REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
ALLOW ABLE COSTS Significant Deficiency Immaterial Noncompliance 2022-027 Strengthen Controls to Ensure Compliance with Allowable Costs Reguirements of the Child and Adult Care Food Program (CACFP). ALN Number 10.558 Child and Adult Care Food Program Federal Award No. All Current Active Grants Federal Agency United State Department of Agriculture Pass-through Entity NI A Questioned Costs $6,027 Criteria The Code of Federal Regulations (7 CFR 226.15(e)) states, each institution shall establish procedures to collect and maintain all program records required under this part, as well as any records required by the State agency. Failure to maintain such records shall be grounds for the denial of reimbursement for meals served during the period covered by the records in question and for the denial of reimbursement for costs associated with such records. At a minimum, the following records shall be collected and maintained: ? Documentation of the enrollment of each participant at centers and child at day care homes. Such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. ? Daily records indicating the number of participants in attendance and the daily meal counts, by type (breakfast, lunch, supper, and snacks), served to family day care home participants, or the time of service meal counts, by type (breakfast, lunch, supper, and snacks), served to center participants. ? Copies of invoices, receipts, or other records required by the State agency financial management instruction to document: Administrative costs claimed by the institution; Operating costs claimed by the institution except sponsoring organizations of day care homes; and Income to the Program. Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Participants eligible for free or reduced priced meals enrolling after July 1, must have meal applications completed before the end of the month. The category of each participant, as stated on the meal application, is recorded on the Master Roster. Failure to have a complete meal application on file for each enrolled participant will result in the disallowance of meals and repayment of Program funds .... It is the responsibility of the center staff to review and categorize the application as free, reduced, or denied/paid. The staff must sign and date the application in the "official use only" section." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "The United States Department of Agriculture (USDA) issues CACFP reimbursement for organizations based on three categories: free, reduced price and paid. To qualify for the free or reduced-price categories, a family must meet the income level and household size specified on the Income Eligibility Guidelines." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Attendance records verify that participants claimed were actually present. An individual record of each participant's attendance (days present and absent) must be recorded each day . . . . Failure to complete and document attendance will result in the disallowance of meals and the repayment of Program Funds. Claiming meals more than documented in attendance will result in the designation of your organization as seriously deficient." The Mississippi Department of Education CACFP: Participant Guide states, "Meal count and attendance records must indicate that meal count totals are never HIGHER than attendance totals." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states "Program operators are required to track an organization's spending and provide a Balance on Hand of CACFP funds independently of other center funds. The State Agency highly recommends opening a separate Checking Account for the tracking of CACFP funds .... No payments may be made for expenses not directly related to operation of the CACFP. Any payments of this nature will be disallowed, and the organization will be required to repay all such expenditures." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Failure to abide by the staffing pattern with the specific staff listed for salaries/wages/benefits will result in the designation of costs as unallowable and the repayment of Program funds." Mississippi Department of Education Office of Child Nutrition Recordkeeping Manual for the Child and Adult Care Food Program (CACFP) states, "All program records and documentation will be maintained for three years plus the current year." Condition During testwork performed for Activities Allowed and Unallowed & Allowable Costs for CACFP grants for the 2021-2022 year, the auditor noted the following exceptions: ? 29 instances in which documentation for the Free/Reduced Meal Application was not provided or was not completed correctly, resulting in $2,292 of questioned costs. ? 16 instances in which meal category claimed did not agree to the participant's eligible meal category based on the Free/Reduced Meal Application, resulting in $2,506 of questioned costs. ? 5 instances in which the meals claimed exceeded the attendance on the sign in/out data, resulting in $423 of questioned costs. ? One instance in which salaries paid with CACFP funds exceeded the allowable staffing pattern, resulting in $806 of questioned costs. Cause MDE did not monitor subreceipients properly and ensure that subreceipients are maintaining required supporting documentation as required by written policies and procedures. Effect Failure to not properly monitor subreceipients and ensure required supporting documentation is maintained could result in questioned costs and loss of funding. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with allowable costs requirements of the Child and Adult Care Food Program (CACFP). Repeat Finding Yes; 2021-034 Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
SPECIAL TESTS - OVERPAYMENTS Material Weakness Material Noncompliance 2022-020 Strengthen Controls to Ensure Compliance with Special Tests - Program Integrity-Overpayments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity N/ A Questioned Costs $25,470 Criteria As stated in the Attachment I to UIPL No. 16-20 Change I, Pandemic Unemployment Assistance (PUA) payments must be reduced to recover overpayments for other states if the state has signed the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA) agreement. However, the state may not offset more than 50 percent from the PUA payment to recover overpayments for other programs. As stated in the Attachment I to UIPL No. 17-20, Change I, The state may not offset more than 50 percent from the Pandemic Emergency Unemployment Compensation (PEUC) payment to recover an overpayment. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate agencies should correctly program systems to comply with federal guidelines. Condition During testing performed on overpayments, the auditor noted that the Mississippi Department of Employment Security had incorrect offset percentages setup in ReEmploy MS to recover overpayments. The agency was incorrectly recovering overpayments by offsetting PUA and PEUC with other benefit programs. Specifically the agency used: ? PUA benefit payments to offset 100% of overpayments that occurred from Mixed Earners Unemployment Compensation program (MEUC) and Federal Pandemic Unemployment Compensation (FPUC) benefits. Total known questioned costs relative to PUA benefit offsets is $10,735. ? PEUC benefit payments to offset 100% of overpayments that occurred from PUA, MEUC, FPUC, Regular Unemployment Insurance, and Extended Benefit overpayments. Total known questioned costs relative to PEUC benefit offsets is $14,735. Cause The agency has determined that the UIPLs issued by the Department of Labor (DOL) are not sufficient in altering the understanding MOES has for the CARES Act regulations. MDES does not believe that updating policies and procedures to follow the guidance issued by DOL is required if it is contradictory to their understanding of the CARES Act regulations. Effect The claimant may not receive the appropriate amount of PUA and PEUC benefits if the agency uses incorrect offset percentages to recover overpayments from the previously mentioned unemployment programs. Recommendation We recommended the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - program integrityoverpayments requirements for unemployment insurance. Repeat Finding Yes, 2021-025. Statistically Valid Yes
MATCHING, LEVEL OF EFFORT, EARMARKING Material Weakness Material Noncompliance 2022-021 Strengthen Controls to Ensure Compliance with Matching Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs $1,248 Criteria Per the Department of Labor's Unemployment Insurance Program Letter No. 18- 20, amount of Funds Transferred from FUA (Section 903(i)(l )(B), SSA) ( 42 U.S.C. ? 1103(i)(I)(B)). Section 2103(b) of the CARES Act amended the Social Security Act (SSA) by adding a new subsection 903(i), SSA (42 U.S.C. ? 1103(i)). Section 903(i)(l)(B), SSA (42 U.S.C. ? 1103(i)(l)(B) authorizes transfers from the Federal Unemployment Account (FUA) to a state's account in the unemployment trust fund for one-half of the amount of compensation paid by the state to employees of state and local governmental entities, certain nonprofit organizations, and Federally-recognized Indian tribes that opt to make payments in lieu of contributions (i.e., reimbursing employers). Important Program Dates. These partial reimbursements apply to all payments made in lieu of contributions for weeks of unemployment beginning on or after March 13, 2020 and ending on or before December 31, 2020, even if the unemployed individual is not unemployed as a result of COVID-19. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate an agency should appropriately update program rules to meet federal program guidelines. Condition During review of matching contributions and extended benefits in relation to unemployment insurance, it was noted that the Mississippi Department of Employment Security (MDES) treated all extended benefits claims as fully federally funded. Per discussion with MDES personnel, the agency specifically stated that they inadvertently programmed all employer accounts to qualify for federal sharing to extended benefits. This allowed local and state government entities and federally recognized Indian Tribes to qualify for extended benefits, however amounts over one-half of the amount of compensation paid by the state to employees of state and local governmental entities and federally recognized Indian Tribes were prohibited per federal guidelines. The auditor reviewed a listing of local and state government entities and federally recognized Indian tribes that received extended benefits and specifically verified that five of these entities did in fact receive extended benefits that should have been prohibited. The auditor verified that the total of benefits paid to these excluded entities amounted to $1,248. Cause MDES inadvertently programmed all employer accounts to qualify for federal sharing of extended benefits including the local and state government entities and federally recognized Indian Tribes. Effect Extended benefit costs attributable to employment with state and local governments or federally recognized Indian tribes were fully funded with Federal dollars. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with matching requirements for unemployment msurance. Repeat Finding Yes, 2021-022. Statistically Valid Yes.
REPORTING Material Weakness Immaterial Noncompliance 2022-022 Strengthen Controls to Ensure Compliance with Reporting Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations 2 CFR 200.302 states each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that proper review and approval procedures should be in place to ensure accuracy and reliability of reports submitted by the agency. Condition During review ofrequired monthly reports for ETA-9050, ETA-9052, and ETA- 9055, there was no evidence of written supervisory approval for the reports submitted. The auditor reviewed four monthly reports, twelve in total, for each of the previously mentioned reports. The agency could not provide support to the auditors due to this report being system generated from ReEmploy. Due to a lack of evidence of review and support, the auditor is unable to determine accuracy within the performance review reports. Cause The Mississippi Department of Employment Security lacks adequate review procedures and proper internal controls over reporting requirements. Effect Without proper review and approval, reports could be inaccurate and incomplete. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with reporting requirements for unemployment insurance. Repeat Finding Yes, 2021-026. Statistically Valid No.
