Performance Audit of RSC

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					                           Performance Audit of RSC
                                 Questions and Answers
                                     Office of Communications


Why was there an audit by the state auditor’s office?
As part of the biennial budget bill (House Bill 119) last year the Ohio General Assembly
asked the Auditor of State to conduct a performance audit of the Ohio Rehabilitation
Services Commission. Conducting performance and fiscal audits of public entities are
routine activities for the state auditor’s office.

What is a performance or programmatic audit?
A performance audit looks at all aspects of an organization, including its services,
programs, management, communications, technology, spending and organizational
structure. This type of audit determines how an organization functions and if it can
function better and more efficiently. Audits also identify or highlight instances of
superior performance and service.

Although the auditors studied RSC’s financial management, they did not conduct a fiscal
audit, or look at the “books.” RSC has not been cited for any fiscal findings of recovery
for more than a decade. That record is a good indicator to Ohio taxpayers that the
agency manages funds in compliance with laws and regulations.

When did the audit take place? What was the timetable?
In an October 1 letter, Chief Auditor James Penning explained to RSC Executive Director
John Connelly that the purpose of the audit was to “produce a thorough, well-balanced
report that can be used to guide and assist your agency as it evolves in future years.”
Auditors began their work two days later. A team from the state auditor’s office worked
with RSC up to the official release of the report. A confidential draft report by audit
team was given to Executive Director John Connelly in March. Comments to that report
were returned to the audit team in April. A meeting comprised of the audit team, RSC
executive team, and commissioners was held on May 21. RSC returned additional
comments to the auditors a week later, and its final response, for the public record, on
June 5. As instructed in House Bill 119, the governor, speaker of the Ohio House of
Representatives, president of the Ohio Senate, and Office of Budget Management will
be given copies of the audit report.

How did the auditors get their information?
The auditors interviewed RSC’s leadership team, RSC managers, random employees,
advocate groups, community rehabilitation partners, and other named stakeholders.
Employers who hire RSC consumers were not interviewed. Auditors did not identify
people they interviewed by name. Auditors also examined documents and information
requested from RSC, the Rehabilitation Services Administration, Social Security
Administration, and other sources identified in the report.

How much did the audit cost and who pays for it?
According to House Bill 119, RSC will pay for the audit. To date, RSC has spent more than
$300,000 for the audit.

What did the audit conclude?
The audit highlighted several noteworthy accomplishments and published
recommendations on ways RSC can improve its organizational structure, fiscal
management, communications with stakeholders, and customer service. These are
noted below, along with recommendations that RSC started before or during the audit
are listed below.
       Noteworthy accomplishments
          BVR and BSVI were praised for increasing the number of people served and
           “successful closures with employment outcomes.” Elsewhere, auditors noted
           “Service production statistics compared to peer states.” The VR bureaus also
           won kudos for “evaluating and communicating performance statistics with
           staff.”
          Auditors described BDD as “well-run and efficient.” The bureau’s adoption of
           automated electronic file system was noted as an accomplishment. The CDIU
           team was hailed for uncovering fraudulent claims and saving taxpayers more
           than $100 million.
          The Information Technology department was applauded for “extensive
           security measures” to ensure confidentiality of data, and for being 92
           percent compliant with state security requirements.
          RSC’s uses of teleconferencing and video conferencing were viewed as ways
           to reduce travel expenses, improve productivity, and enhance convenience.
          The agency’s Leadership Development Program was identified as a way to
           “help the agency address [job] succession planning needs through
           development of current employees who exhibit management and leadership
           potential.”
          RSC’s annual report and magazine “provide valuable information on Ohio’s
           VR services.”

       Key recommendations
        Better communicate the agency’s mission and priorities to internal and
         external stakeholders.
        Link the agency’s strategic plan to the budget.
        Better promote agency performance measures; openly report results,
         outcomes.
          Commissioners should self-evaluate their performance, improve training.
          Complete a communications audit for agency bureaus.
          Reorganize internal workflow; hire a second assistant executive director.
          Clarify relationship between RSC and Governor’s Council on People with
           Disabilities.
          Create internal audit team, improve internal controls, and update policies
           and procedures.
          Improve consistency in determining eligibility for VR services, and delivery of
           services.
          Improve consumer feedback.
          Redistribute disability claims workflow; increase the number of claims per
           adjudicator.
          Better communicate with the Ohio Department of Job & Family Services to
           reduce duplications and cost of medical evidence.

       Recommendations underway or completed
          BDD call center
          Business continuity plan
          Intranet
          Review of Employer Services Unit
          More oversight for commissioners
          Pursuit of RSA grants
          More video-conferencing
          Better communication with state agencies, stakeholders
          Replace case management system (OSCAR)
          Electronic signature policy

One recommendation calls for restructuring RSC. Does that mean RSC is
going to merge with another agency, or be relocated?
The audit report recommends three ways for RSC to bolster its organizational structure
and reduce costs: strengthen oversight by its seven-member commission; “elevating the
Agency to a cabinet-level position;” and “consolidating it into an existing agency.” The
audit did not call for spinning off any RSC bureau and relocating it elsewhere.

Acting on the first suggestion, the RSC commissioners sent a letter to the Governor
calling for more oversight; and they established budget and strategic plan committees at
their June 2 meeting. In its response to the other recommendations, RSC indicated the
report “does not make the financial, business or programmatic case to justify” a major
reorganization. Indeed, the audit reported that any savings from such moves “could not
be calculated.” Reorganization would disrupt service, and require legislative action in
the Ohio General Assembly.
Where can I read the entire audit report?
The full report can be found online at Auditor of State Web site at
www.auditor.state.oh.us.

Which recommendations will RSC adopt?
The recommendations in the audit are exactly that—recommendations. Implementation
of some recommendations has been completed or started (see above). RSC will
thoroughly study the recommendations in the report and identify those that align with
the agency’s mission and vision, and improve outcomes for customers, service,
accountability, communications and management. Many of you may be involved in
discussions regarding audit recommendations. Budget challenges also will determine
which recommendations are feasible.

What happens if RSC does not comply with the recommendations?
RSC views the audit as a tool to improve its operations. With that in mind, we already
have implemented some recommendations. The audit did not establish compliance
procedures, deadlines, or penalties for failing to comply with recommendations. Budget
challenges also must be considered as recommendations.

Why were the draft audit reports and meetings kept confidential?
Under Ohio law, meetings among auditors, agencies, and governing bodies are
confidential to encourage cooperation and speedy exchange of ideas and information.
Under this law, meetings involving RSC commissioners were not deemed public
meetings. The audit report became a public document when it was officially released by
the Auditor of Ohio. To the extent possible, RSC’s executive team advised employees on
the progress of the audit.

How does the state audit differ from the review by the Rehabilitation
Services Administration (RSA) or those done by the Social Security
Administration (SSA)?
This is the first state performance audit in RSC’s 38-year history. As noted above, the
state performance audit examined all aspects of RSC, including the Bureau of Disability
Determination. The RSA only monitors RSC vocational rehabilitation programs. The
federal agency audits state VR programs on a schedule, about every four years. RSA’s
audit team visited RSC for a week in early April, and provided feedback. RSA’s final
report is expected in autumn. The RSA pays for that audit. SSA auditors only look at BDD
operations, not the whole agency.

What is RSC’s response to the audit?
RSC appreciates the in-depth examination conducted by the state auditor. An
independent set of eyes will reveal examples of exemplary performance as well as new
ideas for efficiencies and better service. Please refer to the news release and agency
response letter (part of the official audit) for more information. Elected officials,
community rehabilitation partners, employers, advocacy groups and other stakeholders
also will receive information about the state audit.

Are the audits, hiring control and budget cuts related to each other?
The simultaneous occurrence of these events at RSC is coincidental. The state hiring
control and budget cuts stem from the fiscal challenges that the state government
began confronting last autumn. The state performance audit process began last October
before announcement of Ohio’s budget shortfall. RSA scheduled its review of RSC in
2007.

How has RSC performed as a human services agency?
We should all be proud of our performance and the service we provide Ohioans with
disabilities. The agency has put more people with disabilities to work in each of at least
five straight years, and more than 41,000 in that span. While the number of
rehabilitated people finding jobs via RSC has risen 24.3 percent since 2003, its
administrative costs for VR have dropped 23 percent. The work of RSC’s dedicated
professionals exceeds national averages in key performance measures. Our
administrative costs for VR are 7.3 percent of all expenditures; the national average is
9.5 percent. Here are more bottom line consumer performance comparisons:
   Average hourly wage               $11.92 - Ohio          $11.02 - U.S. (2006)
   Average weekly paycheck           $394.20 - Ohio         $345.83 - U.S.
   Average work week (hours)         33.24 - Ohio           32.69 - U.S.

Between 2002 and 2006, the number of closed cases with employer-provided medical
insurance rose 133 percent in Ohio, compared to less than one percent nationally. In
2006, about 48 percent of RSC closures had medical insurance, ranking the agency
second in the U.S. The national average was 35 percent.

The number of transition youths RSC served between 2002 and 2006 went up 27.6,
compared to less than one percent nationally. Nearly 40 percent of the transition youths
hired had medical insurance, compared to 27 percent nationally.

The Bureau of Disability Determination recently earned a SSA Commissioner’s Citation
for distinguished service. BDD handled nearly 170,000 cases last year, exceeding its goal
by more than 5,550 cases. The bureau has dramatically reduced the average length of
time to determine claims since 2006--by 12 days for SSDI claims; 13 days for SSI claims.
BDD’s net accuracy in 2007 surpassed the regional and national accuracy rates.