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<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Because this was not properly
paginated I could not convert it until I went through the back door. Regardless,
this is relevant to MCB and neither commissioners nor the public get
appappropriate documentation about the fiscal affairs of MCB to ensure that
programs are run on the up and up.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><?xml:namespace prefix = o ns =
"urn:schemas-microsoft-com:office:office" /><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">In fact I wonder if MCB makes the
Auditor General go through FOIA to request financial <SPAN
style="mso-spacerun: yes"> </SPAN>data?</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Moreover, the real issues are not
the ones cited herein, but rather systemic issues related to vendor compliance
and whether or not MCB counselors and management follow the Rehab Act and PA
260. I mean how many MCB customers even have their IPEs in accessible format?
How many are determined eeligable for services within the required time period
especially those that are supposed to be fastracked under the 1998 amendments if
they are also determined to be legally blind and have SSI/SSDI by the SSA?</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">And there are of course other
issues which have been documented over the years.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Joe Harcz</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">TABLE OF CONTENTS </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>REHABILITATION SERVICE EXPENDITURES </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MICHIGAN REHABILITATION SERVICES
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">DEPARTMENT OF LICENSING AND
REGULATORY AFFAIRS </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Page </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">INTRODUCTION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Report Summary 1 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Report Letter 3 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Description of Agency 7 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Audit Objectives, Scope, and
Methodology and Agency Responses </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>and Prior Audit Follow-Up 9 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>COMMENTS, FINDINGS, RECOMMENDATIONS, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">AND AGENCY PRELIMINARY RESPONSES
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Propriety of Service Payments 13 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">1. Vehicles and Related Costs 13
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">2. Equipment Recovery 15 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">3. Expenditures for Maintenance
Services 17 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">4. Receipts for Purchased
Services 18 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">5. Identity Verification 20 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Coordination of Benefits and
Services 21 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">6. Comparable Benefits and
Services 22 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Viable and Sustainable Employment
23 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>SUPPLEMENTAL INFORMATION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Exhibit 1 - Office Locations and Service
Areas 26 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Exhibit 2 - Fiscal Year 2009-10
Expenditures 28 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>GLOSSARY </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Glossary of Acronyms and Terms 30 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Description of Agency </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Michigan Rehabilitation Services (MRS),
Department of Licensing and Regulatory </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Affairs, offers services to
persons who need vocational rehabilitation services to prepare </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">for, find, and retain a job. MRS
serves customers at 36 field offices and 95 Michigan </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Works! Service Centers that are
located throughout Michigan (see Exhibit 1). In </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">addition, MRS provides services
to customers at the Michigan Career and Technical </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Institute, a post-secondary,
residential, and vocational trade-training program, with </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">campuses located in Plainwell and
Detroit, Michigan. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS's primary activity is the direct
provision of vocational rehabilitation services. To be </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">eligible for MRS services,
customers must have a physical or mental disability that </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">interferes with their ability to
work except for those who are legally blind and served by </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">the Michigan Commission for the
Blind. MRS provides eligible customers with </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">individualized services to meet
their specific needs. Services may include: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>• Vocational and guidance counseling.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• Vocational training. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• Job coaching and job placement.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• Medical treatment and
restoration services. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• Transportation. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• College tuition assistance.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">• Assistive technology. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS also provides specific
post-employment services necessary to assist customers in </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">maintaining employment. Services
may include payment for items such as vehicles, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicle and home modifications,
and employment accommodations. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Rehabilitation counselors, in conjunction
with the customers, determine the services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">that MRS will provide to the
customers. The rehabilitation process requires </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">considerable professional
judgment by the counselor. Counselors service customers </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">with a wide range of disabilities
and frequently refer customers to receive services from </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">other State and local social
service agencies, school districts, private rehabilitation </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">agencies, hospitals, medical
professionals, and potential employers. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>The U.S. Department of Education provides
the majority of MRS's program funding with </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">the State's General Fund and
local entities providing the State's funding portion. The </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">ratio of federal funds to State
and local funds is 78.7% federal and 21.3% State and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">local. MRS expended $113.6
million during fiscal year 2009-10, of which $47.1 million </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">was spent directly on customer
services, excluding vocational counseling, as presented </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">in Exhibit 2. MRS served 51,473
customers during fiscal year 2009-10, resulting in an </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">average annual cost for services
of $915 per customer. MRS had 505 employees as of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">July 31, 2011. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Objectives, Scope, and Methodology
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">and Agency Responses and Prior
Audit Follow-Up </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Objectives </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Our performance audit* of
Rehabilitation Service Expenditures, Michigan Rehabilitation </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Services (MRS), Department of
