditor for the District of Columbia, Deborah Nichols. It is my understanding that the balance to be transferred is $75,625.48, which represents the difference between the $228,116.48 stated in the Auditors Draft Report and the $152,491.00 initially transferred by DHS. This transfer is to take place immediately so that the intra-district budget transfer may be completed prior to the close of the fiscal year on September 30, 1997. Please contact our Fiscal Officer, John Schultheis, who was present at the exit conference, to participate in the transfer process. His address is 515 5th Street, N.W., Room 116, Washington, D.C. 20001. He may be reached by phone at (202) 879-2806. The transfer of this funding will ensure to payment of compensation to many of the victims and their survivors whose claims have been pending for many months. Thank you for your efforts and assistance to the Crime Victims Compensation Program during this period of transition. The success of this program is dependent upon the involvement and cooperation of several agencies and victim service providers. I look forward to future combined efforts of our agencies as we work together in serving the citizens of the District of Columbia. Sincerely, cc: Duane B. Delaney, Esq. Deborah Nicols 1Ten (10) protracted claims were paid in more than one year, payment amount counted in the fiscal year payments were made. 2The maximum benefit is S25,000. An additional ten percent of the claim amount may be paid for attorney fees. |
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