Audit 10344

2023-002 Significant Deficiency over Eligibility (Repeat Finding) Information on the federal program: Medicaid Cluster (Medicaid), Assistance Listing Number 93.778, U.S. Department of Health and Human Services, passed through the N.C Department of Health and Human Services (NCDHHS), Division of Medical Assistance. Criteria: Per the North Carolina Medicaid Assistance Program (Medicaid; Title XIX) Compliance Supplement and the DSS manuals (Aged, Blind and Disabled manual, Family and Children Medicaid manual and the Integrated Policy manual), case files for individuals or families receiving assistance are required to retain documentation to service as evidence for the appropriate eligibility determination, including: • accurate computation of countable income and resources • verification of unearned income • verification of earned income Condition: We noted one instance where the amount of unearned income was verified but not updated in NC FAST Online Verification System. We noted two instances where the applicant’s citizenship were not validated at the time of application and two instances where a second proof of state residence verification were not obtained. We noted one instance where the onset date of the applicant’s disability did not match the NC FAST Online Verification System. Context/Cause: The County did not retain required documentation in case files at the time eligibility was determined. We noted the above conditions in 6 out of the 60 case files inspected for applicable payments. Effects: Case files not containing all required documentation results in a risk that the County could provide services to individuals not eligible to receive such services or that such services could be denied to eligible individuals. For all 6 cases, subsequent to being notified that required documentation had not been retained in the case file, the County was able to obtain documentation to substantiate that the applicant tested were eligible to receive benefits. Recommendation: We recommend that the County train and monitor employees on the eligibility determination process. We also recommend the County review and amend current policies and procedures in place to ensure that all eligibility determination documentation is completed and retained by the County. Auditee’s Response: We concur with the findings.

2023-003 Material Weakness over Subrecipient Monitoring Information on the federal program: Emergency Rental Assistance Program (ERAP), Assistance Listing Number 21.023, U.S. Department of Treasury Criteria: Per 2 CFR Section 200.332(b), an evaluation of each subrecipient’s risk of noncompliance for purpose of determining the appropriate subrecipient monitoring must be performed. An entity should monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with terms and conditions of the subaward, and achieves performance goals per 2 CFR Section 200.332 (d) through (f). Condition: We noted the County had one subrecipient for this program. The County did not perform or document a subrecipient risk assessment or internal control assessment for the subrecipient. Additionally, we noted no on-site visit or desk review was performed of the subrecipient during the fiscal year. Context/Cause: The County did not perform a subrecipient risk assessment or internal control assessment and therefore the requirement for an on-site visit or desk review was not determined or performed. The County did review the subrecipient invoices for services rendered and determined the invoices were allowable and within the period of performance for the ERAP. Effects: Inadequate subrecipient monitoring could lead to unallowable costs or activities, cost occurring in the wrong period of performance, individuals receiving funding that were not eligible, or incorrect quarterly report and close out reports. Recommendation: We recommend that the County create a subrecipient monitoring policy to monitor federal awards in accordance with the contract and Uniform grant guidance. The subrecipient monitoring policy should include performing a risk assessment to determine the level of subrecipient monitoring required. Additionally, we recommend the County conduct site visits and/or perform a random sampling of charges based on the results of the risk assessment. Auditee’s Response: The County acknowledges the recommendation on subrecipient monitoring. An organization-wide documented policy is being developed by the newly established Grants Management program officers. The new policy will meet current Federal guidance on subrecipient monitoring and will include resources and recommendations for County Departments to perform a risk assessment, internal control assessment, onsite visits, and desk reviews as applicable. The Housing Department will perform a program closeout monitoring for this program in the coming months.

2023-002 Significant Deficiency over Eligibility (Repeat Finding) Information on the federal program: Medicaid Cluster (Medicaid), Assistance Listing Number 93.778, U.S. Department of Health and Human Services, passed through the N.C Department of Health and Human Services (NCDHHS), Division of Medical Assistance. Criteria: Per the North Carolina Medicaid Assistance Program (Medicaid; Title XIX) Compliance Supplement and the DSS manuals (Aged, Blind and Disabled manual, Family and Children Medicaid manual and the Integrated Policy manual), case files for individuals or families receiving assistance are required to retain documentation to service as evidence for the appropriate eligibility determination, including: • accurate computation of countable income and resources • verification of unearned income • verification of earned income Condition: We noted one instance where the amount of unearned income was verified but not updated in NC FAST Online Verification System. We noted two instances where the applicant’s citizenship were not validated at the time of application and two instances where a second proof of state residence verification were not obtained. We noted one instance where the onset date of the applicant’s disability did not match the NC FAST Online Verification System. Context/Cause: The County did not retain required documentation in case files at the time eligibility was determined. We noted the above conditions in 6 out of the 60 case files inspected for applicable payments. Effects: Case files not containing all required documentation results in a risk that the County could provide services to individuals not eligible to receive such services or that such services could be denied to eligible individuals. For all 6 cases, subsequent to being notified that required documentation had not been retained in the case file, the County was able to obtain documentation to substantiate that the applicant tested were eligible to receive benefits. Recommendation: We recommend that the County train and monitor employees on the eligibility determination process. We also recommend the County review and amend current policies and procedures in place to ensure that all eligibility determination documentation is completed and retained by the County. Auditee’s Response: We concur with the findings.

2023-003 Material Weakness over Subrecipient Monitoring Information on the federal program: Emergency Rental Assistance Program (ERAP), Assistance Listing Number 21.023, U.S. Department of Treasury Criteria: Per 2 CFR Section 200.332(b), an evaluation of each subrecipient’s risk of noncompliance for purpose of determining the appropriate subrecipient monitoring must be performed. An entity should monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with terms and conditions of the subaward, and achieves performance goals per 2 CFR Section 200.332 (d) through (f). Condition: We noted the County had one subrecipient for this program. The County did not perform or document a subrecipient risk assessment or internal control assessment for the subrecipient. Additionally, we noted no on-site visit or desk review was performed of the subrecipient during the fiscal year. Context/Cause: The County did not perform a subrecipient risk assessment or internal control assessment and therefore the requirement for an on-site visit or desk review was not determined or performed. The County did review the subrecipient invoices for services rendered and determined the invoices were allowable and within the period of performance for the ERAP. Effects: Inadequate subrecipient monitoring could lead to unallowable costs or activities, cost occurring in the wrong period of performance, individuals receiving funding that were not eligible, or incorrect quarterly report and close out reports. Recommendation: We recommend that the County create a subrecipient monitoring policy to monitor federal awards in accordance with the contract and Uniform grant guidance. The subrecipient monitoring policy should include performing a risk assessment to determine the level of subrecipient monitoring required. Additionally, we recommend the County conduct site visits and/or perform a random sampling of charges based on the results of the risk assessment. Auditee’s Response: The County acknowledges the recommendation on subrecipient monitoring. An organization-wide documented policy is being developed by the newly established Grants Management program officers. The new policy will meet current Federal guidance on subrecipient monitoring and will include resources and recommendations for County Departments to perform a risk assessment, internal control assessment, onsite visits, and desk reviews as applicable. The Housing Department will perform a program closeout monitoring for this program in the coming months.