Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 25 daily SNAP Electronic Benefit Transfer (EBT) reconciliations found that six (24 percent) lacked evidence of review and four (16 percent) included discrepancies that were not followed up on.Context:A state must have a system in place to reconcile, on a daily basis, all of the funds entering into, exiting from, and remaining in the system each day with the state?s US Treasury benefit account, and the EBT contractor?s (Fidelity National Information Services) records. States must also have systems in place to reconcile retailer credit activity as reported into the banking system to client transactions maintained by the processor and to the funds drawn down from the EBT benefit account with the US Treasury. The reconciliation process ensures that a state only draws federal funds for authorized transactions.The sample population totaled 249 daily reconciliations performed by DPA staff during FY 22, of which 25 were selected for testing. Auditors verified that retailer credit activity reconciled to SNAP client transactions, to its issuance files of posting to recipient accounts with the EBT contractor and to posting to and drawdown activity from the State?s benefit account with the US Treasury. The four reconciliations that included discrepancies were resolved over the subsequent day?s reconciliations. However, there was no documentation identifying the cause of the discrepancies or evidence demonstrating follow-up.Cause:According to DPA management, supervisory reviews of the daily reconciliations were not performed April through June 2022 due to significant staff turnover.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 7 CFR 274.4(a) requires that State agencies shall account for all issuance through a reconciliation process. The EBT system must provide reports and documentation pertaining to reconciliation. Reconciliations must be conducted and records kept as follows:? Verification of retailer's credits against deposit information entered into the automated clearinghouse network.? Reconciliation of total funds entered into, exiting from, and remaining in the system each day.Effect:Inconsistent review of the EBT reconciliations and lack of discrepancy resolution increases the risk of unidentified processing errors. Account balance inconsistencies between the three systems impedes the State?s ability to ensure all SNAP benefits are adequately reconciled and accounted for. States are responsible for efficiently and effectively administering SNAP in accordance with federal laws, regulations, and FNS approved Plan of Operations. A determination by FNS that the State has failed to comply with any of these provisions may result in a suspension or disallowance of the federal share of the State?s administrative funds.Questioned Costs:NoneRecommendation:DOH?s DPA director should ensure review procedures are followed and staff are appropriately trained to ensure monthly reconciliation packets are reviewed for accuracy and completeness, and discrepancies are properly identified and resolved.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 25 daily SNAP Electronic Benefit Transfer (EBT) reconciliations found that six (24 percent) lacked evidence of review and four (16 percent) included discrepancies that were not followed up on.Context:A state must have a system in place to reconcile, on a daily basis, all of the funds entering into, exiting from, and remaining in the system each day with the state?s US Treasury benefit account, and the EBT contractor?s (Fidelity National Information Services) records. States must also have systems in place to reconcile retailer credit activity as reported into the banking system to client transactions maintained by the processor and to the funds drawn down from the EBT benefit account with the US Treasury. The reconciliation process ensures that a state only draws federal funds for authorized transactions.The sample population totaled 249 daily reconciliations performed by DPA staff during FY 22, of which 25 were selected for testing. Auditors verified that retailer credit activity reconciled to SNAP client transactions, to its issuance files of posting to recipient accounts with the EBT contractor and to posting to and drawdown activity from the State?s benefit account with the US Treasury. The four reconciliations that included discrepancies were resolved over the subsequent day?s reconciliations. However, there was no documentation identifying the cause of the discrepancies or evidence demonstrating follow-up.Cause:According to DPA management, supervisory reviews of the daily reconciliations were not performed April through June 2022 due to significant staff turnover.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 7 CFR 274.4(a) requires that State agencies shall account for all issuance through a reconciliation process. The EBT system must provide reports and documentation pertaining to reconciliation. Reconciliations must be conducted and records kept as follows:? Verification of retailer's credits against deposit information entered into the automated clearinghouse network.? Reconciliation of total funds entered into, exiting from, and remaining in the system each day.Effect:Inconsistent review of the EBT reconciliations and lack of discrepancy resolution increases the risk of unidentified processing errors. Account balance inconsistencies between the three systems impedes the State?s ability to ensure all SNAP benefits are adequately reconciled and accounted for. States are responsible for efficiently and effectively administering SNAP in accordance with federal laws, regulations, and FNS approved Plan of Operations. A determination by FNS that the State has failed to comply with any of these provisions may result in a suspension or disallowance of the federal share of the State?s administrative funds.Questioned Costs:NoneRecommendation:DOH?s DPA director should ensure review procedures are followed and staff are appropriately trained to ensure monthly reconciliation packets are reviewed for accuracy and completeness, and discrepancies are properly identified and resolved.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-029Federal Awarding Agency: United States Department of the Treasury (USTreasury)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 21.019 Coronavirus Relief Fund (CRF) ? COVID-19Federal Award Number: SLT0031, SLT0073Applicable Compliance Requirement: ReportingCondition:DHSS staff used inconsistent methods of accounting when reporting federal expenditures for the CRF program on FY 22 quarterly financial progress reports. As a result, amounts reported were inaccurate.Context:Each prime recipient of the CRF is required by Treasury to submit quarterly financial progress reports that identify COVID-19 related costs incurred during the reported period. The progress reports detail the total amount of CRF payments the prime recipient received from Treasury; the amount of funds received that were expended or obligated for each project or activity; all projects and activities for which funds were expended or obligated; and information on any loans issued, contracts and grants awarded, transfers made to other government entities, and direct payments made by the prime recipient in excess of $50,000. Aggregated information was required for direct payments made by the prime recipients that were less than $50,000. Reports must be submitted through the federal GrantSolutions portal and be supported by the accounting records.The CRF program was primarily administered for the State of Alaska by the Department of Commerce, Community, and Economic Development (DCCED) and DHSS. The CRF program administered by DHSS during FY 22 included issuing awards to subrecipients for non-profit support, transfers to other State agencies, and other initiatives related to the public health emergency. Subawards and transfers were issued as advances.DHSS?s reporting data was prepared for submission by its DFMS staff. When ready for submission, the complete reports were certified by the Department of Administration?s state accountant. DHSS reported CRF expenditures on either the cash or modified accrual basis, depending upon the activity being reported. For example, DHSS used the modified accrual basis to report DHSS?s public health related expenditures, but used the cash basis to report CRF monies it transferred to other State agencies. Using the cash basis of accounting resulted in DHSS staff reporting the amount of CRF monies advanced instead of the amount expended on allowable activities. Auditors noted that the DCCED portion of the CRF reports were prepared using the modified accrual basis of accounting.Beginning in FY 23, DHSS was split into two departments: DOH and DFCS.Cause:Expenditures were misreported due to a misunderstanding of CRF reporting requirements. DHSS review procedures were insufficient to ensure the accuracy and consistency of the information prior to inclusion in the State?s quarterly CRF report.Criteria:Per Treasury?s Office of Inspector General Memo OIG-CA-20-028, Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and Recordkeeping (Revised), Frequently Asked Question #32, a prime recipient must report CRF expenditures on the accrual basis of accounting, unless the prime recipient?s traditional practice is to report on a cash basis of accounting for all its financial reporting.Effect:Inaccurate federal reporting reduces transparency and may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:DOH and DFCS?s DFMS directors should coordinate efforts to improve training and strengthen procedures to ensure federal reports are accurate and prepared using the appropriate basis of accounting.Views of Responsible Officials:Management partially agrees with the finding. The written procedures were developed in collaboration with both OMB and the Division of Finance in June of 2020 to comply with the Treasury Office?s guidance for federal reporting. The department reported the amounts advanced in accordance with these procedures and two emails from June 2020 were previously provided supporting the arrangement agreed upon specific to federal reporting.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management states the agency followed procedures developed to comply with USTreasury guidance for federal reporting. However, as noted in the finding, staff did not report in accordance with USTreasury guidance that required the modified accrual basis of accounting for quarterly financial reports. Additional training may be necessary to ensure accounting staff can effectively identify and apply accounting principles.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.019 Coronavirus Relief Fund (CRF) ? COVID-19Federal Award Number: SLT0031, SLT0073Applicable Compliance Requirement: Subrecipient MonitoringCondition:DCCED staff did not issue timely management decisions for three of the four CRF single audit findings requiring follow-up during FY 22.Context:Federal regulations require pass-through entities to issue a management decision for audit findings relating to federal awards provided to subrecipients. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the adequacy of the subrecipient?s proposed corrective actions to address the findings.Of the three untimely management decisions, two were issued past the six month requirement and one has not been issued as of the end of FY 22. For the two management decisions issued past the six month requirement, one was two months and the other was 11 months past the requirement as of the end of FY 22.Cause:Due to staff oversight, DCCED?s single audit procedures did not require management decisions to be issued within the six month requirement. Further, the procedures did not require a supervisory review.Criteria:Title 2 CFR 200.332(d)(3) states that pass-through entities? monitoring of subrecipients must include issuing a management decision for audit findings that relate to federal awards provided to subrecipients.Title 2 CFR 200.521(d) states a management decision must be issued within six months of acceptance of the audit report by the federal audit clearinghouse.Effect:The lack of timely management decisions may result in subrecipients not taking appropriate corrective action. Noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements.Questioned Costs:NoneRecommendation:DCCED?s DAS director should revise single audit procedures to ensure management decisions are issued within six months. Further, procedures should include adequate supervisory review.