Youth Commission
An Audit Report on Rider 15: Rates Paid by Texas Youth Commission for Residential Placements
October 1998
Report Number 99-009
Overall Conclusion
The Texas Youth Commission (Commission) needs better data to ensure that it receives the best rates possible for residential placements. Due to the limitations of available data, we could not assess the extent to which the Commission negotiated the most cost-effective rate possible as required by Rider 15 of the General Appropriations Act (75th Legislature). In fiscal year 1997, the Commission expended $27.4 million on 87 contracts for 890 youths.
Generally, contract rates have increased an average of 7.8 percent over the last three years, based on a sample of 27 contracts representing 75 percent of the Commission's contracted care population. The average rate increase roughly parallels the Consumer Price Index for food, shelter, medical care, and other goods and services.
Key Facts and Findings
The Commission should reevaluate the data it requires providers to submit. We recommend providers be required to submit data that would enable the Commission to:
- More closely associate various overhead costs with direct care services for Commission youth.
- Compare unit costs for general living and special services across different providers.
- Conduct external benchmarking of costs for selected services such as counseling and therapy to determine the reasonableness of such costs.
In addition to improvements in cost reporting data, the Commission should review and assess the technical skills staff members need to adequately analyze cost data.
The Commission should also consider allowing providers with a very small number of Commission placements to submit simplified cost reports to reduce the administrative burden associated with such requirements.
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