Audit 302108

Finding No. 2023 010: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 5,248 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2201HIFOST 2022 2301HIFOST 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $43,000 in monthly benefit payments, out of a population of approximately 480 case files which totaled $4.89 million in annual benefit payments, for testing and noted exceptions in 11 case files as follows: • Three case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Seven case files where the state, FBI, and/or child abuse and neglect clearances were missing. • One case file where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the monthly meeting minutes for Imua Kakou were missing and therefore did not support the monthly meeting requirements at the option of the State. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home or to reunify the child and family, before the child is determined to be eligible under Title IV E. Pursuant to 42 USC 675(b)(8), a State may elect to continue benefits for a child who has reached 18 years of age (until 22 years of age) who is completing secondary education or a program leading to an equivalent credential; enrolled in an institution which provides post-secondary or vocational education; participating in a program or activity designed to promote, or remove barriers to, employment; employed for at least 80 hours per month; or incapable of doing any of the activities described in subclauses (I) through (IV) due to a medical condition, which incapability is supported by regularly updated information in the case plan of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 010: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 5,248 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2201HIFOST 2022 2301HIFOST 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $43,000 in monthly benefit payments, out of a population of approximately 480 case files which totaled $4.89 million in annual benefit payments, for testing and noted exceptions in 11 case files as follows: • Three case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Seven case files where the state, FBI, and/or child abuse and neglect clearances were missing. • One case file where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the monthly meeting minutes for Imua Kakou were missing and therefore did not support the monthly meeting requirements at the option of the State. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home or to reunify the child and family, before the child is determined to be eligible under Title IV E. Pursuant to 42 USC 675(b)(8), a State may elect to continue benefits for a child who has reached 18 years of age (until 22 years of age) who is completing secondary education or a program leading to an equivalent credential; enrolled in an institution which provides post-secondary or vocational education; participating in a program or activity designed to promote, or remove barriers to, employment; employed for at least 80 hours per month; or incapable of doing any of the activities described in subclauses (I) through (IV) due to a medical condition, which incapability is supported by regularly updated information in the case plan of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,527 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2201HIADPT 2022 2301HIADPT 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $44,000 in monthly benefit payments, out of a population of approximately 2,300 case files totaling $14.2 million in annual benefit payments, for testing and noted exceptions in 20 case files as follows: • 16 case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the State, Federal Bureau of Investigation (“FBI”), and/or child abuse and neglect clearances were missing. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Four case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • One case file where the final approval was granted to a household with an individual who was convicted of spousal abuse. • One case file where the adoption decree was missing from the case records. • One case file where the income eligibility test was missing from the case records. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 671(a)(20)(B), the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent. Pursuant to 42 USC 673(a)(2)(A), the State must determine the child to have special needs to be eligible for adoption assistance payments. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 671(a)(20)(A)(i), in any case involving a child on whose behalf such payments are to be so made in which a record check reveals a felony conviction for spousal abuse, such final approval shall not be granted. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contains information concerning the nature of services. Pursuant to 42 USC 673(a)(2)(D), if an adopted child received Title IV E guardianship assistance payments, the Title IV E agency would apply the adoption assistance criteria for the child as if the guardianship never occurred. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,527 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2201HIADPT 2022 2301HIADPT 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $44,000 in monthly benefit payments, out of a population of approximately 2,300 case files totaling $14.2 million in annual benefit payments, for testing and noted exceptions in 20 case files as follows: • 16 case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the State, Federal Bureau of Investigation (“FBI”), and/or child abuse and neglect clearances were missing. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Four case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • One case file where the final approval was granted to a household with an individual who was convicted of spousal abuse. • One case file where the adoption decree was missing from the case records. • One case file where the income eligibility test was missing from the case records. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 671(a)(20)(B), the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent. Pursuant to 42 USC 673(a)(2)(A), the State must determine the child to have special needs to be eligible for adoption assistance payments. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 671(a)(20)(A)(i), in any case involving a child on whose behalf such payments are to be so made in which a record check reveals a felony conviction for spousal abuse, such final approval shall not be granted. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contains information concerning the nature of services. Pursuant to 42 USC 673(a)(2)(D), if an adopted child received Title IV E guardianship assistance payments, the Title IV E agency would apply the adoption assistance criteria for the child as if the guardianship never occurred. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 009: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,473 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2201HIGARD 2022 2301HIGARD 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $47,000 in monthly benefit payments, out of a population of approximately 375 case files totaling $3.9 million in annual benefit payments, for testing and noted exceptions in 21 case files as follows: • 17 case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Two case files where we were unable to determine if a child who attained the age of 14 was consulted regarding the kinship guardianship agreement. • One case file where the State, FBI, and/or child abuse and neglect clearances were missing in the case files. • One case file where documentation regarding continuation of monthly subsidy payments after the child’s 18th birthday was missing. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 673(d)(3)(A), a child is eligible when the state agency determines the following: a) With respect to a child who has attained 14 years of age, the child has been consulted regarding the kinship guardianship arrangement. b) Eligible for foster care maintenance payments under 42 USC 672 while residing for at least six consecutive months in the home of the prospective relative guardian. c) Removed from his or her home pursuant to a voluntary placement agreement or as a result of a judicial determination to the effect that continuation in the home would be contrary to the welfare of the child. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Pursuant to 42 USC 671(a)(20)(c), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent an instance of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 009: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,473 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2201HIGARD 2022 2301HIGARD 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $47,000 in monthly benefit payments, out of a population of approximately 375 case files totaling $3.9 million in annual benefit payments, for testing and noted exceptions in 21 case files as follows: • 17 case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Two case files where we were unable to determine if a child who attained the age of 14 was consulted regarding the kinship guardianship agreement. • One case file where the State, FBI, and/or child abuse and neglect clearances were missing in the case files. • One case file where documentation regarding continuation of monthly subsidy payments after the child’s 18th birthday was missing. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 673(d)(3)(A), a child is eligible when the state agency determines the following: a) With respect to a child who has attained 14 years of age, the child has been consulted regarding the kinship guardianship arrangement. b) Eligible for foster care maintenance payments under 42 USC 672 while residing for at least six consecutive months in the home of the prospective relative guardian. c) Removed from his or her home pursuant to a voluntary placement agreement or as a result of a judicial determination to the effect that continuation in the home would be contrary to the welfare of the child. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Pursuant to 42 USC 671(a)(20)(c), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent an instance of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 017: Cash Management (Significant Deficiency) Questioned costs: $ 122,940 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.667 – Social Services Block Grant Award Number and Award Year: 2101HISOSR 2020-25022 2201HISOSR 2021-2023 2301HISOSR 2022 – 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 40 advance payments and for three advance payments we were unable to determine the time elapsed between the drawdown of federal funds and the related disbursement for program purposes. Criteria Pursuant to 31 CFR 205.33(a), the Department is required to minimize the time between the drawdown of Federal funds and their disbursement for Federal program purposes. Effect Failure to track and match the drawdown of federal funds with the related disbursements for program purposes limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials Program management indicated that they were unaware of the cash management requirement. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 006: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 4,574 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.767 – State Children’s Health Insurance Program Award Number and Award Year: 2205HI5022 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $3.4 million of payments out of a total payment population of $7.0 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 011: Special Tests and Provisions (Material Weakness) Questioned cost: $ 2,085 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020-2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted five instances where the Department’s records did not support the use of the income information obtained through Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to determine eligibility and evaluate benefit amounts may result in potential overpayment of benefits to ineligible participants. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 011: Special Tests and Provisions (Material Weakness) Questioned cost: $ 2,085 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020-2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted five instances where the Department’s records did not support the use of the income information obtained through Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to determine eligibility and evaluate benefit amounts may result in potential overpayment of benefits to ineligible participants. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 012: Special Tests and Provisions (Material Weakness) Questioned cost: $ 19,748 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 10 participant files for testing out of a population of 99 participant files that were initially determined by the Title IV D agency as not cooperating with the child support enforcement requirements. We noted seven files did not contain any correspondence, notices or documentation to indicate whether any follow up action, up to and including case closure and cessation of benefits, were performed. Criteria Pursuant to 45 CFR 264.30, the Title IV A agency is required to take appropriate action, as defined, if the Title IV D agency determines that an individual is not cooperating with the child support enforcement requirements. Effect Failure to retain documentation to support a determination that appropriate action was taken limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 012: Special Tests and Provisions (Material Weakness) Questioned cost: $ 19,748 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 10 participant files for testing out of a population of 99 participant files that were initially determined by the Title IV D agency as not cooperating with the child support enforcement requirements. We noted seven files did not contain any correspondence, notices or documentation to indicate whether any follow up action, up to and including case closure and cessation of benefits, were performed. Criteria Pursuant to 45 CFR 264.30, the Title IV A agency is required to take appropriate action, as defined, if the Title IV D agency determines that an individual is not cooperating with the child support enforcement requirements. Effect Failure to retain documentation to support a determination that appropriate action was taken limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 013: Reporting (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition During our audit, we tested a non statistical sample of six subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) was completed. Subawards not reported: 6 $1,775,000 Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduced transparency on the use of program funds and represents noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that the Department develop policies and procedures to ensure required FFATA reports are filed.

