Investigating Allegations of Noncompliance and Misuse of Funds in

Report
Investigating Allegations of
Noncompliance and/or Misuse of
Funds in the CACFP & SFSP
How the Investigation Affects the
Administrative Hearing
2012 CACFP National Professional
Association Conference- Austin Texas
MH Miles Company, CPA PC
• Full service CPA firm
• Corporate Office in Decatur, GA
• Satellite office in Richmond, VA
• MHM Financial Services - Washington DC
2012 CACFP National Professional
Association Conference- Austin Texas
Specialize in Compliance
FEDERAL
• Nutrition
• Transportation
• Equal Opportunity/ Civil Rights
STATE
Prekindergarten
2012 CACFP National Professional
Association Conference- Austin Texas
Nutrition – CACFP & SFSP
• State Agencies
– Complaint Investigations
– Fraud Investigations
– Agreed-upon Procedure Reviews
– Staff Augmentation
– Policy & Procedure Development
– Internal/External Audit Services
– Budget Reviews
– VCA Analysis
2012 CACFP National Professional
Association Conference- Austin Texas
Nutrition – CACFP & SFSP
• Sponsors
– OMB Circular A-133 audits
– Management Studies
– Programmatic Audits
– Compliance Monitoring
– Management Plan Evaluation
– Policy & Procedure Development
– Accounting System Set-up
2012 CACFP National Professional
Association Conference- Austin Texas
Objectives
•
•
•
•
•
Documenting the Complaint/Allegation
Assessing the allegation(s)
Planning the engagement
Fieldwork
Techniques for Investigating Common
Schemes
• Reporting
• Affects on the Administrative Hearing Process
2012 CACFP National Professional
Association Conference- Austin Texas
Looking at the Big Picture
2012 CACFP National Professional
Association Conference- Austin Texas
Who files Complaints?
Whistleblowers
2012 CACFP National Professional
Association Conference- Austin Texas
WHISTLEBLOWERS
Program Beneficiaries
Parents/Guardians
Caregivers
Employees
Agency
Sub-recipients
General Public
Vendors
2012 CACFP National Professional
Association Conference- Austin Texas
Documenting the
Complaint/Allegation
2012 CACFP National Professional
Association Conference- Austin Texas
Documentation Process
Capture Pertinent Information
• Who received the complaint
• Date Received
• How the complaint was received
– Written
• Email
• Letter
– Recorded
• Voicemail
– Live
• Telephone call
• Interview in person
• Does complainant want to remain anonymous?
2012 CACFP National Professional
Association Conference- Austin Texas
Documentation Process
Documenting the actual complaint
• Written or Recorded
– Verbatim
• Live / complainant doesn’t want to be
anonymous
– Verbatim
– Clarity
2012 CACFP National Professional
Association Conference- Austin Texas
Helpful Words & Phrases
2012 CACFP National Professional
Association Conference- Austin Texas
Organizing the Information
What is being communicated
• What is actually being said?
• Supporting documentation
available?
• Keep the complainant on
track
Side bar thoughts
• What they didn’t say…..
• What other areas are
impacted?
• Follow-up questions
2012 CACFP National Professional
Association Conference- Austin Texas
Documentation Process
• Compiling the information
–Assign a tracking number
–Categorizing the Complaint
2012 CACFP National Professional
Association Conference- Austin Texas
Documentation Process
C 2012-06178-01 - A
Complaint
Identifying Number
Year
Complaint
Category
Sequence in the year
2012 CACFP National Professional
Association Conference- Austin Texas
Assessing the Allegation(s)
• Group allegation(s) in bite size subcategories
1st on face value then by noncompliance
• Additional Observations
• Committee for feedback
• Next Steps
2012 CACFP National Professional
Association Conference- Austin Texas
USDA OIG Complaint Hotline Categories
Participant Fraud
Waste Management
Employee Misconduct
Bribery
Reprisal
Health & Safety
Opinion & Information
National intake-point for reports from both employees and the
general public of suspected incidents of fraud, waste,
mismanagement, and abuse in USDA programs and operations.