Licensing and Regulatory Affairs, had the following </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">objectives: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>1. To assess the effectiveness* of MRS's
efforts to ensure the propriety of service </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">payments. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>2. To assess the effectiveness of MRS's
efforts to facilitate the coordination of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">benefits and services. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>3. To assess the effectiveness of MRS's
efforts to determine that services resulted in </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">viable and sustainable
employment. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Scope </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Our audit scope was to examine
and evaluate rehabilitation service expenditures and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">other program records within
Michigan Rehabilitation Services. We conducted this </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">performance audit in accordance
with generally accepted government auditing </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">standards. Those standards
require that we plan and perform the audit to obtain </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">sufficient, appropriate evidence
to provide a reasonable basis for our findings and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">conclusions based on our audit
objectives. We believe that the evidence obtained </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">provides a reasonable basis for
our findings and conclusions based on our audit </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">objectives. Our audit procedures,
conducted from May through August 2011, generally </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">covered the period October 1,
2008 through July 31, 2011. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>As part of our audit report, we included
supplemental information that relates to our </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">audit objectives (Exhibits 1 and
2). Our audit was not directed toward expressing an </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">opinion on this information and,
accordingly, we express no opinion on it. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>* See glossary at end of report
for definition. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Audit Methodology </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We conducted a preliminary review
of MRS's operations to form a basis for defining our </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">audit scope. Our preliminary
review included interviewing MRS staff regarding their </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">functions and responsibilities,
reviewing MRS's policies and procedures and applicable </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">laws and regulations, and
analyzing program data. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>To accomplish our objectives, we selected
MRS customers who had received MRS </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services for the period October
1, 2008 through July 31, 2011 and reviewed supporting </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">documentation maintained in each
customer's case file to determine whether MRS had </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">provided the services in
accordance with established policies and procedures. We also </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">reviewed the case files to
ascertain whether comparable benefits and services were </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">utilized before MRS funds were
expended. In addition, we evaluated the effect that </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS services had on the
customer's ability to obtain and retain viable and sustainable </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">employment. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>When selecting activities or programs for
audit, we use an approach based on </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">assessment of risk and
opportunity for improvement. Accordingly, we focus our audit </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">efforts on activities or programs
having the greatest probability for needing improvement </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">as identified through a
preliminary review. Our limited audit resources are used, by </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">design, to identify where and how
improvements can be made. Consequently, we </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">prepare our performance audit
reports on an exception basis. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Agency Responses and Prior Audit
Follow-Up </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Our audit report contains 6
findings and 6 corresponding recommendations. MRS's </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">preliminary response indicated
that it agrees with all 6 recommendations. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>The agency preliminary response that
follows each recommendation in our report was </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">taken from the agency's written
comments and oral discussion subsequent to our audit </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">fieldwork. Section 18.1462 of the
Michigan Compiled Laws and the State of Michigan </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Financial Management Guide (Part
VII, Chapter 4, Section 100) require the Department </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">of Licensing and Regulatory
Affairs to develop a plan to comply with the audit </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">recommendations and submit it
within 60 days after release of the audit report to the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Office of Internal Audit
Services, State Budget Office. Within 30 days of receipt, the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Office of Internal Audit Services
is required to review the plan and either accept the plan </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">as final or contact the agency to
take additional steps to finalize the plan. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Within the scope of this audit, we
followed up 1 of the 10 prior audit recommendations </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">from our July 2002 performance
audit of Michigan Rehabilitation Services (45-240-01). </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We also followed up 1 of 10 prior
audit recommendations from our March 2009 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">performance audit of the
Accessible Web-Based Activity and Reporting Environment </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">(AWARE) (641-0591-08). MRS
complied with 1 of the 2 prior audit recommendations </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">included within the scope of our
current audit. The other recommendation was rewritten </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">in Finding 1, Finding 3, and
Finding 4 for inclusion in this report. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>COMMENTS,
FINDINGS, RECOMMENDATIONS, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">AND AGENCY PRELIMINARY RESPONSES
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>immediate need as the customer can
replace the vehicle from earnings once </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">employment has begun. The guide
adds that a vehicle that is needed to transport </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">a customer for several years of
training should be a vehicle that can be expected to </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">last long enough to complete that
particular IPE service without major repairs. The </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">guide further states that while
it is difficult to do comparison-shopping for used </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicles, it is still possible to
identify several options rather than purchasing the first </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicle that passes a vehicle
inspection. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Of the 100 randomly selected MRS cases
reviewed, 22 cases included 23 vehicle </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">purchases totaling $498,327. We
identified 18 (78%) of 23 vehicle purchases </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">totaling $410,513 that were not
documented in accordance with MRS policy. Our </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">review disclosed: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>a. MRS did not document in the case
records why vehicle purchases were </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">essential to the individual's
employment needs for 4 vehicle purchases totaling </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">$55,496. For example, MRS paid
$30,998 for a vehicle and vehicle </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">modifications for a customer
whose employment goal was to be a homemaker. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">The IPE for the customer stated
that the reason for the goal was to allow the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">customer to maintain an
independent lifestyle. As more fully described in </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS policy 5025, Employment Goal
and Outcome, the MRS Homemaker </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Activities Chart outlines the
core work areas that the customer will complete </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">during the rehabilitation process
to become a homemaker. The chart did not </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">identify that the purchase of a
vehicle was required for any of the core work </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">areas to be completed to fulfill
the IPE. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>b. MRS did not document in the case files
for which MRS purchased 6 new </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicles totaling $266,544 why a
used vehicle was not a viable alternative. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">For example, MRS purchased a new
vehicle with modifications for $68,000 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">when MRS was informed by the
vendor at the time of purchase that a used </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicle with all necessary
modifications was available for $51,185. Without </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">appropriate documentation, MRS
cannot justify its rationale for spending an </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">additional $16,815 for the
purchase of a new vehicle. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>c. The MRS case files for 18 vehicle
purchases did not contain basic driverrelated </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">documentation required by MRS
policy: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>(1) MRS did not document the required
vehicle registration or vehicle title </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">and proof of insurance for 12
(67%) of the vehicles purchased. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>(2) MRS did not document that the
customers possessed valid driver's </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">licenses for 5 (28%) of the
vehicles purchased. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>RECOMMENDATION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We recommend that MRS obtain
required documentation related to vehicle </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">purchases made on behalf of MRS
customers. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will improve case
management training and the case review </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">process so that appropriate
documentation is obtained for vehicle purchases made </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">on behalf of MRS customers. MRS
stated that this will involve increased </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">monitoring along with individual,
local, and system improvements. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>FINDING </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">2. Equipment Recovery </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS had not developed a process
to recover equipment purchased for customers </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">who no longer used the equipment.
As a result, MRS did not recover purchased </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">equipment from unrehabilitated
customers and subsequently redistribute </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">equipment to other MRS customers.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS policy 6200, Equipment and Tools,
states that MRS customers shall be </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">informed of their responsibility
to offer to return any equipment purchased that is no </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">longer being used for its
original intended purpose. However, the IPE, a signed </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">agreement between MRS and the
customer, states that it is the customer's </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">responsibility to return any
equipment purchased by MRS if the equipment is no </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">longer being used as originally
planned. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will develop
guidelines for recovering equipment purchased for </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">customers who no longer use the
equipment. MRS stated that, in accordance with </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS policy 6200, it will continue
to inform customers at orientation, intake, and IPE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">development that equipment no
longer used as planned must be offered for return. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>FINDING </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">3. Expenditures for Maintenance
Services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS's controls over expenditures
for maintenance services did not ensure that all </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">such expenditures were necessary
and made in accordance with established </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">policy. As a result, MRS paid for
services not provided for in MRS policy. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS policy 6350, Maintenance, states that
maintenance services may be provided </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">only for additional costs, over
and above normal living expenses, which customers </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">incur because of their
participation in assessments or IPE services. However, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS's Cost Management Strategies
guide states it is not the federal intent that </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS be a welfare program. The
guide states that federal law and regulations </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">clearly indicate that MRS is not
responsible for the everyday costs that customers </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">would incur for maintenance and
transportation regardless of whether they </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">participated in a rehabilitation
program. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Of the 100 randomly selected MRS cases
reviewed, 24 cases included </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">maintenance service costs
totaling $28,305. We noted that 14 (58%) of the 24 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">cases did not support the need
for maintenance service payments totaling $14,071. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">As a result, the services may not
have been necessary and, therefore, may not </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">have been in accordance with MRS
policy. For example: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>a. MRS provided assistance totaling
$5,080 to a customer who was employed </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">full time for gas, food,
clothing, and household bills. Also, MRS provided this </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">customer with $120 to assist with
expunging the customer's criminal record. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>b. MRS continued to provide assistance
to a second customer when the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">customer was employed full time.