SPECIAL TESTS - BENEFIT PAYMENTS Significant Deficiency 2022-024 Strengthen Controls to Ensure Compliance with Special Tests - Benefit Payments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria As stated in the Employment and Training Handbook No. 395, 5th Edition: Section 13: Completion of Cases and Timely Data Entry, "A case is complete when the investigation has been concluded as required, all official actions for the Key Week ( except appeals) have been completed, the supervisor has signed off, and the results have been entered into the computer." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that agencies should appropriately sign and review benefit investigations. Condition During testing performed for Benefit Payments, the auditor noted that there were two instances out of fifty in which Benefit Accuracy Measurement (BAM) cases reviewed were not signed demonstrating evidence of supervisory/investigator review. Cause Due to lack of staffing, agency personnel failed to follow policies and procedures in regards to completing benefit accuracy measurement investigations. Effect Failure to complete and review of investigations may result in the integrity of the information being collected and recorded to be compromised. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - benefit payments requirements for unemployment insurance. Repeat Finding No. Statistically Valid Yes.
SPECIAL TESTS - OVERPAYMENTS Material Weakness Material Noncompliance 2022-020 Strengthen Controls to Ensure Compliance with Special Tests - Program Integrity-Overpayments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity N/ A Questioned Costs $25,470 Criteria As stated in the Attachment I to UIPL No. 16-20 Change I, Pandemic Unemployment Assistance (PUA) payments must be reduced to recover overpayments for other states if the state has signed the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA) agreement. However, the state may not offset more than 50 percent from the PUA payment to recover overpayments for other programs. As stated in the Attachment I to UIPL No. 17-20, Change I, The state may not offset more than 50 percent from the Pandemic Emergency Unemployment Compensation (PEUC) payment to recover an overpayment. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate agencies should correctly program systems to comply with federal guidelines. Condition During testing performed on overpayments, the auditor noted that the Mississippi Department of Employment Security had incorrect offset percentages setup in ReEmploy MS to recover overpayments. The agency was incorrectly recovering overpayments by offsetting PUA and PEUC with other benefit programs. Specifically the agency used: ? PUA benefit payments to offset 100% of overpayments that occurred from Mixed Earners Unemployment Compensation program (MEUC) and Federal Pandemic Unemployment Compensation (FPUC) benefits. Total known questioned costs relative to PUA benefit offsets is $10,735. ? PEUC benefit payments to offset 100% of overpayments that occurred from PUA, MEUC, FPUC, Regular Unemployment Insurance, and Extended Benefit overpayments. Total known questioned costs relative to PEUC benefit offsets is $14,735. Cause The agency has determined that the UIPLs issued by the Department of Labor (DOL) are not sufficient in altering the understanding MOES has for the CARES Act regulations. MDES does not believe that updating policies and procedures to follow the guidance issued by DOL is required if it is contradictory to their understanding of the CARES Act regulations. Effect The claimant may not receive the appropriate amount of PUA and PEUC benefits if the agency uses incorrect offset percentages to recover overpayments from the previously mentioned unemployment programs. Recommendation We recommended the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - program integrityoverpayments requirements for unemployment insurance. Repeat Finding Yes, 2021-025. Statistically Valid Yes
MATCHING, LEVEL OF EFFORT, EARMARKING Material Weakness Material Noncompliance 2022-021 Strengthen Controls to Ensure Compliance with Matching Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs $1,248 Criteria Per the Department of Labor's Unemployment Insurance Program Letter No. 18- 20, amount of Funds Transferred from FUA (Section 903(i)(l )(B), SSA) ( 42 U.S.C. ? 1103(i)(I)(B)). Section 2103(b) of the CARES Act amended the Social Security Act (SSA) by adding a new subsection 903(i), SSA (42 U.S.C. ? 1103(i)). Section 903(i)(l)(B), SSA (42 U.S.C. ? 1103(i)(l)(B) authorizes transfers from the Federal Unemployment Account (FUA) to a state's account in the unemployment trust fund for one-half of the amount of compensation paid by the state to employees of state and local governmental entities, certain nonprofit organizations, and Federally-recognized Indian tribes that opt to make payments in lieu of contributions (i.e., reimbursing employers). Important Program Dates. These partial reimbursements apply to all payments made in lieu of contributions for weeks of unemployment beginning on or after March 13, 2020 and ending on or before December 31, 2020, even if the unemployed individual is not unemployed as a result of COVID-19. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate an agency should appropriately update program rules to meet federal program guidelines. Condition During review of matching contributions and extended benefits in relation to unemployment insurance, it was noted that the Mississippi Department of Employment Security (MDES) treated all extended benefits claims as fully federally funded. Per discussion with MDES personnel, the agency specifically stated that they inadvertently programmed all employer accounts to qualify for federal sharing to extended benefits. This allowed local and state government entities and federally recognized Indian Tribes to qualify for extended benefits, however amounts over one-half of the amount of compensation paid by the state to employees of state and local governmental entities and federally recognized Indian Tribes were prohibited per federal guidelines. The auditor reviewed a listing of local and state government entities and federally recognized Indian tribes that received extended benefits and specifically verified that five of these entities did in fact receive extended benefits that should have been prohibited. The auditor verified that the total of benefits paid to these excluded entities amounted to $1,248. Cause MDES inadvertently programmed all employer accounts to qualify for federal sharing of extended benefits including the local and state government entities and federally recognized Indian Tribes. Effect Extended benefit costs attributable to employment with state and local governments or federally recognized Indian tribes were fully funded with Federal dollars. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with matching requirements for unemployment msurance. Repeat Finding Yes, 2021-022. Statistically Valid Yes.
REPORTING Material Weakness Immaterial Noncompliance 2022-022 Strengthen Controls to Ensure Compliance with Reporting Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations 2 CFR 200.302 states each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that proper review and approval procedures should be in place to ensure accuracy and reliability of reports submitted by the agency. Condition During review ofrequired monthly reports for ETA-9050, ETA-9052, and ETA- 9055, there was no evidence of written supervisory approval for the reports submitted. The auditor reviewed four monthly reports, twelve in total, for each of the previously mentioned reports. The agency could not provide support to the auditors due to this report being system generated from ReEmploy. Due to a lack of evidence of review and support, the auditor is unable to determine accuracy within the performance review reports. Cause The Mississippi Department of Employment Security lacks adequate review procedures and proper internal controls over reporting requirements. Effect Without proper review and approval, reports could be inaccurate and incomplete. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with reporting requirements for unemployment insurance. Repeat Finding Yes, 2021-026. Statistically Valid No.
SPECIAL TESTS - BENEFIT PAYMENTS Significant Deficiency 2022-024 Strengthen Controls to Ensure Compliance with Special Tests - Benefit Payments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria As stated in the Employment and Training Handbook No. 395, 5th Edition: Section 13: Completion of Cases and Timely Data Entry, "A case is complete when the investigation has been concluded as required, all official actions for the Key Week ( except appeals) have been completed, the supervisor has signed off, and the results have been entered into the computer." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that agencies should appropriately sign and review benefit investigations. Condition During testing performed for Benefit Payments, the auditor noted that there were two instances out of fifty in which Benefit Accuracy Measurement (BAM) cases reviewed were not signed demonstrating evidence of supervisory/investigator review. Cause Due to lack of staffing, agency personnel failed to follow policies and procedures in regards to completing benefit accuracy measurement investigations. Effect Failure to complete and review of investigations may result in the integrity of the information being collected and recorded to be compromised. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - benefit payments requirements for unemployment insurance. Repeat Finding No. Statistically Valid Yes.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-031 Strengthen Controls to Ensure Compliance with Eligibility Requirements for the Emergency Rental Assistance Program. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) Federal Award No. NIA Federal Agency Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.303(a)) states that the Non-federal entity should establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee Sponsoring Organizations of the Treadway Commission (COSO). Frequently Asked Questions (FAQ's) as guidance regarding the requirements of the Emergency Rental Assistance program (ERAJ) established by section 501 of Division N of the Consolidated Appropriation Act, 2021, Pub. L. No. 116-260 (December 27, 2020) and the Emergency Rental Assistance Program (ERA2) established by section 3201 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (March 11, 2021) states that grantees must require all applications for assistance to include an attestation from the applicant household that all information included is correct and complete. In all cases, grantees must document their policies and procedures for determining household eligibility to include policies and procedures for determining the prioritization of households in compliance with the statute and maintain records of their determinations. Grantees must also have controls in place to ensure compliance with their policies and procedures and prevent fraud. Condition The Department of Finance and Administration (DF A) did not review and assess procedures over eligibility determination to prevent fraudulent applications from being approved and funds disbursed. DF A's third-party administrator, Mississippi Home Corporation (MHC), fiscal year 2022 single audit report identified a finding related to the approval of fraudulent applications due to the self-attestation process. DF A did not implement nor ensure that corrective action was implemented to mitigate the fraud from reoccurring. Cause DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. Repeat Finding No. Statistically Valid No.
MONITORING DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. No. No. Material Weakness Material Noncompliance 2022-032 Strengthen Controls to Ensure Compliance with Federal Monitoring Requirements. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) 21.026 COVID-19 Homeowners Assistance Fund (HOF) Federal Award No. NIA Federal Agency U.S. Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.400) requires the non-federal entity: ? To be responsible for the efficient and effective administration of the Federal award through the application of sound management practices. ? Assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. ? Ensure the cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during the review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. Code of Federal Regulations (2 CFR 200.303) requires the Non-federal entity: ? Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ? Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and terms and conditions of Federal awards. Condition The Department of Finance and Administration (DF A) passed federal funds to a third-party administrator, Mississippi Home Corporation (MHC) but did not document this subrecipient relationship via a subaward agreement, nor did DF A monitor and support MHC as a subrecipient. MHC is a quasi-governmental agency and not part of the State of Mississippi's financial reporting structure. Therefore, due to lack of support of the subrecipient relationship, we the deemed the programs to be administered by DF A. During testing we noted that DF A did not assume responsibility for the administration of the federal award as required by 2 CFR 200.400, nor did they establish and maintain effective internal controls over the federal award as required by 2 CFR 200.303. DFA did not document their review and approval of program costs which included payroll cost charged to the program based on a billing methodology used for program cost charged to U.S. Department of Housing and Urban Development (HUD) housing counseling grants. There was no evidence of DFA's review and approval over eligibility determined by the MHC or financial and programmatic reports prepared by MHC. Cause The Mississippi Department of Finance and Administration (DF A) does not consider Mississippi Home Corporation as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring there is an increased risk of charging unallowed costs and activity to the program and noncompliance with direct and material compliance requirements. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with monitoring processes in order to ensure federal compliance requirements are being met. Repeat Finding Yes; 2021-032. Statistically Valid N/A.
MONITORING DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. No. No. Material Weakness Material Noncompliance 2022-032 Strengthen Controls to Ensure Compliance with Federal Monitoring Requirements. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) 21.026 COVID-19 Homeowners Assistance Fund (HOF) Federal Award No. NIA Federal Agency U.S. Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.400) requires the non-federal entity: ? To be responsible for the efficient and effective administration of the Federal award through the application of sound management practices. ? Assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. ? Ensure the cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during the review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. Code of Federal Regulations (2 CFR 200.303) requires the Non-federal entity: ? Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ? Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and terms and conditions of Federal awards. Condition The Department of Finance and Administration (DF A) passed federal funds to a third-party administrator, Mississippi Home Corporation (MHC) but did not document this subrecipient relationship via a subaward agreement, nor did DF A monitor and support MHC as a subrecipient. MHC is a quasi-governmental agency and not part of the State of Mississippi's financial reporting structure. Therefore, due to lack of support of the subrecipient relationship, we the deemed the programs to be administered by DF A. During testing we noted that DF A did not assume responsibility for the administration of the federal award as required by 2 CFR 200.400, nor did they establish and maintain effective internal controls over the federal award as required by 2 CFR 200.303. DFA did not document their review and approval of program costs which included payroll cost charged to the program based on a billing methodology used for program cost charged to U.S. Department of Housing and Urban Development (HUD) housing counseling grants. There was no evidence of DFA's review and approval over eligibility determined by the MHC or financial and programmatic reports prepared by MHC. Cause The Mississippi Department of Finance and Administration (DF A) does not consider Mississippi Home Corporation as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring there is an increased risk of charging unallowed costs and activity to the program and noncompliance with direct and material compliance requirements. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with monitoring processes in order to ensure federal compliance requirements are being met. Repeat Finding Yes; 2021-032. Statistically Valid N/A.
MISSISSIPPI VETERANS AFFAIRS REPORTING Material Weakness Material Noncompliance 2022-033 Strengthen Controls Over the Preparation, Recording, and Review of the Schedule of Expenditures of Federal Awards. ALN Number 64.015 Veterans State Nursing Home Care Federal Award No. N/A Pass-through Entity N/A Questioned Costs N/A Criteria The Code of Federal Regulations (2 cfr ?200.510(b)) states, in part ?the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ?200.502.? Code of Federal Regulations (2 cfr ?200.502(a)) states, in part, ?the determination of when a federal award is expended must be based on when the activity related to the Federal award occurs.? The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of financial and federal information reported on such schedule to verify the accuracy and completeness of financial information reported. The Mississippi Agency Accounting Policies and Procedures (MAAPP) manual Section 27.30.60 states, ?The Federal Grant Activity schedule supports amounts reported on the GAAP packet for federal grant revenues, receivables, deferred revenues and expenditures. The schedule is also used for preparing the Single Audit Report required by the Single Audit Act, Office of Management and Budget Uniform Grant Guidance and the State?s audit requirements. The amounts on this schedule should be reconciled by the agency with amounts reported on federal financial reports.? Condition The Department failed to report all federal program expenditures on its Schedule of Expenditures of Federal Awards (SEFA). During the audit for the statewide ACFR, the auditors noted that the SEFA from the Department was incomplete and did not contain the federal expenditures for ALN #64.015. Cause Management at MSVA is relatively new and did not realize the federal monies received required the agency to prepare a SEFA. Effect The Department is not compliant with the federal and State report requirements for federal expenditures. Inaccurate reporting of federal program expenditures may result in unreliable and inaccurate reporting to the state and federal oversight organizations, as well materially affect the State?s risk assessment over major federal programs. Recommendation We recommend that the Department review and enhance procedures over accounting for and reporting federal program expenditure activity. The Departments enhancement to the procedures should strengthen internal controls over the preparation and review of the SEFA to ensure that all grant award information and related expenditures are complete and accurate. Repeat Finding Yes; 2021-051, 2020-040. Statistically Valid N/A
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
ALLOW ABLE COSTS Significant Deficiency Immaterial Noncompliance 2022-027 Strengthen Controls to Ensure Compliance with Allowable Costs Reguirements of the Child and Adult Care Food Program (CACFP). ALN Number 10.558 Child and Adult Care Food Program Federal Award No. All Current Active Grants Federal Agency United State Department of Agriculture Pass-through Entity NI A Questioned Costs $6,027 Criteria The Code of Federal Regulations (7 CFR 226.15(e)) states, each institution shall establish procedures to collect and maintain all program records required under this part, as well as any records required by the State agency. Failure to maintain such records shall be grounds for the denial of reimbursement for meals served during the period covered by the records in question and for the denial of reimbursement for costs associated with such records. At a minimum, the following records shall be collected and maintained: ? Documentation of the enrollment of each participant at centers and child at day care homes. Such documentation of enrollment must be updated annually, signed by a parent or legal guardian, and include information on each child's normal days and hours of care and the meals normally received while in care. ? Daily records indicating the number of participants in attendance and the daily meal counts, by type (breakfast, lunch, supper, and snacks), served to family day care home participants, or the time of service meal counts, by type (breakfast, lunch, supper, and snacks), served to center participants. ? Copies of invoices, receipts, or other records required by the State agency financial management instruction to document: Administrative costs claimed by the institution; Operating costs claimed by the institution except sponsoring organizations of day care homes; and Income to the Program. Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Participants eligible for free or reduced priced meals enrolling after July 1, must have meal applications completed before the end of the month. The category of each participant, as stated on the meal application, is recorded on the Master Roster. Failure to have a complete meal application on file for each enrolled participant will result in the disallowance of meals and repayment of Program funds .... It is the responsibility of the center staff to review and categorize the application as free, reduced, or denied/paid. The staff must sign and date the application in the "official use only" section." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "The United States Department of Agriculture (USDA) issues CACFP reimbursement for organizations based on three categories: free, reduced price and paid. To qualify for the free or reduced-price categories, a family must meet the income level and household size specified on the Income Eligibility Guidelines." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Attendance records verify that participants claimed were actually present. An individual record of each participant's attendance (days present and absent) must be recorded each day . . . . Failure to complete and document attendance will result in the disallowance of meals and the repayment of Program Funds. Claiming meals more than documented in attendance will result in the designation of your organization as seriously deficient." The Mississippi Department of Education CACFP: Participant Guide states, "Meal count and attendance records must indicate that meal count totals are never HIGHER than attendance totals." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states "Program operators are required to track an organization's spending and provide a Balance on Hand of CACFP funds independently of other center funds. The State Agency highly recommends opening a separate Checking Account for the tracking of CACFP funds .... No payments may be made for expenses not directly related to operation of the CACFP. Any payments of this nature will be disallowed, and the organization will be required to repay all such expenditures." Mississippi Department of Education Office of Child Nutrition: Recordkeeping Manual for the Child and Adult Care Food Program states, "Failure to abide by the staffing pattern with the specific staff listed for salaries/wages/benefits will result in the designation of costs as unallowable and the repayment of Program funds." Mississippi Department of Education Office of Child Nutrition Recordkeeping Manual for the Child and Adult Care Food Program (CACFP) states, "All program records and documentation will be maintained for three years plus the current year." Condition During testwork performed for Activities Allowed and Unallowed & Allowable Costs for CACFP grants for the 2021-2022 year, the auditor noted the following exceptions: ? 29 instances in which documentation for the Free/Reduced Meal Application was not provided or was not completed correctly, resulting in $2,292 of questioned costs. ? 16 instances in which meal category claimed did not agree to the participant's eligible meal category based on the Free/Reduced Meal Application, resulting in $2,506 of questioned costs. ? 5 instances in which the meals claimed exceeded the attendance on the sign in/out data, resulting in $423 of questioned costs. ? One instance in which salaries paid with CACFP funds exceeded the allowable staffing pattern, resulting in $806 of questioned costs. Cause MDE did not monitor subreceipients properly and ensure that subreceipients are maintaining required supporting documentation as required by written policies and procedures. Effect Failure to not properly monitor subreceipients and ensure required supporting documentation is maintained could result in questioned costs and loss of funding. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with allowable costs requirements of the Child and Adult Care Food Program (CACFP). Repeat Finding Yes; 2021-034 Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
SPECIAL TESTS - OVERPAYMENTS Material Weakness Material Noncompliance 2022-020 Strengthen Controls to Ensure Compliance with Special Tests - Program Integrity-Overpayments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity N/ A Questioned Costs $25,470 Criteria As stated in the Attachment I to UIPL No. 16-20 Change I, Pandemic Unemployment Assistance (PUA) payments must be reduced to recover overpayments for other states if the state has signed the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA) agreement. However, the state may not offset more than 50 percent from the PUA payment to recover overpayments for other programs. As stated in the Attachment I to UIPL No. 17-20, Change I, The state may not offset more than 50 percent from the Pandemic Emergency Unemployment Compensation (PEUC) payment to recover an overpayment. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate agencies should correctly program systems to comply with federal guidelines. Condition During testing performed on overpayments, the auditor noted that the Mississippi Department of Employment Security had incorrect offset percentages setup in ReEmploy MS to recover overpayments. The agency was incorrectly recovering overpayments by offsetting PUA and PEUC with other benefit programs. Specifically the agency used: ? PUA benefit payments to offset 100% of overpayments that occurred from Mixed Earners Unemployment Compensation program (MEUC) and Federal Pandemic Unemployment Compensation (FPUC) benefits. Total known questioned costs relative to PUA benefit offsets is $10,735. ? PEUC benefit payments to offset 100% of overpayments that occurred from PUA, MEUC, FPUC, Regular Unemployment Insurance, and Extended Benefit overpayments. Total known questioned costs relative to PEUC benefit offsets is $14,735. Cause The agency has determined that the UIPLs issued by the Department of Labor (DOL) are not sufficient in altering the understanding MOES has for the CARES Act regulations. MDES does not believe that updating policies and procedures to follow the guidance issued by DOL is required if it is contradictory to their understanding of the CARES Act regulations. Effect The claimant may not receive the appropriate amount of PUA and PEUC benefits if the agency uses incorrect offset percentages to recover overpayments from the previously mentioned unemployment programs. Recommendation We recommended the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - program integrityoverpayments requirements for unemployment insurance. Repeat Finding Yes, 2021-025. Statistically Valid Yes
MATCHING, LEVEL OF EFFORT, EARMARKING Material Weakness Material Noncompliance 2022-021 Strengthen Controls to Ensure Compliance with Matching Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs $1,248 Criteria Per the Department of Labor's Unemployment Insurance Program Letter No. 18- 20, amount of Funds Transferred from FUA (Section 903(i)(l )(B), SSA) ( 42 U.S.C. ? 1103(i)(I)(B)). Section 2103(b) of the CARES Act amended the Social Security Act (SSA) by adding a new subsection 903(i), SSA (42 U.S.C. ? 1103(i)). Section 903(i)(l)(B), SSA (42 U.S.C. ? 1103(i)(l)(B) authorizes transfers from the Federal Unemployment Account (FUA) to a state's account in the unemployment trust fund for one-half of the amount of compensation paid by the state to employees of state and local governmental entities, certain nonprofit organizations, and Federally-recognized Indian tribes that opt to make payments in lieu of contributions (i.e., reimbursing employers). Important Program Dates. These partial reimbursements apply to all payments made in lieu of contributions for weeks of unemployment beginning on or after March 13, 2020 and ending on or before December 31, 2020, even if the unemployed individual is not unemployed as a result of COVID-19. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate an agency should appropriately update program rules to meet federal program guidelines. Condition During review of matching contributions and extended benefits in relation to unemployment insurance, it was noted that the Mississippi Department of Employment Security (MDES) treated all extended benefits claims as fully federally funded. Per discussion with MDES personnel, the agency specifically stated that they inadvertently programmed all employer accounts to qualify for federal sharing to extended benefits. This allowed local and state government entities and federally recognized Indian Tribes to qualify for extended benefits, however amounts over one-half of the amount of compensation paid by the state to employees of state and local governmental entities and federally recognized Indian Tribes were prohibited per federal guidelines. The auditor reviewed a listing of local and state government entities and federally recognized Indian tribes that received extended benefits and specifically verified that five of these entities did in fact receive extended benefits that should have been prohibited. The auditor verified that the total of benefits paid to these excluded entities amounted to $1,248. Cause MDES inadvertently programmed all employer accounts to qualify for federal sharing of extended benefits including the local and state government entities and federally recognized Indian Tribes. Effect Extended benefit costs attributable to employment with state and local governments or federally recognized Indian tribes were fully funded with Federal dollars. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with matching requirements for unemployment msurance. Repeat Finding Yes, 2021-022. Statistically Valid Yes.
REPORTING Material Weakness Immaterial Noncompliance 2022-022 Strengthen Controls to Ensure Compliance with Reporting Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations 2 CFR 200.302 states each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that proper review and approval procedures should be in place to ensure accuracy and reliability of reports submitted by the agency. Condition During review ofrequired monthly reports for ETA-9050, ETA-9052, and ETA- 9055, there was no evidence of written supervisory approval for the reports submitted. The auditor reviewed four monthly reports, twelve in total, for each of the previously mentioned reports. The agency could not provide support to the auditors due to this report being system generated from ReEmploy. Due to a lack of evidence of review and support, the auditor is unable to determine accuracy within the performance review reports. Cause The Mississippi Department of Employment Security lacks adequate review procedures and proper internal controls over reporting requirements. Effect Without proper review and approval, reports could be inaccurate and incomplete. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with reporting requirements for unemployment insurance. Repeat Finding Yes, 2021-026. Statistically Valid No.
SPECIAL TESTS - BENEFIT PAYMENTS Significant Deficiency 2022-024 Strengthen Controls to Ensure Compliance with Special Tests - Benefit Payments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria As stated in the Employment and Training Handbook No. 395, 5th Edition: Section 13: Completion of Cases and Timely Data Entry, "A case is complete when the investigation has been concluded as required, all official actions for the Key Week ( except appeals) have been completed, the supervisor has signed off, and the results have been entered into the computer." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that agencies should appropriately sign and review benefit investigations. Condition During testing performed for Benefit Payments, the auditor noted that there were two instances out of fifty in which Benefit Accuracy Measurement (BAM) cases reviewed were not signed demonstrating evidence of supervisory/investigator review. Cause Due to lack of staffing, agency personnel failed to follow policies and procedures in regards to completing benefit accuracy measurement investigations. Effect Failure to complete and review of investigations may result in the integrity of the information being collected and recorded to be compromised. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - benefit payments requirements for unemployment insurance. Repeat Finding No. Statistically Valid Yes.
