Audit 10394

2022-002 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Significant Deficiency Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2201MNTANF; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Minnesota Department of Human Services (DHS) maintains the computer system, MAXIS, which is used by Clay County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • One case file did not have documentation to support a parent relationship, • two case files had differences between documentation supporting asset amounts in the case file and amounts input into MAXIS, and • two case files had differences between what was noted in MAXIS as support and actual support in the case files for citizenship. Questioned Costs: Not applicable. The County administers the program but benefits to participants in this program are paid by the State of Minnesota. Context: The State of Minnesota contracts with the County's Health and Wellness Financial Assistance Services Department to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the Minnesota Department of Human Services maintains MAXIS, which supports the eligibility determination process and actually pays the benefits to participants. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS and documented verification of key eligibility-determining factors increases the risk that a program participant will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly or was supported and that all required information was obtained and/or retained. Recommendation: We recommend Clay County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists and is properly inputted or updated in MAXIS. View of Responsible Official: Concur

2022-003 Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For three covered transactions tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None Context: A sample of three vendors over the simplified acquisition threshold of $25,000 was tested. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with federal grant requirements. Cause: There was no notation on the invoices informing the employee processing the claims that federal funds were being used. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur

2022-002 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance Severity of Deficiency: Significant Deficiency Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2201MNTANF; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Minnesota Department of Human Services (DHS) maintains the computer system, MAXIS, which is used by Clay County to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • One case file did not have documentation to support a parent relationship, • two case files had differences between documentation supporting asset amounts in the case file and amounts input into MAXIS, and • two case files had differences between what was noted in MAXIS as support and actual support in the case files for citizenship. Questioned Costs: Not applicable. The County administers the program but benefits to participants in this program are paid by the State of Minnesota. Context: The State of Minnesota contracts with the County's Health and Wellness Financial Assistance Services Department to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the Minnesota Department of Human Services maintains MAXIS, which supports the eligibility determination process and actually pays the benefits to participants. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS and documented verification of key eligibility-determining factors increases the risk that a program participant will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly or was supported and that all required information was obtained and/or retained. Recommendation: We recommend Clay County implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists and is properly inputted or updated in MAXIS. View of Responsible Official: Concur

2022-003 Suspension and Debarment Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For three covered transactions tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None Context: A sample of three vendors over the simplified acquisition threshold of $25,000 was tested. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with federal grant requirements. Cause: There was no notation on the invoices informing the employee processing the claims that federal funds were being used. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur