Audit 15785

U.S. Department of Health and Human Services 2023-003 Monitoring of payments to subrecipient Program: COVID-19 Child Care and Development Block Grant - Assistance Listing No. 93.575; Grant No. 2101LACDC6 & COVID-19 Child Care Development – Assistance Listing No. 93.596; Grant No. 2101LACCC5 Grant Period: Year Ended June 30, 2023; Pass-through Entity Name: Louisiana Department of Education Criteria: Federal compliance requirements call for monitoring of subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. It appears that the program has not complied with these requirements. Condition: Audit sample testing identified 2 out of 40 transactions that lacked adequate documentation to support subrecipient reimbursements. This may have resulted in payment of $11,383 in questioned costs. Of this amount, $3,624 is alleged to be a fraudulent invoice submitted by a subrecipient. See finding 2023-002 for additional information. Cause of Condition: It appears that management may not have had adequate controls designed and in place to monitor subrecipient reimbursements. Potential Effect of Condition: The $11,383 is considered questioned costs. Due to the allegation of potential fraud we consider this to be material to the program. Recommendation: Management should consider developing appropriate written policies and procedures to ensure proper monitoring of payments to subrecipients. Management’s Response: We agree with the recommendations and will make necessary changes to policies and procedures.

U.S. Department of Health and Human Services 2023-003 Monitoring of payments to subrecipient Program: COVID-19 Child Care and Development Block Grant - Assistance Listing No. 93.575; Grant No. 2101LACDC6 & COVID-19 Child Care Development – Assistance Listing No. 93.596; Grant No. 2101LACCC5 Grant Period: Year Ended June 30, 2023; Pass-through Entity Name: Louisiana Department of Education Criteria: Federal compliance requirements call for monitoring of subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. It appears that the program has not complied with these requirements. Condition: Audit sample testing identified 2 out of 40 transactions that lacked adequate documentation to support subrecipient reimbursements. This may have resulted in payment of $11,383 in questioned costs. Of this amount, $3,624 is alleged to be a fraudulent invoice submitted by a subrecipient. See finding 2023-002 for additional information. Cause of Condition: It appears that management may not have had adequate controls designed and in place to monitor subrecipient reimbursements. Potential Effect of Condition: The $11,383 is considered questioned costs. Due to the allegation of potential fraud we consider this to be material to the program. Recommendation: Management should consider developing appropriate written policies and procedures to ensure proper monitoring of payments to subrecipients. Management’s Response: We agree with the recommendations and will make necessary changes to policies and procedures.

U.S. Department of Health and Human Services 2023-003 Monitoring of payments to subrecipient Program: COVID-19 Child Care and Development Block Grant - Assistance Listing No. 93.575; Grant No. 2101LACDC6 & COVID-19 Child Care Development – Assistance Listing No. 93.596; Grant No. 2101LACCC5 Grant Period: Year Ended June 30, 2023; Pass-through Entity Name: Louisiana Department of Education Criteria: Federal compliance requirements call for monitoring of subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. It appears that the program has not complied with these requirements. Condition: Audit sample testing identified 2 out of 40 transactions that lacked adequate documentation to support subrecipient reimbursements. This may have resulted in payment of $11,383 in questioned costs. Of this amount, $3,624 is alleged to be a fraudulent invoice submitted by a subrecipient. See finding 2023-002 for additional information. Cause of Condition: It appears that management may not have had adequate controls designed and in place to monitor subrecipient reimbursements. Potential Effect of Condition: The $11,383 is considered questioned costs. Due to the allegation of potential fraud we consider this to be material to the program. Recommendation: Management should consider developing appropriate written policies and procedures to ensure proper monitoring of payments to subrecipients. Management’s Response: We agree with the recommendations and will make necessary changes to policies and procedures.

U.S. Department of Health and Human Services 2023-003 Monitoring of payments to subrecipient Program: COVID-19 Child Care and Development Block Grant - Assistance Listing No. 93.575; Grant No. 2101LACDC6 & COVID-19 Child Care Development – Assistance Listing No. 93.596; Grant No. 2101LACCC5 Grant Period: Year Ended June 30, 2023; Pass-through Entity Name: Louisiana Department of Education Criteria: Federal compliance requirements call for monitoring of subrecipients to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. It appears that the program has not complied with these requirements. Condition: Audit sample testing identified 2 out of 40 transactions that lacked adequate documentation to support subrecipient reimbursements. This may have resulted in payment of $11,383 in questioned costs. Of this amount, $3,624 is alleged to be a fraudulent invoice submitted by a subrecipient. See finding 2023-002 for additional information. Cause of Condition: It appears that management may not have had adequate controls designed and in place to monitor subrecipient reimbursements. Potential Effect of Condition: The $11,383 is considered questioned costs. Due to the allegation of potential fraud we consider this to be material to the program. Recommendation: Management should consider developing appropriate written policies and procedures to ensure proper monitoring of payments to subrecipients. Management’s Response: We agree with the recommendations and will make necessary changes to policies and procedures.