2012 CACFP National Professional
Association Conference- Austin Texas
FY2010 – FY2011
USDA-OIG Semiannual Report to Congress
FY2010 1st Half
FY2010 2nd Half
FY2011 1st Half
FY2011 2nd Half
Participant Fraud
780
1,090
931
969
Waste Management
108
165
207
259
Employee Misconduct
183
204
177
172
Bribery
1
1
3
-
Reprisal
1
2
2
4
Health & Safety
25
51
41
31
Opinion & Information
127
198
131
116
Total Complaints
1,225
1,711
1,492
1,551
2012 CACFP National Professional
Association Conference- Austin Texas
USDA-OIG
FY'10 & FY'11
2,000
1,800
TOTAL COMPLAINTS
1,600
1,400
1,200
1,000
800
600
400
FY2011
200
-
FY2010
Waste
Management
273
Employee
Misconduct
387
Bribery
Reprisal
FY2010
Participant
Fraud
1,870
3
Health &
Safety
76
Opinion &
Information
325
2
FY2011
1,900
466
349
3
6
72
247
2012 CACFP National Professional
Association Conference- Austin Texas
Planning the Engagement
Investigation Review Plan
• Review Tools
• Staffing Considerations
• Scope
– Determine Necessary Documents
– Develop Interview List
• Fieldwork- Action Plan
• Timeline
2012 CACFP National Professional
Association Conference- Austin Texas
Review Tools
•
•
•
•
•
•
Review Reports & Management Plan
Interviews
Observations
Program Documentation
Independent Research
Supplies
2012 CACFP National Professional
Association Conference- Austin Texas
Staffing Considerations
• Specific Experience
• Independent
• Coverage & Resources
2012 CACFP National Professional
Association Conference- Austin Texas
Scope & Timeline
•
•
•
•
•
•
Clear & Concise
Regulatory Compliance
Subject to Change
Documentation for Review
Interview List
Develop an initial timeline
2012 CACFP National Professional
Association Conference- Austin Texas
Action Plan
•Start Big
• Drill Down
2012 CACFP National Professional
Association Conference- Austin Texas
Fieldwork
• Entrance Conference
• Document Request
• Tour
2012 CACFP National Professional
Association Conference- Austin Texas
Interviews & Observations
Interview Methodology:
• Telephone Interview
– Quick
– No Travel
– Record
• Ability to record (State)
• Less intimidating
• In-person Interview
– Observe reactions to questions
• Questionnaire
2012 CACFP National Professional
Association Conference- Austin Texas
Interview Objectives
• Gather information related to the allegations
• Identify possible “leads” to support/refute
allegations
2012 CACFP National Professional
Association Conference- Austin Texas
Interview Techniques
• Develop an Interview Plan
• Start with easy questions
– Build rapport
– Relax
•
•
•
•
Identify relationships
Be prepared
Private/Confidential
Choose your words wisely
2012 CACFP National Professional
Association Conference- Austin Texas
Interview Techniques
• Observe body language
• Pose open & close ended questions
• LISTEN
– What is said
– What is not said
• Take Notes- not dictation
• Show documentation where applicable
2012 CACFP National Professional
Association Conference- Austin Texas
Red Flags
• Information changes
• No eye contact
• Long pauses
2012 CACFP National Professional
Association Conference- Austin Texas
Document Analysis Techniques
•
•
•
•
•
•
Horizontal & Vertical Analysis of Information
Signatures
Dates & Times
Transactions
Formatting
Verifying item codes
2012 CACFP National Professional
Association Conference- Austin Texas
Techniques for Common Program
Schemes
Inflated Meal Counts
• Assess knowledge of sponsored facilities
• Confirm affiliated/unaffiliated sites
• Flux analysis of meals by type/site
• Observe behavior
2012 CACFP National Professional
Association Conference- Austin Texas
Techniques for Common Program
Schemes
Inflated Meal Counts
• Open Sites- #of meals delivered = # of meals
served 100%
• Simultaneous Reviews (open site & central
kitchen)
• Arrive early & engage participants
• Observe behavior
• Test Leftover meal practice
2012 CACFP National Professional
Association Conference- Austin Texas
Techniques for Common Program
Schemes
Falsified labor documentation
– Review standardized forms by individual
– Record transaction number by vendor/date/total
– Be familiar with other programs
Duplication of Costs
– Record transaction number by vendor/date/total
– Be familiar with other programs
Other Unallowable Costs
– Cost of Ownership between organizations under
common control
2012 CACFP National Professional
Association Conference- Austin Texas
Reporting
• Status Reports
• Draft Report
• Final Report
– Findings of noncompliance
– Recommendations for oversight
2012 CACFP National Professional
Association Conference- Austin Texas
Administrative Hearing
• Methodology and Results are relied upon to
determine how to move forward
• Notes and emails related to investigation may
be requested
• Weakest Evidence is anything than can be
contradicted
• Anyone who has touched the investigation is a
potential witness
2012 CACFP National Professional
Association Conference- Austin Texas
Ideal Witness
• Education/Training/ Experience in the area
• Knowledge of the investigation
• Testified in other cases & courts have relied on
information presented
• 13 Tips
2012 CACFP National Professional
Association Conference- Austin Texas
2012 CACFP National Professional
Association Conference- Austin Texas
Questions
Cherese Myree, CFE
Vice President, MH Miles Company, CPA PC
(404) 633-4555
[email protected]
2012 CACFP National Professional
Association Conference- Austin Texas
Thank You!
2012 CACFP National Professional
Association Conference- Austin Texas

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