Audit 299892

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-003 – Coronavirus State and Local Fiscal Recovery Funds – Activities Allowed or Unallowed Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A – Direct Program Award Year: Fiscal Year 2022-2023 Compliance Requirement: Activities Allowed or Unallowed Questioned Costs: $988,387 Criteria As a condition to receiving Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award payments from the U.S. Department of the Treasury (Treasury), the County agreed that the funds disbursed under this award may only be used in compliance with sections 602 and 603 of the Social Security Act (the Act), Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the SLFRF. Under the Treasury’s guidance, recipients may use SLFRF payments to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers. Accordingly, recipients may not use SLFRF funds to provide premium pay to essential workers for work performed after the end of the National Emergency on April 10, 2023. Condition During our testing of expenditures charged to the program, we noted the County provided bi-weekly payments of $150 to County employees who work in congregate settings; the payments began on December 26, 2022, and will continue through the end of June 2025. Per inquiry of staff, the total amount of congregate settings payments for work performed after April 10, 2023, totaled $988,387. Cause of Condition The County’s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are allowable. Repeat Finding No. Effect of Condition The County is not in compliance with the activities allowed or unallowed requirements related to the program. Recommendation Management should develop an understanding of the compliance requirements for SLFRF and COVID-19 related programs. This can be achieved through the following actions: • Reviewing the Single Audit Compliance Supplement and program-specific guidance documents issued by the awarding agencies. • Consulting with qualified professionals specializing in federal grant compliance. • Attending relevant trainings offered by the U.S. Department of the Treasury or the specific federal agencies managing the COVID-19 programs in which the County participates. Management Response and Corrective Action Plan At the time of approval, the Board Agenda Item for the Congregate Setting Payment (CSP) program did not clearly state under which expenditure category this expense would fall under. Upon further research and as identified in the County’s Recovery Plan Annual Report, the CSP program should have been classified under the expenditure category for Public Health and Negative Economic Impacts (EC 3) as it addressed the negative impacts of the COVID-19 pandemic experienced by the County, by providing a retention incentive to specific positions working in congregate settings. The County will be working with the Treasury to properly categorize the payments to its correct Expenditure Category. The County will be in communication with the CAO’s office to ensure that expenditures reported in the Project and Expenditure Quarterly Reports (P&E) are in agreement with the intended expenditure categories as specified in the County’s Recovery Plan. The County will revise the CSP program to properly reflect its correct expenditure category in the next P&E Report, due July 31, 2024, for Quarter 1 2024. An agenda item will be submitted for approval to the County Board of Supervisors which will memorialize the CSP program by April 2024.

Finding 2023-004 – Coronavirus State and Local Fiscal Recovery Funds – Allowable Cost/Cost Principles Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A – Direct Program Award Year: Fiscal Year 2022-2023 Compliance Requirement: Allowable Cost/Cost Principles Questioned Costs: $1,734,018 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states that, except where otherwise authorized by stature, in order to be allowable under Federal awards, costs must be incurred during the approved budget period. Condition During our testing of expenditures charged to the program, we identified $1,734,018 in questioned costs related to cybersecurity improvements recorded during the audit period ending June 30, 2023. Our procedures revealed that these costs were actually incurred outside the audit period, with evidence indicating dates after June 30, 2023. Cause of Condition The County’s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are allowable. Repeat Finding Yes. See prior year finding 2022-002. Effect of Condition The County is not in compliance with the allowable cost/cost principles requirements under the Uniform Guidance. Recommendation Management should review the identified transactions and reclassify them to the appropriate period. Additionally, management should strengthen internal controls to ensure that only allowable costs incurred by the County’s fiscal year end period are charged to the program. This may include procedures for reviewing invoices and approving expenditures to verify the date the cost was incurred. For ongoing Department claims, management should ensure that proper documentation exists for each expenditure, including receipts, invoices, and proof of payment prior to processing. Management Response and Corrective Action Plan The County agrees with the finding. The County processed a transfer of revenues to ISD in anticipation of the expenses to be incurred for cybersecurity improvements in FY 2022-2023; however, the fund was not fully spent. The Auditor-Controller’s office will work with the CAO’s office to review and address the inefficiencies in the County’s internal control system. We will review the identified transactions and will work with ISD to reclassify the identified expenditures to the appropriate period. Going forward, the County will ensure that proper documentation, such as receipts, invoices, and proof of payments, are received from departments prior to processing. This implementation will be effective immediately.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-002 – Review of Income Eligibility and Verification System (IEVS) Reports Program: Temporary Assistance for Needy Families (TANF) Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Passed Through: State of California, Department of Social Services Award Year: Fiscal Year 2022-2023 Compliance Requirement: Special Tests and Provisions Questioned Costs: $0 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 states that the non-Federal entity (County) must 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. This includes timely reviews of the IEVS reports for the TANF program. Condition Three instances were identified where the IEVS reports were not reviewed within forty-five days of receipt, in violation of program regulations. Cause of Condition Eligibility staff did not process and review IEVS reports timely due to departmental staffing shortages, high vacancy rates, and training and preparation efforts of the statewide migration into the CalSAWS System. There was an average of 18% vacancy rate during this rating period. Also, the Department of Health Care Services (DHCS) stopped transmitting Applicant IEVS files to CalWIN on March 2, 2023, through June 2023. This was due to the Franchise Tax Board (FTB) annual data not being available. The stoppage during this timeframe incurred contradictory information to staff who thought they were not supposed to process all reports. Repeat Finding No. Effect of Condition The County is not in compliance with the IEVS special tests and provisions requirement related to the program. Recommendation Management should develop and implement a system to ensure that IEVS reports are reviewed within the required timeframe. This may include: • Updating internal policies and procedures to clearly define the timeframe for IEVS review. • Implementing a tracking system to monitor the receipt and review of IEVS reports. • Providing training to staff on the importance of timely IEVS review procedures. Management Response and Corrective Action Plan A reminder message will be sent to the appropriate staff to process Applicant IEVS within 45 days of application processing and renewals to ensure compliance of review of IEVS report. Internal policies such as Workflows will be reviewed and updated with IEVS report processing if possible. Also, an annual IEVS refresher training will be issued to staff who are required to process them. We also intend to have multiple Eligibility Worker recruitments throughout the year to address staffing shortages/reducing vacancy rate.