Such assistance totaled $2,481 for mileage, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">lodging, and food costs during a
three-month period while the customer was </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">employed full time. In addition,
MRS continued to provide job placement </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services totaling $216 for travel
costs, which the customer incurred while </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">traveling to a job interview,
after the customer's IPE goal was achieved and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">the customer already obtained
full-time employment. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>c. MRS paid court costs totaling $450 for
a third customer. MRS documented </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">that the customer needed to pay
the court costs because the customer was at </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">risk of going to jail for three
months if the costs were not paid. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>RECOMMENDATION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We recommend that MRS improve its
controls over expenditures for maintenance </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services to ensure that all such
expenditures are necessary and made in </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">accordance with established
policy. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will improve case
management training and the case review </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">process so that appropriate
documentation is obtained for maintenance services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">expenditures made on behalf of
MRS customers. MRS stated that this will involve </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">increased monitoring along with
individual, local, and system improvements. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>FINDING </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">4. Receipts for Purchased
Services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS did not obtain receipts to
substantiate payments for purchases of services. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">As a result, MRS could not ensure
that all payments were expended and utilized </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">appropriately. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS policy 2080, Hard Copy Case Records
Content and Order, and MRS </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">policy 9200, Billing and Payment
for Services, state that receipts for purchases of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services shall be documented to
substantiate those services provided. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Of the 100 randomly selected MRS cases
reviewed, 30 cases lacked sufficient </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">receipt-related documentation for
32 payments totaling $105,885. We noted: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>a. MRS did not obtain receipts from 2
different vendors for vehicles and vehicle </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">modifications totaling $37,315
and $39,645, respectively. The case files </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">contained several quotes but did
not contain final invoices for the vehicles and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">vehicle modifications purchased.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>b. MRS provided 3 checks totaling $1,200
directly to a customer for the purchase </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">of a vehicle. However, MRS did
not receive documentation that the vehicle </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">was actually purchased or
received by the customer. In addition, shortly after </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS provided funds to the
customer for the purchase of the vehicle, the case </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">was closed by MRS at the request
of the customer because of health </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">concerns. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>c. MRS provided 5 checks totaling $2,500
directly to a customer for employmentrelated </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">relocation expenses. However, the
case file did not contain any </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">documentation substantiating
these expenses. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>d. MRS provided a payment of $471
directly to a customer to attend a real estate </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">conference. This amount was to
pay for transportation costs and hotel fees </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">the customer incurred during the
real estate conference. However, the case </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">file did not contain any
documentation substantiating these expenses. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>RECOMMENDATION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We recommend that MRS obtain
receipts to substantiate payments for purchases </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">of services. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will improve case
management training and the case review </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">process so that appropriate
receipts to substantiate payments for purchases of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services are obtained. MRS stated
that this will involve increased monitoring along </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">with individual, local, and
system improvements. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will improve case
management training and the case review </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">process so that appropriate
documentation verifying applicants' identities is </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">obtained before services are
provided. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS stated that it is in the process of
changing its customer identification policy in </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">response to a corrective action
required by the federal Rehabilitation Services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Administration. This change will
clarify that other forms of evidence are acceptable </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">for proving an individual's state
residency. MRS also stated that the policy change </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">is necessary to ensure that MRS
applicants are not subject to a duration of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">residency requirement, which is
prohibited by Section 101(a)(12) of the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Rehabilitation Act and Title 34,
Part 361, section 42(c)(1) of the Code of Federal </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Regulations. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>MRS informed us that it will continue to
submit application records from its case </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">management system (Accessible
Web-Based Activity and Reporting Environment </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">[AWARE]) to the Social Security