Finding No. 2023 013: Reporting (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition During our audit, we tested a non statistical sample of six subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) was completed. Subawards not reported: 6 $1,775,000 Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduced transparency on the use of program funds and represents noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that the Department develop policies and procedures to ensure required FFATA reports are filed.

Finding No. 2023 014: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 2,457 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 4,400 participants whose work participation activity was reported on the ACF 199 and noted exceptions with six participants as follows: • We noted one instance where a work eligible participant complied with their work participation plan, but the Department inaccurately reported the corresponding participant as noncompliant. • We noted three instances where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participants as not participating and not subject to sanction. • We noted one instance where a non work eligible participant was inaccurately excluded from the report. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as deemed engaged in work. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in noncompliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 014: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 2,457 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 4,400 participants whose work participation activity was reported on the ACF 199 and noted exceptions with six participants as follows: • We noted one instance where a work eligible participant complied with their work participation plan, but the Department inaccurately reported the corresponding participant as noncompliant. • We noted three instances where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participants as not participating and not subject to sanction. • We noted one instance where a non work eligible participant was inaccurately excluded from the report. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as deemed engaged in work. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in noncompliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 015: Reporting (Material Weakness) Questioned costs: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020– 2022 Repeat Finding? Yes Condition The Department achieved a two parent work participation rate of 18%, which is below the federally mandated rate of 32.2%, calculated by subtracting the caseload reduction credit of 57.8% from the base 90.0%. Criteria Pursuant to 45 CFR 261.23, a State must achieve a 90% minimum two parent participation rate minus any caseload reduction credit to which it is entitled. Pursuant to 45 CFR 261.40(a)(2)(i), the minimum two parent participation rate the State must meet decreases by the number of percentage points the prior-year two parent caseload, including two parent cases receiving assistance under a separate State program, fell in comparison to the FY 2005 two parent caseload, including two parent cases receiving assistance under a separate State program. Effect Failure to meet the minimum two parent work participation rate may result in a reduction in the amount of State family assistance grants received. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 015: Reporting (Material Weakness) Questioned costs: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020– 2022 Repeat Finding? Yes Condition The Department achieved a two parent work participation rate of 18%, which is below the federally mandated rate of 32.2%, calculated by subtracting the caseload reduction credit of 57.8% from the base 90.0%. Criteria Pursuant to 45 CFR 261.23, a State must achieve a 90% minimum two parent participation rate minus any caseload reduction credit to which it is entitled. Pursuant to 45 CFR 261.40(a)(2)(i), the minimum two parent participation rate the State must meet decreases by the number of percentage points the prior-year two parent caseload, including two parent cases receiving assistance under a separate State program, fell in comparison to the FY 2005 two parent caseload, including two parent cases receiving assistance under a separate State program. Effect Failure to meet the minimum two parent work participation rate may result in a reduction in the amount of State family assistance grants received. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 016: Eligibility (Material Weakness) Questioned cost: $ 1,539 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $38,000 of benefit payments, out of a population of approximately 7,000 cases, representing approximately $15.8 million of benefit payments, for testing and noted exceptions in four case files as follows: • Two case files where benefit payments were incorrectly calculated. • Two case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. Criteria The TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. In addition, Administration for Children and Families (“ACF”) program instruction TANF ACF-PI 2020 01 indicates that States may make program changes but must submit a plan amendment within 30 days of the program changes. The program instruction recommends that the State seek guidance from ACF on whether a particular action is allowable under program requirements. Effect Failure to follow the established procedures in place over the eligibility determination process and to submit a plan amendment or to seek guidance from ACF on whether a particular action is allowable under program requirements, resulted in noncompliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issue when they arise. Recommendation We recommend that the Department work with ACF to determine what remediation actions, if any, are required.