Finding 2023-003 – Coronavirus State and Local Fiscal Recovery Funds – Activities Allowed or Unallowed Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A – Direct Program Award Year: Fiscal Year 2022-2023 Compliance Requirement: Activities Allowed or Unallowed Questioned Costs: $988,387 Criteria As a condition to receiving Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award payments from the U.S. Department of the Treasury (Treasury), the County agreed that the funds disbursed under this award may only be used in compliance with sections 602 and 603 of the Social Security Act (the Act), Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the SLFRF. Under the Treasury’s guidance, recipients may use SLFRF payments to respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers. Accordingly, recipients may not use SLFRF funds to provide premium pay to essential workers for work performed after the end of the National Emergency on April 10, 2023. Condition During our testing of expenditures charged to the program, we noted the County provided bi-weekly payments of $150 to County employees who work in congregate settings; the payments began on December 26, 2022, and will continue through the end of June 2025. Per inquiry of staff, the total amount of congregate settings payments for work performed after April 10, 2023, totaled $988,387. Cause of Condition The County’s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are allowable. Repeat Finding No. Effect of Condition The County is not in compliance with the activities allowed or unallowed requirements related to the program. Recommendation Management should develop an understanding of the compliance requirements for SLFRF and COVID-19 related programs. This can be achieved through the following actions: • Reviewing the Single Audit Compliance Supplement and program-specific guidance documents issued by the awarding agencies. • Consulting with qualified professionals specializing in federal grant compliance. • Attending relevant trainings offered by the U.S. Department of the Treasury or the specific federal agencies managing the COVID-19 programs in which the County participates. Management Response and Corrective Action Plan At the time of approval, the Board Agenda Item for the Congregate Setting Payment (CSP) program did not clearly state under which expenditure category this expense would fall under. Upon further research and as identified in the County’s Recovery Plan Annual Report, the CSP program should have been classified under the expenditure category for Public Health and Negative Economic Impacts (EC 3) as it addressed the negative impacts of the COVID-19 pandemic experienced by the County, by providing a retention incentive to specific positions working in congregate settings. The County will be working with the Treasury to properly categorize the payments to its correct Expenditure Category. The County will be in communication with the CAO’s office to ensure that expenditures reported in the Project and Expenditure Quarterly Reports (P&E) are in agreement with the intended expenditure categories as specified in the County’s Recovery Plan. The County will revise the CSP program to properly reflect its correct expenditure category in the next P&E Report, due July 31, 2024, for Quarter 1 2024. An agenda item will be submitted for approval to the County Board of Supervisors which will memorialize the CSP program by April 2024.

Finding 2023-004 – Coronavirus State and Local Fiscal Recovery Funds – Allowable Cost/Cost Principles Program: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of the Treasury Passed Through: N/A – Direct Program Award Year: Fiscal Year 2022-2023 Compliance Requirement: Allowable Cost/Cost Principles Questioned Costs: $1,734,018 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states that, except where otherwise authorized by stature, in order to be allowable under Federal awards, costs must be incurred during the approved budget period. Condition During our testing of expenditures charged to the program, we identified $1,734,018 in questioned costs related to cybersecurity improvements recorded during the audit period ending June 30, 2023. Our procedures revealed that these costs were actually incurred outside the audit period, with evidence indicating dates after June 30, 2023. Cause of Condition The County’s existing internal control system is not operating effectively to provide reasonable assurance that charges to the program are allowable. Repeat Finding Yes. See prior year finding 2022-002. Effect of Condition The County is not in compliance with the allowable cost/cost principles requirements under the Uniform Guidance. Recommendation Management should review the identified transactions and reclassify them to the appropriate period. Additionally, management should strengthen internal controls to ensure that only allowable costs incurred by the County’s fiscal year end period are charged to the program. This may include procedures for reviewing invoices and approving expenditures to verify the date the cost was incurred. For ongoing Department claims, management should ensure that proper documentation exists for each expenditure, including receipts, invoices, and proof of payment prior to processing. Management Response and Corrective Action Plan The County agrees with the finding. The County processed a transfer of revenues to ISD in anticipation of the expenses to be incurred for cybersecurity improvements in FY 2022-2023; however, the fund was not fully spent. The Auditor-Controller’s office will work with the CAO’s office to review and address the inefficiencies in the County’s internal control system. We will review the identified transactions and will work with ISD to reclassify the identified expenditures to the appropriate period. Going forward, the County will ensure that proper documentation, such as receipts, invoices, and proof of payments, are received from departments prior to processing. This implementation will be effective immediately.