Administration every week for social security </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">number verification. MRS stated
that these records include four pieces of </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">identifying information. MRS
added that a discrepancy occurs in approximately 2% </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">of the applications. In these
instances, MRS stated that it works with the customer </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">for up to 90 days to obtain a
correction or the case is closed. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>COORDINATION OF BENEFITS AND SERVICES
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>COMMENT </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Audit Objective: To assess the
effectiveness of MRS's efforts to facilitate the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">coordination of benefits and
services. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Conclusion: We concluded that MRS's
efforts to facilitate the coordination </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">of benefits and services were
moderately effective. Our audit disclosed one </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">reportable condition related to
comparable benefits and services (Finding 6). </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>AGENCY PRELIMINARY RESPONSE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS agrees and will improve case
management training and the case review </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">process so that comparable
benefits and services are utilized before MRS funds </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">are expended. MRS stated that
this will involve increased monitoring along with </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">individual, local, and system
improvements. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>VIABLE AND SUSTAINABLE EMPLOYMENT </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>COMMENT </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Audit Objective: To assess the
effectiveness of MRS's efforts to determine that </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services resulted in viable and
sustainable employment. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Conclusion: We concluded that MRS's
efforts to determine that services </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">resulted in viable and
sustainable employment were effective. Our audit report </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">does not include any reportable
conditions related to this audit objective. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes">
</SPAN>INTENTIONALLY BLANK PAGE </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>SUPPLEMENTAL
INFORMATION </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>GLOSSARY </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Reportable Condition: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS did not always identify
comparable </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">benefits and services from other
sources </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">(Finding 6).<SPAN
style="mso-spacerun: yes"> </SPAN>~~~~~~~~~~ </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Objective: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">To assess the effectiveness of
MRS's </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">efforts to determine that
services resulted </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">in viable and sustainable
employment. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Audit Conclusion: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We concluded that MRS's efforts
to </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">determine that services resulted
in viable </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">and sustainable employment were
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">effective. Our audit report does
not </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">include any reportable conditions
related </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">to this audit objective. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>~~~~~~~~~~ </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Agency Response: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Our audit report contains 6
findings and </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">6 corresponding recommendations.
</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">MRS's preliminary response
indicated </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">that it agrees with all 6 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">recommendations. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>~~~~~~~~~~ </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>January 11, 2012 </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Mr. Steven H. Hilfinger, Director </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Department of Licensing and
Regulatory Affairs </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Ottawa Building </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Lansing, Michigan </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Dear Mr. Hilfinger: </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>This is our report on the performance
audit of Rehabilitation Service Expenditures, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Michigan Rehabilitation Services,
Department of Licensing and Regulatory Affairs. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>This report contains our report summary;
description of agency; audit objectives, scope, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">and methodology and agency
responses and prior audit follow-up; comments, findings, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">recommendations, and agency
preliminary responses; two exhibits, presented as </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">supplemental information; and a
glossary of acronyms and terms. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Our comments, findings, and
recommendations are organized by audit objective. The </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">agency preliminary responses were
taken from the agency's responses subsequent to </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">our audit fieldwork. The Michigan
Compiled Laws and administrative procedures </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">require that the audited agency
develop a plan to comply with the audit </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">recommendations and submit it
within 60 days after release of the audit report to the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Office of Internal Audit
Services, State Budget Office. Within 30 days of receipt, the </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Office of Internal Audit Services
is required to review the plan and either accept the plan </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">as final or contact the agency to
take additional steps to finalize the plan. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>We appreciate the courtesy and
cooperation extended to us during this audit. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Sincerely, </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Thomas H. McTavish, C.P.A. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Auditor General </P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P></DIV></BODY></HTML>