SPECIAL TESTS - OVERPAYMENTS Material Weakness Material Noncompliance 2022-020 Strengthen Controls to Ensure Compliance with Special Tests - Program Integrity-Overpayments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity N/ A Questioned Costs $25,470 Criteria As stated in the Attachment I to UIPL No. 16-20 Change I, Pandemic Unemployment Assistance (PUA) payments must be reduced to recover overpayments for other states if the state has signed the Interstate Reciprocal Overpayment Recovery Arrangement (IRORA) agreement. However, the state may not offset more than 50 percent from the PUA payment to recover overpayments for other programs. As stated in the Attachment I to UIPL No. 17-20, Change I, The state may not offset more than 50 percent from the Pandemic Emergency Unemployment Compensation (PEUC) payment to recover an overpayment. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate agencies should correctly program systems to comply with federal guidelines. Condition During testing performed on overpayments, the auditor noted that the Mississippi Department of Employment Security had incorrect offset percentages setup in ReEmploy MS to recover overpayments. The agency was incorrectly recovering overpayments by offsetting PUA and PEUC with other benefit programs. Specifically the agency used: ? PUA benefit payments to offset 100% of overpayments that occurred from Mixed Earners Unemployment Compensation program (MEUC) and Federal Pandemic Unemployment Compensation (FPUC) benefits. Total known questioned costs relative to PUA benefit offsets is $10,735. ? PEUC benefit payments to offset 100% of overpayments that occurred from PUA, MEUC, FPUC, Regular Unemployment Insurance, and Extended Benefit overpayments. Total known questioned costs relative to PEUC benefit offsets is $14,735. Cause The agency has determined that the UIPLs issued by the Department of Labor (DOL) are not sufficient in altering the understanding MOES has for the CARES Act regulations. MDES does not believe that updating policies and procedures to follow the guidance issued by DOL is required if it is contradictory to their understanding of the CARES Act regulations. Effect The claimant may not receive the appropriate amount of PUA and PEUC benefits if the agency uses incorrect offset percentages to recover overpayments from the previously mentioned unemployment programs. Recommendation We recommended the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - program integrityoverpayments requirements for unemployment insurance. Repeat Finding Yes, 2021-025. Statistically Valid Yes
MATCHING, LEVEL OF EFFORT, EARMARKING Material Weakness Material Noncompliance 2022-021 Strengthen Controls to Ensure Compliance with Matching Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs $1,248 Criteria Per the Department of Labor's Unemployment Insurance Program Letter No. 18- 20, amount of Funds Transferred from FUA (Section 903(i)(l )(B), SSA) ( 42 U.S.C. ? 1103(i)(I)(B)). Section 2103(b) of the CARES Act amended the Social Security Act (SSA) by adding a new subsection 903(i), SSA (42 U.S.C. ? 1103(i)). Section 903(i)(l)(B), SSA (42 U.S.C. ? 1103(i)(l)(B) authorizes transfers from the Federal Unemployment Account (FUA) to a state's account in the unemployment trust fund for one-half of the amount of compensation paid by the state to employees of state and local governmental entities, certain nonprofit organizations, and Federally-recognized Indian tribes that opt to make payments in lieu of contributions (i.e., reimbursing employers). Important Program Dates. These partial reimbursements apply to all payments made in lieu of contributions for weeks of unemployment beginning on or after March 13, 2020 and ending on or before December 31, 2020, even if the unemployed individual is not unemployed as a result of COVID-19. The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate an agency should appropriately update program rules to meet federal program guidelines. Condition During review of matching contributions and extended benefits in relation to unemployment insurance, it was noted that the Mississippi Department of Employment Security (MDES) treated all extended benefits claims as fully federally funded. Per discussion with MDES personnel, the agency specifically stated that they inadvertently programmed all employer accounts to qualify for federal sharing to extended benefits. This allowed local and state government entities and federally recognized Indian Tribes to qualify for extended benefits, however amounts over one-half of the amount of compensation paid by the state to employees of state and local governmental entities and federally recognized Indian Tribes were prohibited per federal guidelines. The auditor reviewed a listing of local and state government entities and federally recognized Indian tribes that received extended benefits and specifically verified that five of these entities did in fact receive extended benefits that should have been prohibited. The auditor verified that the total of benefits paid to these excluded entities amounted to $1,248. Cause MDES inadvertently programmed all employer accounts to qualify for federal sharing of extended benefits including the local and state government entities and federally recognized Indian Tribes. Effect Extended benefit costs attributable to employment with state and local governments or federally recognized Indian tribes were fully funded with Federal dollars. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with matching requirements for unemployment msurance. Repeat Finding Yes, 2021-022. Statistically Valid Yes.
REPORTING Material Weakness Immaterial Noncompliance 2022-022 Strengthen Controls to Ensure Compliance with Reporting Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations 2 CFR 200.302 states each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that proper review and approval procedures should be in place to ensure accuracy and reliability of reports submitted by the agency. Condition During review ofrequired monthly reports for ETA-9050, ETA-9052, and ETA- 9055, there was no evidence of written supervisory approval for the reports submitted. The auditor reviewed four monthly reports, twelve in total, for each of the previously mentioned reports. The agency could not provide support to the auditors due to this report being system generated from ReEmploy. Due to a lack of evidence of review and support, the auditor is unable to determine accuracy within the performance review reports. Cause The Mississippi Department of Employment Security lacks adequate review procedures and proper internal controls over reporting requirements. Effect Without proper review and approval, reports could be inaccurate and incomplete. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with reporting requirements for unemployment insurance. Repeat Finding Yes, 2021-026. Statistically Valid No.
SPECIAL TESTS - BENEFIT PAYMENTS Significant Deficiency 2022-024 Strengthen Controls to Ensure Compliance with Special Tests - Benefit Payments Requirements for Unemployment Insurance ALN Number 17.225 - Unemployment Insurance Federal Award No. UI-34724-20-55-A-28 Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria As stated in the Employment and Training Handbook No. 395, 5th Edition: Section 13: Completion of Cases and Timely Data Entry, "A case is complete when the investigation has been concluded as required, all official actions for the Key Week ( except appeals) have been completed, the supervisor has signed off, and the results have been entered into the computer." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that agencies should appropriately sign and review benefit investigations. Condition During testing performed for Benefit Payments, the auditor noted that there were two instances out of fifty in which Benefit Accuracy Measurement (BAM) cases reviewed were not signed demonstrating evidence of supervisory/investigator review. Cause Due to lack of staffing, agency personnel failed to follow policies and procedures in regards to completing benefit accuracy measurement investigations. Effect Failure to complete and review of investigations may result in the integrity of the information being collected and recorded to be compromised. Recommendation We recommend the Mississippi Department of Employment Security strengthen controls to ensure compliance with special tests - benefit payments requirements for unemployment insurance. Repeat Finding No. Statistically Valid Yes.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
Subrecipient Monitoring Material Weakness Material Noncompliance 2022-023 Strengthen Controls to Ensure Compliance with Subrecipient Monitoring Requirements. ALN Number 17.258, 17.259, 17.278- Workforce Innovation and Opportunity Act Federal Award No. NIA Federal Agency Department of Labor Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR ?200.332(f)) states all pass-through entities (PTE?s) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements when it is expected that the subrecipient's Federal awards expended during the fiscal year equaled or exceeded the threshold?a non- Federal entity that expends $750,000 or more during the non-Federal entity?s fiscal year in Federal awards must have a single audit conducted?set forth in ? 200.501 Audit requirements. Code of Federal Regulations 2 CFR 200.332 (d) states to monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Sec. 184(a)(4) of the Workforce Innovation and Opportunity Act states the State must conduct an annual on-site monitoring review of each local area?s compliance with 2 CFR part 200. Code of Federal Regulations 2 CFR 200.332 (e) states depending upon the passthrough entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient's program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425. Condition The Mississippi Department of Employment Security (MDES) does not efficiently or effectively review the required federal audits for Subrecipient Monitoring Requirements per 2 CFR 200.332 (f). For three out of thirteen subrecipients the agency did not maintain or provide the correct Single Audit or the determination if a Single Audit was required when requested. MDES does not appropriately ensure on-site monitoring is done in a timely manner. During review of ten subrecipients, auditor noted that all documented monitoring was done after the fiscal year was complete, the monitoring was not completed on-site, and the reports for the monitoring were provided back to the agency after the fiscal year was complete. Per discussion with agency personnel, a pre-award scoring is being performed to determine ability of the subrecipient to enact the grant, however a risk based assessment to ensure the subrecipient has proper accountability with the award is not being performed. Cause Staff did not follow policies and procedures for subrecipient on-site monitoring requirements. Effect Subrecipients could be in noncompliance with 2 CFR ? 200.501, Audit requirements, and go undetected by MDES. In addition, MDES could lose federal funding for not properly monitoring their subrecipients. Without proper monitoring of their federal reports, subrecipients may participate in unallowable activities that goes undetected by MDES, the grantor. Recommendation We recommend that the Mississippi Department Employment Security strengthen controls to ensure compliance with the Subrecipient Monitoring requirements. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-031 Strengthen Controls to Ensure Compliance with Eligibility Requirements for the Emergency Rental Assistance Program. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) Federal Award No. NIA Federal Agency Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.303(a)) states that the Non-federal entity should establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee Sponsoring Organizations of the Treadway Commission (COSO). Frequently Asked Questions (FAQ's) as guidance regarding the requirements of the Emergency Rental Assistance program (ERAJ) established by section 501 of Division N of the Consolidated Appropriation Act, 2021, Pub. L. No. 116-260 (December 27, 2020) and the Emergency Rental Assistance Program (ERA2) established by section 3201 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (March 11, 2021) states that grantees must require all applications for assistance to include an attestation from the applicant household that all information included is correct and complete. In all cases, grantees must document their policies and procedures for determining household eligibility to include policies and procedures for determining the prioritization of households in compliance with the statute and maintain records of their determinations. Grantees must also have controls in place to ensure compliance with their policies and procedures and prevent fraud. Condition The Department of Finance and Administration (DF A) did not review and assess procedures over eligibility determination to prevent fraudulent applications from being approved and funds disbursed. DF A's third-party administrator, Mississippi Home Corporation (MHC), fiscal year 2022 single audit report identified a finding related to the approval of fraudulent applications due to the self-attestation process. DF A did not implement nor ensure that corrective action was implemented to mitigate the fraud from reoccurring. Cause DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. Repeat Finding No. Statistically Valid No.