Finding No. 2023 016: Eligibility (Material Weakness) Questioned cost: $ 1,539 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $38,000 of benefit payments, out of a population of approximately 7,000 cases, representing approximately $15.8 million of benefit payments, for testing and noted exceptions in four case files as follows: • Two case files where benefit payments were incorrectly calculated. • Two case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. Criteria The TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. In addition, Administration for Children and Families (“ACF”) program instruction TANF ACF-PI 2020 01 indicates that States may make program changes but must submit a plan amendment within 30 days of the program changes. The program instruction recommends that the State seek guidance from ACF on whether a particular action is allowable under program requirements. Effect Failure to follow the established procedures in place over the eligibility determination process and to submit a plan amendment or to seek guidance from ACF on whether a particular action is allowable under program requirements, resulted in noncompliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issue when they arise. Recommendation We recommend that the Department work with ACF to determine what remediation actions, if any, are required.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2023 010: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 5,248 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2201HIFOST 2022 2301HIFOST 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $43,000 in monthly benefit payments, out of a population of approximately 480 case files which totaled $4.89 million in annual benefit payments, for testing and noted exceptions in 11 case files as follows: • Three case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Seven case files where the state, FBI, and/or child abuse and neglect clearances were missing. • One case file where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the monthly meeting minutes for Imua Kakou were missing and therefore did not support the monthly meeting requirements at the option of the State. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home or to reunify the child and family, before the child is determined to be eligible under Title IV E. Pursuant to 42 USC 675(b)(8), a State may elect to continue benefits for a child who has reached 18 years of age (until 22 years of age) who is completing secondary education or a program leading to an equivalent credential; enrolled in an institution which provides post-secondary or vocational education; participating in a program or activity designed to promote, or remove barriers to, employment; employed for at least 80 hours per month; or incapable of doing any of the activities described in subclauses (I) through (IV) due to a medical condition, which incapability is supported by regularly updated information in the case plan of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 010: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 5,248 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2201HIFOST 2022 2301HIFOST 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $43,000 in monthly benefit payments, out of a population of approximately 480 case files which totaled $4.89 million in annual benefit payments, for testing and noted exceptions in 11 case files as follows: • Three case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Seven case files where the state, FBI, and/or child abuse and neglect clearances were missing. • One case file where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the monthly meeting minutes for Imua Kakou were missing and therefore did not support the monthly meeting requirements at the option of the State. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home or to reunify the child and family, before the child is determined to be eligible under Title IV E. Pursuant to 42 USC 675(b)(8), a State may elect to continue benefits for a child who has reached 18 years of age (until 22 years of age) who is completing secondary education or a program leading to an equivalent credential; enrolled in an institution which provides post-secondary or vocational education; participating in a program or activity designed to promote, or remove barriers to, employment; employed for at least 80 hours per month; or incapable of doing any of the activities described in subclauses (I) through (IV) due to a medical condition, which incapability is supported by regularly updated information in the case plan of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,527 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2201HIADPT 2022 2301HIADPT 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $44,000 in monthly benefit payments, out of a population of approximately 2,300 case files totaling $14.2 million in annual benefit payments, for testing and noted exceptions in 20 case files as follows: • 16 case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the State, Federal Bureau of Investigation (“FBI”), and/or child abuse and neglect clearances were missing. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Four case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • One case file where the final approval was granted to a household with an individual who was convicted of spousal abuse. • One case file where the adoption decree was missing from the case records. • One case file where the income eligibility test was missing from the case records. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 671(a)(20)(B), the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent. Pursuant to 42 USC 673(a)(2)(A), the State must determine the child to have special needs to be eligible for adoption assistance payments. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 671(a)(20)(A)(i), in any case involving a child on whose behalf such payments are to be so made in which a record check reveals a felony conviction for spousal abuse, such final approval shall not be granted. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contains information concerning the nature of services. Pursuant to 42 USC 673(a)(2)(D), if an adopted child received Title IV E guardianship assistance payments, the Title IV E agency would apply the adoption assistance criteria for the child as if the guardianship never occurred. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,527 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2201HIADPT 2022 2301HIADPT 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $44,000 in monthly benefit payments, out of a population of approximately 2,300 case files totaling $14.2 million in annual benefit payments, for testing and noted exceptions in 20 case files as follows: • 16 case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the State, Federal Bureau of Investigation (“FBI”), and/or child abuse and neglect clearances were missing. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Four case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • One case file where the final approval was granted to a household with an individual who was convicted of spousal abuse. • One case file where the adoption decree was missing from the case records. • One case file where the income eligibility test was missing from the case records. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 671(a)(20)(B), the State shall check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the home of such a prospective parent. Pursuant to 42 USC 673(a)(2)(A), the State must determine the child to have special needs to be eligible for adoption assistance payments. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 671(a)(20)(A)(i), in any case involving a child on whose behalf such payments are to be so made in which a record check reveals a felony conviction for spousal abuse, such final approval shall not be granted. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contains information concerning the nature of services. Pursuant to 42 USC 673(a)(2)(D), if an adopted child received Title IV E guardianship assistance payments, the Title IV E agency would apply the adoption assistance criteria for the child as if the guardianship never occurred. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 009: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,473 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2201HIGARD 2022 2301HIGARD 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $47,000 in monthly benefit payments, out of a population of approximately 375 case files totaling $3.9 million in annual benefit payments, for testing and noted exceptions in 21 case files as follows: • 17 case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Two case files where we were unable to determine if a child who attained the age of 14 was consulted regarding the kinship guardianship agreement. • One case file where the State, FBI, and/or child abuse and neglect clearances were missing in the case files. • One case file where documentation regarding continuation of monthly subsidy payments after the child’s 18th birthday was missing. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 673(d)(3)(A), a child is eligible when the state agency determines the following: a) With respect to a child who has attained 14 years of age, the child has been consulted regarding the kinship guardianship arrangement. b) Eligible for foster care maintenance payments under 42 USC 672 while residing for at least six consecutive months in the home of the prospective relative guardian. c) Removed from his or her home pursuant to a voluntary placement agreement or as a result of a judicial determination to the effect that continuation in the home would be contrary to the welfare of the child. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Pursuant to 42 USC 671(a)(20)(c), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent an instance of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 009: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,473 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2201HIGARD 2022 2301HIGARD 2023 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $47,000 in monthly benefit payments, out of a population of approximately 375 case files totaling $3.9 million in annual benefit payments, for testing and noted exceptions in 21 case files as follows: • 17 case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Two case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Two case files where we were unable to determine if a child who attained the age of 14 was consulted regarding the kinship guardianship agreement. • One case file where the State, FBI, and/or child abuse and neglect clearances were missing in the case files. • One case file where documentation regarding continuation of monthly subsidy payments after the child’s 18th birthday was missing. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 673(d)(3)(A), a child is eligible when the state agency determines the following: a) With respect to a child who has attained 14 years of age, the child has been consulted regarding the kinship guardianship arrangement. b) Eligible for foster care maintenance payments under 42 USC 672 while residing for at least six consecutive months in the home of the prospective relative guardian. c) Removed from his or her home pursuant to a voluntary placement agreement or as a result of a judicial determination to the effect that continuation in the home would be contrary to the welfare of the child. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Pursuant to 42 USC 671(a)(20)(c), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent an instance of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including compliance with 2 CFR Part 200. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 017: Cash Management (Significant Deficiency) Questioned costs: $ 122,940 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.667 – Social Services Block Grant Award Number and Award Year: 2101HISOSR 2020-25022 2201HISOSR 2021-2023 2301HISOSR 2022 – 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 40 advance payments and for three advance payments we were unable to determine the time elapsed between the drawdown of federal funds and the related disbursement for program purposes. Criteria Pursuant to 31 CFR 205.33(a), the Department is required to minimize the time between the drawdown of Federal funds and their disbursement for Federal program purposes. Effect Failure to track and match the drawdown of federal funds with the related disbursements for program purposes limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials Program management indicated that they were unaware of the cash management requirement. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 006: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 4,574 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.767 – State Children’s Health Insurance Program Award Number and Award Year: 2205HI5022 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $3.4 million of payments out of a total payment population of $7.0 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 011: Special Tests and Provisions (Material Weakness) Questioned cost: $ 2,085 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020-2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted five instances where the Department’s records did not support the use of the income information obtained through Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to determine eligibility and evaluate benefit amounts may result in potential overpayment of benefits to ineligible participants. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 011: Special Tests and Provisions (Material Weakness) Questioned cost: $ 2,085 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020-2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted five instances where the Department’s records did not support the use of the income information obtained through Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to determine eligibility and evaluate benefit amounts may result in potential overpayment of benefits to ineligible participants. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 012: Special Tests and Provisions (Material Weakness) Questioned cost: $ 19,748 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 10 participant files for testing out of a population of 99 participant files that were initially determined by the Title IV D agency as not cooperating with the child support enforcement requirements. We noted seven files did not contain any correspondence, notices or documentation to indicate whether any follow up action, up to and including case closure and cessation of benefits, were performed. Criteria Pursuant to 45 CFR 264.30, the Title IV A agency is required to take appropriate action, as defined, if the Title IV D agency determines that an individual is not cooperating with the child support enforcement requirements. Effect Failure to retain documentation to support a determination that appropriate action was taken limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 012: Special Tests and Provisions (Material Weakness) Questioned cost: $ 19,748 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 10 participant files for testing out of a population of 99 participant files that were initially determined by the Title IV D agency as not cooperating with the child support enforcement requirements. We noted seven files did not contain any correspondence, notices or documentation to indicate whether any follow up action, up to and including case closure and cessation of benefits, were performed. Criteria Pursuant to 45 CFR 264.30, the Title IV A agency is required to take appropriate action, as defined, if the Title IV D agency determines that an individual is not cooperating with the child support enforcement requirements. Effect Failure to retain documentation to support a determination that appropriate action was taken limits the Department’s ability to demonstrate compliance with the requirement and resulted in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 013: Reporting (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition During our audit, we tested a non statistical sample of six subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) was completed. Subawards not reported: 6 $1,775,000 Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduced transparency on the use of program funds and represents noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that the Department develop policies and procedures to ensure required FFATA reports are filed.

Finding No. 2023 013: Reporting (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition During our audit, we tested a non statistical sample of six subawards and found no evidence that the reporting required by Section 2, Full Disclosure of Entities Receiving Federal Funding, of the Federal Funding Accountability and Transparency Act (“FFATA”) was completed. Subawards not reported: 6 $1,775,000 Criteria Section 2, Full Disclosure of Entities Receiving Federal Funding, of the FFATA requires an entity to report subcontracts made under federally-awarded contracts by the end of the month following the month in which the prime recipient awards any subgrant greater than or equal to $30,000. Effect Failure to file required reports reduced transparency on the use of program funds and represents noncompliance with the requirements of 2 CFR Part 200. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that the Department develop policies and procedures to ensure required FFATA reports are filed.

Finding No. 2023 014: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 2,457 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 4,400 participants whose work participation activity was reported on the ACF 199 and noted exceptions with six participants as follows: • We noted one instance where a work eligible participant complied with their work participation plan, but the Department inaccurately reported the corresponding participant as noncompliant. • We noted three instances where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participants as not participating and not subject to sanction. • We noted one instance where a non work eligible participant was inaccurately excluded from the report. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as deemed engaged in work. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in noncompliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 014: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 2,457 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 4,400 participants whose work participation activity was reported on the ACF 199 and noted exceptions with six participants as follows: • We noted one instance where a work eligible participant complied with their work participation plan, but the Department inaccurately reported the corresponding participant as noncompliant. • We noted three instances where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participants as not participating and not subject to sanction. • We noted one instance where a non work eligible participant was inaccurately excluded from the report. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as deemed engaged in work. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in noncompliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 015: Reporting (Material Weakness) Questioned costs: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020– 2022 Repeat Finding? Yes Condition The Department achieved a two parent work participation rate of 18%, which is below the federally mandated rate of 32.2%, calculated by subtracting the caseload reduction credit of 57.8% from the base 90.0%. Criteria Pursuant to 45 CFR 261.23, a State must achieve a 90% minimum two parent participation rate minus any caseload reduction credit to which it is entitled. Pursuant to 45 CFR 261.40(a)(2)(i), the minimum two parent participation rate the State must meet decreases by the number of percentage points the prior-year two parent caseload, including two parent cases receiving assistance under a separate State program, fell in comparison to the FY 2005 two parent caseload, including two parent cases receiving assistance under a separate State program. Effect Failure to meet the minimum two parent work participation rate may result in a reduction in the amount of State family assistance grants received. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 015: Reporting (Material Weakness) Questioned costs: $ – Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020– 2022 Repeat Finding? Yes Condition The Department achieved a two parent work participation rate of 18%, which is below the federally mandated rate of 32.2%, calculated by subtracting the caseload reduction credit of 57.8% from the base 90.0%. Criteria Pursuant to 45 CFR 261.23, a State must achieve a 90% minimum two parent participation rate minus any caseload reduction credit to which it is entitled. Pursuant to 45 CFR 261.40(a)(2)(i), the minimum two parent participation rate the State must meet decreases by the number of percentage points the prior-year two parent caseload, including two parent cases receiving assistance under a separate State program, fell in comparison to the FY 2005 two parent caseload, including two parent cases receiving assistance under a separate State program. Effect Failure to meet the minimum two parent work participation rate may result in a reduction in the amount of State family assistance grants received. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2023 016: Eligibility (Material Weakness) Questioned cost: $ 1,539 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $38,000 of benefit payments, out of a population of approximately 7,000 cases, representing approximately $15.8 million of benefit payments, for testing and noted exceptions in four case files as follows: • Two case files where benefit payments were incorrectly calculated. • Two case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. Criteria The TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. In addition, Administration for Children and Families (“ACF”) program instruction TANF ACF-PI 2020 01 indicates that States may make program changes but must submit a plan amendment within 30 days of the program changes. The program instruction recommends that the State seek guidance from ACF on whether a particular action is allowable under program requirements. Effect Failure to follow the established procedures in place over the eligibility determination process and to submit a plan amendment or to seek guidance from ACF on whether a particular action is allowable under program requirements, resulted in noncompliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issue when they arise. Recommendation We recommend that the Department work with ACF to determine what remediation actions, if any, are required.

Finding No. 2023 016: Eligibility (Material Weakness) Questioned cost: $ 1,539 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 and COVID 19 – 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014-2022 1601HITAN3 2016-2022 2101HITANF 2020-2022 2201HITANF 2021-2022 2301HITANF 2022-2023 2101HITANFC6 2020 – 2022 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $38,000 of benefit payments, out of a population of approximately 7,000 cases, representing approximately $15.8 million of benefit payments, for testing and noted exceptions in four case files as follows: • Two case files where benefit payments were incorrectly calculated. • Two case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. Criteria The TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. In addition, Administration for Children and Families (“ACF”) program instruction TANF ACF-PI 2020 01 indicates that States may make program changes but must submit a plan amendment within 30 days of the program changes. The program instruction recommends that the State seek guidance from ACF on whether a particular action is allowable under program requirements. Effect Failure to follow the established procedures in place over the eligibility determination process and to submit a plan amendment or to seek guidance from ACF on whether a particular action is allowable under program requirements, resulted in noncompliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issue when they arise. Recommendation We recommend that the Department work with ACF to determine what remediation actions, if any, are required.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 007: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 16,525 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.777, 93.778, and COVID 19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2205HIMAP 2022 2305HIMAP 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 2,010 providers. The providers selected for testing represented approximately $61 million of payments out of a total payment population of $234 million. We identified one provider where the DHS Form 1139 did not support revalidation within the most recent five-year period. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – Supplemental Nutrition Assistance Program (“SNAP”) Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 21 processing centers and noted that evidence of supervisor reviews over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the DHS Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the DHS Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the DHS Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over DHS Form 1494, DHS Form 1495, and/or DHS Form 1050 was not maintained at two processing centers, increasing the risk of noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, there was a lack of diligence in following the Department’s established policies and procedures resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 004 Special Tests and Provisions (Material Weakness) Questioned cost: $ – Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 12 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances up to approximately $26.8 million. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in noncompliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require supervisors to evidence their review resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2023 005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,760 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561, and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI4HIS8036 2021 – 2022 7HI400HI4 2020-2023 7HI430HI4 2021-2023 7HI400HI5 2020-2022 7HI430HI5 2021-2023 7HIHI7F1003 2021-2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $51,000 in monthly payments, out of a population of approximately 183,000 participant files totaling $895 million in annual benefit payments, for testing and noted exceptions in six case files as follows: • Four case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Two case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligible worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants did not receive the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.