Audit finds control gaps in Wayne County juvenile abuse-and-neglect program; department agrees to corrective actions

Wayne County commissioners on the Committee on Audit voted to receive and file a performance audit of the Department of Juvenile and Youth Services’ abuse-and-neglect program, after auditors identified seven control deficiencies and issued 11 recommendations the department has agreed to implement.

The audit, presented by the auditor general’s staff, examined contract compliance and billing practices for services paid from the child care fund and said auditors performed interviews, analytical procedures and documentation reviews for the engagement period described in the report as "October 23rd through June of 2025." The audit concluded all seven issues were control deficiencies classified as low risk and recommended policy and process changes to strengthen internal controls.

Why it matters: the JYS program uses Michigan Department of Health and Human Services (MDHHS) child care fund reimbursements to pay for services including intensive in‑home care, out‑of‑home placements, drug screenings and behavioral‑health supports. Weaknesses in contractor oversight and billing controls could lead to payments for unapproved or duplicate services and increase county reliance on the general fund when state reimbursements are delayed.

Key findings and responses

- Insurance monitoring: Auditors found risk management had not established documented procedures or a centralized system to track certificates of insurance and expiration dates. Auditors recommended creating policies and a centralized tracking system to ensure contractor coverage meets contract requirements; management agreed.

- Background checks: The audit identified incomplete background‑check practices for contractors and subcontractors, including missing documentation and checks not always completed prior to the first day of service. Auditors recommended JYS verify criminal background checks (including checks of applicable registries) for all staff, contractors and subcontractors who have direct contact with youth or access to confidential records; management agreed and said the department is tightening processes.

- Single‑person billing review and cross‑training: JYS relied on one individual to perform detailed invoice reviews without a documented backup; auditors recommended documenting the review process in policies and cross‑training staff so reviews continue during absences. JYS reported cross‑training and succession‑planning efforts are underway.

- Sampling methodology: Invoice selection for review was judgmental rather than statistically valid, which can introduce bias. Auditors recommended adopting a consistent statistically valid sampling methodology for invoice reviews; management agreed.

- Duplicate and unapproved billings: The audit found duplicate billings in three of 50 sampled records (about $480 in aggregate) and three unapproved billing transactions in a separate 75‑transaction sample (about $1,098). Auditors recommended revising periodic review procedures and working with the county’s billing system vendor so unapproved services do not appear on monthly invoices; management agreed.

- Reimbursement timing: The report said the county took an average of 50 days to submit reimbursement requests to the state after paying contractors and that the state took an average of 65 days to process received requests. Auditors recommended periodic reviews to ensure timely submission of documentation required for state reimbursement so the county is not forced to rely on the general fund for service payments.

Department and auditor comments

Rachel Davis, director of juvenile services, thanked the audit team and said many of the recommendations were already in progress since she joined the department. Shiron Rose, JYS finance director for management and budget, told commissioners that the department’s ability to submit reimbursement requests is constrained by the timing of the third circuit court paperwork and the county general ledger close; once the ledger closes, he said, submissions typically occur within three to five days.

Auditor General Marcy Carl noted that the services in the audit scope were provided by Assured Family Services (AFS) during the reviewed period and that program responsibilities have shifted since then, with some functions moving to the state and some work handled internally by JYS and the third circuit court. Carl and audit staff said the recommendations are applicable to other service providers and indicated the audit team will request a corrective‑action plan to apply recommendations across relevant contracts.

Commissioner action and next steps

After discussion, Commissioner Peterson moved and Commissioner Garza supported a motion to receive and file the audit report; the motion carried. Commissioners asked the department to prepare a corrective‑action plan addressing the audit recommendations—particularly controls over contractor insurance, background checks, billing approvals and sampling methodology—and to present that plan to the Health and Human Services committee for follow up.

The committee adjourned after hearing no public comments.