MONITORING DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. No. No. Material Weakness Material Noncompliance 2022-032 Strengthen Controls to Ensure Compliance with Federal Monitoring Requirements. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) 21.026 COVID-19 Homeowners Assistance Fund (HOF) Federal Award No. NIA Federal Agency U.S. Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.400) requires the non-federal entity: ? To be responsible for the efficient and effective administration of the Federal award through the application of sound management practices. ? Assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. ? Ensure the cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during the review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. Code of Federal Regulations (2 CFR 200.303) requires the Non-federal entity: ? Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ? Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and terms and conditions of Federal awards. Condition The Department of Finance and Administration (DF A) passed federal funds to a third-party administrator, Mississippi Home Corporation (MHC) but did not document this subrecipient relationship via a subaward agreement, nor did DF A monitor and support MHC as a subrecipient. MHC is a quasi-governmental agency and not part of the State of Mississippi's financial reporting structure. Therefore, due to lack of support of the subrecipient relationship, we the deemed the programs to be administered by DF A. During testing we noted that DF A did not assume responsibility for the administration of the federal award as required by 2 CFR 200.400, nor did they establish and maintain effective internal controls over the federal award as required by 2 CFR 200.303. DFA did not document their review and approval of program costs which included payroll cost charged to the program based on a billing methodology used for program cost charged to U.S. Department of Housing and Urban Development (HUD) housing counseling grants. There was no evidence of DFA's review and approval over eligibility determined by the MHC or financial and programmatic reports prepared by MHC. Cause The Mississippi Department of Finance and Administration (DF A) does not consider Mississippi Home Corporation as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring there is an increased risk of charging unallowed costs and activity to the program and noncompliance with direct and material compliance requirements. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with monitoring processes in order to ensure federal compliance requirements are being met. Repeat Finding Yes; 2021-032. Statistically Valid N/A.
MONITORING DF A does not consider MHC as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Without proper monitoring and administration of the grant, the risk of noncompliance due to fraud is increased and could result in questioned costs. We recommend the Department of Finance and Administration strengthen controls to ensure compliance with eligibility requirements for the Emergency Rental Assistance Program. No. No. Material Weakness Material Noncompliance 2022-032 Strengthen Controls to Ensure Compliance with Federal Monitoring Requirements. ALN Number 21.023 COVID-19 Emergency Rental Assistance (ERA) 21.026 COVID-19 Homeowners Assistance Fund (HOF) Federal Award No. NIA Federal Agency U.S. Department of Treasury Pass-through Entity NI A Questioned Costs NI A Criteria Code of Federal Regulations (2 CFR 200.400) requires the non-federal entity: ? To be responsible for the efficient and effective administration of the Federal award through the application of sound management practices. ? Assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. ? Ensure the cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure that the non-Federal entity is applying these cost accounting principles on a consistent basis during the review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entity, the reasonableness and equity of such treatments should be fully considered. Code of Federal Regulations (2 CFR 200.303) requires the Non-federal entity: ? Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ? Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and terms and conditions of Federal awards. Condition The Department of Finance and Administration (DF A) passed federal funds to a third-party administrator, Mississippi Home Corporation (MHC) but did not document this subrecipient relationship via a subaward agreement, nor did DF A monitor and support MHC as a subrecipient. MHC is a quasi-governmental agency and not part of the State of Mississippi's financial reporting structure. Therefore, due to lack of support of the subrecipient relationship, we the deemed the programs to be administered by DF A. During testing we noted that DF A did not assume responsibility for the administration of the federal award as required by 2 CFR 200.400, nor did they establish and maintain effective internal controls over the federal award as required by 2 CFR 200.303. DFA did not document their review and approval of program costs which included payroll cost charged to the program based on a billing methodology used for program cost charged to U.S. Department of Housing and Urban Development (HUD) housing counseling grants. There was no evidence of DFA's review and approval over eligibility determined by the MHC or financial and programmatic reports prepared by MHC. Cause The Mississippi Department of Finance and Administration (DF A) does not consider Mississippi Home Corporation as a subrecipient nor does DF A assume responsibility for the direct and material compliance requirements. The program is administered without any responsibility and oversight from the State of Mississippi, the grant recipient. Effect Without proper monitoring there is an increased risk of charging unallowed costs and activity to the program and noncompliance with direct and material compliance requirements. Recommendation We recommend the Department of Finance and Administration strengthen controls to ensure compliance with monitoring processes in order to ensure federal compliance requirements are being met. Repeat Finding Yes; 2021-032. Statistically Valid N/A.
MISSISSIPPI VETERANS AFFAIRS REPORTING Material Weakness Material Noncompliance 2022-033 Strengthen Controls Over the Preparation, Recording, and Review of the Schedule of Expenditures of Federal Awards. ALN Number 64.015 Veterans State Nursing Home Care Federal Award No. N/A Pass-through Entity N/A Questioned Costs N/A Criteria The Code of Federal Regulations (2 cfr ?200.510(b)) states, in part ?the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with ?200.502.? Code of Federal Regulations (2 cfr ?200.502(a)) states, in part, ?the determination of when a federal award is expended must be based on when the activity related to the Federal award occurs.? The Internal Control ? Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that a review is performed to verify the accuracy and completeness of financial information reported. The Federal Grant Activity Schedule captures amounts that must be accurate and complete in order to ensure the accuracy of financial and federal information reported on such schedule to verify the accuracy and completeness of financial information reported. The Mississippi Agency Accounting Policies and Procedures (MAAPP) manual Section 27.30.60 states, ?The Federal Grant Activity schedule supports amounts reported on the GAAP packet for federal grant revenues, receivables, deferred revenues and expenditures. The schedule is also used for preparing the Single Audit Report required by the Single Audit Act, Office of Management and Budget Uniform Grant Guidance and the State?s audit requirements. The amounts on this schedule should be reconciled by the agency with amounts reported on federal financial reports.? Condition The Department failed to report all federal program expenditures on its Schedule of Expenditures of Federal Awards (SEFA). During the audit for the statewide ACFR, the auditors noted that the SEFA from the Department was incomplete and did not contain the federal expenditures for ALN #64.015. Cause Management at MSVA is relatively new and did not realize the federal monies received required the agency to prepare a SEFA. Effect The Department is not compliant with the federal and State report requirements for federal expenditures. Inaccurate reporting of federal program expenditures may result in unreliable and inaccurate reporting to the state and federal oversight organizations, as well materially affect the State?s risk assessment over major federal programs. Recommendation We recommend that the Department review and enhance procedures over accounting for and reporting federal program expenditure activity. The Departments enhancement to the procedures should strengthen internal controls over the preparation and review of the SEFA to ensure that all grant award information and related expenditures are complete and accurate. Repeat Finding Yes; 2021-051, 2020-040. Statistically Valid N/A
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
SUBRECEIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2022-029 Strengthen Controls to Ensure Compliance with On-Site Subrecipient Monitoring Requirements for Special Education Cluster Programs. ALN Number 84.027 Special Education - Grants to States (IDEA, Part B) 84.173 Special Education - Preschool Grants (IDEA, Preschool) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The terms and conditions of the grant agreements between the Mississippi Department of Education (MDE) and the U.S. Department of Education require MDE to administer grants in compliance with the Code of Federal Regulations (2 CFR Part 200 - Uniform Guidance). The Code of Federal Regulations (2 CFR Part 200.331) designates MDE, as a pass through entity, to properly identify subaward requirements to subreceipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subreceipients as necessary to ensure that subawards are used for authorized purposes, complies with the terms and conditions of the subawards and achieves performance goals. The Code of Federal Regulations (2 CFR 200.332(d)) requires all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. MDE's Office of Special Education Bureau of Monitoring and Technical Assistance (OSE-BMT A) procedures require an on-site monitoring visit of each subgrantee contract based on a four-year rotating cycle and a fiscal monitoring assessment for each subgrantee contract by a five year cycle. The OSE-BMTA written procedures state each monitoring visit will have a monitoring team leader who is responsible for completing the monitoring report and sending the report to the Office of Special Education (OSE) Bureau Director for approval. The monitoring instrument is designed to include all areas of compliance to be monitored and consists of a programmatic portion and a fiscal portion. The written procedures require the monitoring report be provided to the LEA within 30 calendar days of the monitoring visit. The written procedures further state that all noncompliance must be corrected as soon as possible, but in no case more than 12 months from the date of the monitoring report. Condition The Mississippi Department of Education (MDE) did not follow written procedures for the 2020-2021 programmatic and fiscal monitoring cycles and did not perform monitoring visits based on the four-year monitoring cycle for the programmatic portion and the five year monitoring cycle for the fiscal portion, as required by MDE policy. MDE policy requires roughly 35 Local Education Agencies (LEAs) to be included in the cyclical on-site monitoring cycle and approximately 29 LEAs to be included in the cyclical fiscal monitoring cycle each year. During the last completed monitoring cycle, 2020-2021 however, only nine LEA's received an on-site monitoring visit and only 12 received a Fiscal monitoring assessment. During testwork over subrecipient monitoring, the auditor tested 2 of the 21 local education agencies (LEAs) that had an on-site or fiscal monitoring assessment for the 2020-2021 monitoring cycle and noted the following: ? Two instances, or 100%, in which the LEA's did not receive timely notification (within 30 calendar days of an on-site monitoring visit) from MDE. o The monitoring reports were issued 78 days after the monitoring visit. ? One instance or 50% in which there was no documentation of the monitoring instrument. Cause MDE did not follow written policies related to their subreceipient monitoring requirements. Effect MDE programmatic funding divisions rely upon on-site monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients and ensure closure of the monitoring visits in a timely manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with subrecipient monitoring requirements for the Special Education Cluster Programs. Repeat Finding Yes, 2021-037. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
SPECIAL TEST & PROVISIONS-PARTICIPATION OF PRIVATE SCHOOL CHILDREN Significant Deficiency Immaterial Noncompliance 2022-030 Strengthen Controls to Ensure Compliance with Equitable Participation of Private School Children Requirements. ALN Number 84.425 Education Stabilization Fund (ESSER) Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs N/ A Criteria The Elementary and Secondary Education Act Section 1117 (c)(1) states, "A local educational agency shall have the final authority, consistent with this section, to calculate the number of children, ages 5 through 17, who are from low-income families and attend private schools by- (A) using the same measure of low income used to count public school children; (B) using the results of a survey that, to the extent possible, protects the identity of families of private school students, and allowing such survey results to be extrapolated if complete actual data are unavailable; (C) applying the low-income percentage of each participating public school attendance area, determined pursuant to this section, to the number of private school children who reside in that school attendance area; or (D) using an equated measure of low income correlated with the measure of low income used to count public school children." The CARES Act Section 18005(a) states "a local educational agency receiving funds under sections 18002 or 18003 of this title shall provide equitable services in the same manner as provided under section 1117 of the ESEA of 1965 to students and t4eachers in non-public schools, as determined in consultation with representation of non-public schools." The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the US. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specify that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that an agency maintain an audit trail to ensure adherence to written policies and procedures. Condition During testwork performed for Special Tests Participation of Private School Children for ESF (ESSER), auditor noted the following exceptions: ? One instance out of two tested in which the LEA received notice that the two private schools in their district revoked their intent to participate, however the LEA still claimed reimbursement for equitable services ESSER funds. Cause MDE did not follow written policies related to equitable services Effect Failure to review the proper documentation to support the data submitted by the LEA on their Consolidated Application prior to MDE' s Office of Federal Programs approval may result in improper payment to the LEAs which could also reduce the amount of future funding of ESSER. Recommendation We recommend the Mississippi Department of Education strengthen controls to ensure compliance with equitable participation of private school children requirements. Repeat Finding No. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-028 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FF AT A) requirements ALN Number 84.010 Title I- Grants to Local Education Agencies 84.367 Title II - Supporting Effective Instruction 84.425 Education Stabilization Fund Federal Award No. All Current Active Grants Federal Agency United States Department of Education Pass-through Entity NI A Questioned Costs NI A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Code of Federal Regulations (2 CFR 170, Appendix A(I)(b)(1)(i)) sets forth the reporting requirements of the Transparency Act that related to subawards under grants. Direct recipients of grants who make first-tier subawards equal to or exceeding $30,000 are required to report each subaward obligating action equal to $30,000 or more in Federal funds. Condition During testwork performed for the Federal Funding Accountability and Transparency Act (FF AT A) reporting fiscal year 2022, the auditor noted the following exceptions: ? Fifteen instances out of 15 reports tested for American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER), in which the reports were not submitted within the required timeframe. Of the fifteen (15) subwards tested for the report month of July 2021, all had a subaward action date of 7127121. Submission date for these subawards was 3124122. Per the compliance supplement, the FF AT A reports are required to be submitted no later than the last day of the following month in which the sub-grant is awarded. The deadline for reports reviewed would have been 8131/21; therefore, all were 205 days late. ? Mississippi Department of Education (MDE) written policies over FF ATA were not updated to reflect the current threshold amount of $30,000 for first tier subawards. Cause MDE personnel did not ensure timely submission of FFATA Reports; MDE personnel did not properly update written policy to reflect federal regulation. Effect Failure to submit reports timely can undermine transparency and accountability since the public will not know about these grants awards in an appropriate manner. Recommendation We recommend the Mississippi Department of Education (MDE) strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FF ATA) requirements. Repeat Finding Yes; 2021-035. Statistically Valid Yes.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
SUBRECIPIENT MONITORING Material Weakness Material Noncompliance 2022-017 Strengthen Controls over On-Site Monitoring for the Low Income Home Energy Assistance Program (LIHEAP). ALN Number 93.568 Low Income Home Energy Assistance (LIHEAP) Federal Award No. G2001MSLIE4 2001MSE5C3 G2101MSLIEAR Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The terms and conditions of the grant agreements between the Mississippi Department of Human Services (MDHS) and the U.S. Department of Health and Human Services require MDHS to administer grants in compliance with the Code of Federal Regulations (2 cfr Part 200). The Code of Federal Regulations (2 cfr Part 200.331) designates MDHS as a pass through entity to properly identify subgrant requirements to subrecipients, evaluate the risk of noncompliance for each subrecipient, and monitor the activities of subrecipients as necessary to ensure that subgrants are used for authorized purposes, complies with the terms and conditions of the subgrants and achieves performance goals. The auditor evaluated the Mississippi Department of Human Services' (MDHS's) compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS's Office of Compliance - Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring review of each subrecipient contract at least once during the subgrant period. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report, the Initial Report of Findings & Recommendations, which is used for communicating finding(s) and/or questioned costs to subrecipients. The written report should be issued within 60 days from the date of the exit conference, which is normally held on the last day of the on-site review. Additionally, if the initial report identifies any administrative findings or questioned costs, a response to the findings is required to be submitted by the subrecipient to DM within thirty (30) working days from the date the report was issued. Additionally, The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for 123 subgrant contracts during state fiscal year 2021, we noted the following exceptions: ? Four instances, or 3 percent, in which the Supervisor's Checklist was not included for Subrecipient on the FY 2021 Monitoring Reviews Smartsheet; therefore, auditor could not verify Supervisory Review of the Monitoring process. ? Two instances, 2 percent, in which Initial Report was not issued within 60 working days of the exit conference. ? One instance, or 1 percent, in which the Division of Monitoring did not receive a response from a subrecipient in regards to the Initial Finding Letter, or the response was not received within 30 days of the receipt of the Initial Findings Letter. ? Three instances, or 2 percent, in which auditor could not verify clearance or resolution of monitoring findings. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subreceipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in questioned costs. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the agency ensure subgrants are monitored timely and that the "Report of Findings & Recommendations" prepared as a result of the on-site monitoring be issued in a timely manner to enable immediate corrective action procedures to be initiated. Additionally, we recommend that the agency maintain all supporting monitoring tools, reports, and correspondence in the monitoring file. Repeat Finding Yes, 2021-013; 2020-030 in 2020; 2019-042 in 2019; 2018-046 in 2018; 2017-037. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
Material Weakness Material Noncompliance 2022-018 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number 93.558 Temporary Assistance for Needy Families (TANF) 93.575, 93.596 Child Care Development Fund (CCDF) Federal Award No. G2001MSTANF G200 lMSCCDF Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs None Criteria The Code of Federal Regulations (2 cfr ?200.331(/)) states all pass-through entities (PTE's) must verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in? 200.501 Audit requirements. The Code of Federal Regulations (2 cfr ? 200.512(a)(l)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph ( c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Additionally, per the MDHS Subgrant/ Agreement Manual: All MDHS subgrantees are required to complete the MDHS Subgrantee Audit Information Form (MDHS-DPI-002). This form must be submitted to the Division of Monitoring no later than ninety (90) calendar days after the end of the subgrantee's fiscal year. This form is necessary to certify the sources and amounts of all Federal awards received and expended by the subgrantee. Condition When performing testwork related to 0MB Single Audit Monitoring as of June 30, 2022, the auditor noted two instances in which the Mississippi Department of Human Services (MDHS) did not ascertain whether Single Audit Requirements were being met by subgrantees. Cause Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Effect Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Recommendation We recommend the Mississippi Department of Human Services' Office of Compliance - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2021-014; 2020-031 in 2020; 2019-043 in 2019; 2018-047 in 2018; 2017- 038 in 2017; 2016-028 in 2016; 2015-009 in 2015; and 2014-016 in 2014. Statistically Valid No.
REPORTING Material Weakness Material Noncompliance 2022-019 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements ALNNumber 93.558 Temporary Assistance for Needy Families (TANF) 93.667 Social Services Block Grant (SSBG) 93.568 Low Income Home Energy Assistance (LIHEAP) 10.542 and 10.649 Pandemic EBT Benefits 93.596 and 93.575 Child Care Development Fund (CCDF) Federal Award No. G2201MSTANF G2201MSCCDD G2201MSCCDM G2201MSSOSR G2201MSLIEA 225MS410S9007 Federal Agency Department of Health and Human Services Pass-through Entity N/A Questioned Costs N/A Criteria Per the Code of Federal Regulations (2 cfr 170.200), "(a) federal awarding agencies are required to publicly report Federal awards that equal or exceed the micro-purchase threshold and publish the required information on a publicfacing, OMB-designated, government wide website and follow Uniform Guidance to support Transparency Act implementation. (b) Federal awarding agencies that obtain post-award data on subaward obligations outside of this policy should take the necessary steps to ensure that their recipients are not required, due to the combination of agency-specific and Transparency Act reporting requirements, to submit the same or similar data multiple times during a given reporting period." The Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2022, the auditor noted that the Mississippi Department of Human Services (MDHS) did not perform reporting over FFATA for Temporary Assistance for Needy Families (TANF), Child Care Development Fund (CCDF), Low Income Energy Assistance Program (LIHEAP), and Pandemic EBT as required by the Code of Federal Regulations (2 cfr 170.200). Cause MDHS staff failed to follow grant regulations requiring FF AT A reporting. Effect Failure to report any applicable awards and subawards resulted in MDHS being in noncompliance with federal reporting requirements and could result m a misstatement of federal expenditures to the federal awarding agency. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with the Federal Funding Accountability and Transparency Act (FF AT A) Reporting. Repeat Finding Yes, 2021-010. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.
ELIGIBILITY Material Weakness Material Noncompliance 2022-025 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program ALN Number 93.767 -Children's Health Insurance Program (CHIP) 93. 778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services Pass-through Entity NI A Questioned Costs $2,303,403 Criteria Code of Federal Regulations (42 CFR ? 435.948(a)(l)) states, "The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR ? 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in ?435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin - Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in ?435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 201.03 states, pensions/retirement benefit payments count as income except for benefits received by a child who is not required to file, as appropriate. Retroactive payments count as income in the month ofreceipt if the payment has not been otherwise counted (as monthly income) for the same time period. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR ? 435.914(a)) states, "The agency must include in each applicant's case record facts to support the agency's decision on his application." Miss. Code Ann (1972) Section 43-13-116.1 (2) states, "In accordance with Section 1940 of the federal Social Security Act ( 42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs. Per The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, "All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist's verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 500.03.01 states, "The Division of Medicaid uses a contractor to conduct the institutional level of care review for the DCLH application and renewal process. The level of care decision is based on the services and specialized care provided by the parent that would routinely be provided to the child in an inpatient hospital, nursing facility or ICF/IID facility. The contractor's medical staff reviews the child's medical history within the last 12 months and other information related to the child's condition in making the level of care decision and relays the level of care decision back to DOM." Code of Federal Regulations (42 CFR ? 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for the Children's Health Insurance Program (CHIP) and the Medical Assistance Program as of June 30, 2022, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: Auditor originally selected 300 total beneficiaries with total payments of $163,387 in June 2022 and $2,167,338 during fiscal year 2022. When these files were received from DOM, auditors noted that files had been pre-screened by DOM personnel during the time period from the initial request to delivery to auditors. Auditors also noted during the initial review of the 300 files that information in the data system had been modified, reviewed, or additional comments had been entered into the files. In at least two instances data had been changed to correct apparent mistakes in the eligibility files or beneficiaries were contacted to confirm information in the file since the initial request of data to DOM. Auditors determined that the review and possible modifications of eligibility data had been pervasive throughout the sample and included files from multiple, if not all, field offices. Auditors determined that this sample could not be sufficiently relied upon to verify compliance with eligibility requirements due to these pre-screenings. Therefore, these "sample" items were removed from the population and considered actual questioned costs due to lack of verifiable audit trail. A new sample was selected after discussions with DOM personnel about the importance of the integrity of the sample and testing process. New procedures were implemented to ensure files requested by auditors remained unmodified and in their original state when eligibility determinations were made. ? CHIP: 60 beneficiaries with total payments of $13,682 in June 2022 and $143,726 during fiscal year 2022. ? MAGI Managed Care: 60 beneficiaries with total payments of $16,112 in June 2022 and $205,944 during fiscal year 2022. ? MAGI Fee for Service: 60 beneficiaries with total payments of $3,676 in June 2022 and $117,837 during fiscal year 2022. ? ABD Managed Care: 60 beneficiaries with total payments of $86,558 in June 2022 and $1,195,766 during fiscal year 2022. ? ABD Fee for Service: 60 beneficiaries with total payments of $43,359 in June 2022 and $504,065 during fiscal year 2022. ? Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax data to verify income, including self-employment income, out-ofstate income, and various types of unearned income. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and the Mississippi Division of Medicaid's Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. ? 28 of the 180 MAGI beneficiaries (or 15.56 percent) reported selfemployment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient's application. Of the 28 instances, eight instances (or 28.57 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient's category of eligibility. Due to MDOM's failure to verify self-employment income on the applicant's tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, auditor could not determine with certainty that individuals are, in fact, ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the eight cited beneficiaries ineligible, it does indicate that they had self-employment income during the year of eligibility determination that was, potentially, not accurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that the self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. Additionally, due to the COVID- 19 pandemic, some beneficiaries did not have a redetermination performed in FY 2022, so the auditor tested the prior year redetermination (which made the beneficiary eligible as of June 30, 2022). The auditor used tax return data from the following years: 2018 for 2019 determinations, 2019 for 2020 determinations, 2020 for 2021 determinations, and 2021 for 2022 determinations. The fiscal year payments for these eight beneficiaries that might not have been eligible to receive the benefits totaled $20,568 of questioned costs. Based on the error rate calculated using the fee for service (FFS) and capitation payments of our sample, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible would fall between $87,707,287 (projected costs based on average monthly payments sampled) and $98,741,848 (projected costs based on actual month payment sampled). The following is a breakdown of these costs by category: CHIP: Between $1,945,889 (actual monthly) to $1,962,303 (average monthly) MAGI Managed Care: Between $65,529,785 (average monthly) to $92,808,714 (actual monthly) MAGI Fee for Service: Between $3,987,244 (actual monthly) to $20,215,199 (average monthly) ? For one of the 180 MAGI beneficiaries (or 0.56 percent), taxable unearned income was reported on a tax return provided to MDOM by the beneficiary, but MDOM did not include the income in the beneficiary's income calculation. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), selfemployment income was reported to MDOM, but MDOM did not request a tax return from the beneficiary. ? For two of the 180 MAGI beneficiaries ( or 1.11 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period that covered June 30, 2022. This resulted in questioned costs of $4,554. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 180 MAGI beneficiaries (or 0.56 percent), the beneficiary's case file did not contain an application or verification of income. This resulted in questioned costs of $2,721. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? For one of the 300 beneficiaries (or 0.33 percent), auditors were unable to verify that any eligibility redeterminations have been performed since 2018. This resulted in questioned costs of $286. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 66 ABO beneficiaries required resource verifications through the Asset Verification system (A VS). Of the 66, nine instances ( or 13.64 percent) in which resources were not verified through A VS at the time of redetermination. This resulted in questioned costs of $107,937. Questioned costs were not projected for this item due to the inability to statistically validate the sample. ? 42 ABO beneficiaries required an institutional level of care review. Of the 42, one instance (or 2.38 percent) in which the beneficiary's case file did not contain a current level of care decision. ? 73 out of 300 beneficiaries ( or 24.33 percent) were not included on all of the required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2022. Of the 73 beneficiaries, six beneficiaries ( or 8.22 percent) were not included on any quarterly PARIS file transmissions during fiscal year 2022. Cause The Mississippi Division of Medicaid (MDOM) did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on
REPORTING Immaterial Noncompliance 2022-026 Ensure Compliance with Reporting Requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. ALN Number 93.767- Children's Health Insurance Program (CHIP) 93.778-Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Federal Agency Department of Health and Human Services (HSS) Pass-through Entity NI A Questioned Costs $206,763 Criteria Code of Federal Regulations (45 CFR ? 95.517) states, "A State must claim FFP for costs associated with a program only in accordance with its approved cost allocation plan. However, if a State has submitted a plan or plan amendment for a State agency, it may, at its option claim FFP based on the proposed plan or plan amendment, unless otherwise advised by the DCA." Per the Mississippi Division of Medicaid Cost Allocation Plan, the Children's Health Insurance Program (CHIP) administration cost pool consists of costs of contracted services to support the administration of CHIP and the allocation method is direct to CHIP. The Code of Federal Regulations (2 CFR ? 200.511) tasks auditees with the responsibility for follow-up and corrective action on all audit findings. As a part of this responsibility, auditees are required to report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. Auditees may either note that the finding has been 1) fully corrected, 2) partially corrected or 3) not corrected. Code of Federal Regulations (2 CFR ? 200.514(e)) states, "The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ? 200.51l(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding." Condition During testwork performed over Quarterly Children's Health Insurance Program Statement of Expenditures for Title XXI reporting requirements, the auditor noted administration expenditures for the quarters ended September 2021 and December 2021 included indirect costs of $97,484 and $109,279 respectively. The Mississippi Division of Medicaid (MDOM) Summary Schedule of Prior Federal Audit Findings dated March 8, 2023, states finding 2021-041 Strengthen controls to ensure compliance with eligibility requirements of the Medical Assistance Program and the Children's Health Insurance Program (CHIP) has been "Fully Corrected". However, during testwork performed over eligibility requirements for the Medical Assistance Program and the Children's Health Insurance Program (CHIP), auditor noted the finding as a repeat finding (2022- 025) in fiscal year 2022. Cause The incorrect cost allocation method was used for administration expenditures of the Children's Health Insurance Program (CHIP). The Mississippi Division of Medicaid did not concur with finding 2021-041 in the prior year. Effect Failure to comply with federal requirements could result in questioned costs and the possible recoupment of funds by the federal granting agency Recommendation We recommend the Mississippi Division of Medicaid ensure compliance with reporting requirements of the Children's Health Insurance Program (CHIP) and the Medical Assistance Program. Repeat Finding No. Statistically Valid No.