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.027 SLFRFFederal Award Number: SLFRP0006, SLFRP2633, SLFRP4544Applicable Compliance Requirement: Subrecipient MonitoringCondition:For one of two subrecipients, DCCED staff did not identify all federally required information on the FY 22 SLFRF subaward or conduct a risk assessment.Context:DCCED entered into a contract with the Juneau Economic Development Council (JEDC) to assist in administering the Grants to Tourism and Other Businesses for the Negative Economic Impacts portion of the SLFRF program. Under the contract, JEDC determined eligibility, sent payments to eligible grantees, and provided disbursement reports to DCCED for monitoring. This activity created a subrecipient relationship.The audit reviewed the form used to contract with JEDC and determined that none of the federally required information was included on the form. Additionally, the audit found that a risk assessment was not conducted for JEDC.Cause:Due to staff turnover in the program manager position, JEDC was not initially identified as a subrecipient since a contract was used instead of a grant award document.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.332 requires the State to perform annual risk assessments and ensure every subaward includes the required information at the time of the subaward.Effect:Absent risk assessments, subrecipients may not be sufficiently monitored, increasing the risk of inappropriate use of SLFRF monies and noncompliance with federal laws. Not providing the required information in the subaward document increases the risk of subrecipient noncompliance with the terms and conditions of the federal award and could result in the State repaying SLFRF monies to the federal government.Questioned Costs:NoneRecommendation:DCCED?s DAS director should strengthen training of program manager staff to ensure compliance with all subrecipient monitoring requirements applicable to federally funded subawards.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Environmental Protection AgencyImpact: Significant Deficiency, NoncomplianceAL Number and Title: 66.202 Congressionally Mandated ProjectsFederal Award Number: 01J81201, 01J96801Applicable Compliance Requirement: ReportingCondition:Testing of five subawards subject to Federal Funding Accountability and Transparency Act (FFATA) requirements had obligated amounts incorrectly reported to the FFATA Subaward Reporting System (FSRS), or not reported at all.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). FSRS is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards.The audit tested all five subawards totaling $1,477,260 issued to five Remote Maintenance Worker (RMW) subrecipients. RMW subawards, which have performance periods on a state fiscal year basis, are funded by two federal awards with consecutive award periods. Once the earlier federal award period has ended, DEC staff obligates funds from the new federal award for the remaining subaward amounts that have not been spent.Amounts for the five subawards tested had incorrect amounts reported to the FSRS. When DEC staff obligated funds from the new federal award, the obligated amounts were not reported to the FSRS. DEC staff made the corrections in the FSRS after auditors brought the errors to their attention.Cause:Per DEC staff, DEC lacks formal procedures for FFATA reporting.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEC?s Division of Water director should implement written procedures to ensure all subawards subject to FFATA reporting are entered into the FSRS accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: U.S. Department of Health and Human Services (USDHHS)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Federal Award Number: 6 NU50CK000509-01-06Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Seven of 25 timesheets that charged FY 22 personal services to the ELC program were not supported in compliance with federal requirements.Context:The audit tested a sample of 25 timesheets and identified seven instances of noncompliance. Four errors were personal and holiday leave charged to the grant award when the timesheets did not indicate time worked on the ELC program. Two timesheets lacked positive time keeping or biennial certifications attesting that the employees worked 100 percent of the time on ELC. One timesheet was inaccurately entered into the payroll system.Cause:According to Division of Public Health (DPH) management, staff turnover and inadequate training for temporary employees on how to complete, review, and approve timesheets contributed to the timesheet errors.Criteria:Per Title 45 CFR 75.303(a), the State must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.430(i)(1) states charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities?(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Effect:The errors resulted in questioned costs totaling $9,778. Questioned costs for the population are projected to be $608,618 based on the dollar of noncompliance observed in the sample projected over the tested population. Noncompliance with federal regulations may result in the federal award agency imposing additional conditions or taking corrective action, including reduced federal funding.Questioned Costs:$9,778Recommendation:DPH?s director should provide training for completing and reviewing timesheets, and ensure personal service costs charged to the ELC program are allowable and supported by required documentation.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 ELCFederal Award Number: 6 NU50CK000509-01-06, 6 NU50CK000509-02-02, 6 NU50CK000509-02-04Applicable Compliance Requirement: Procurement and Suspension and DebarmentCondition:For nine of 13 ELC contracts and awards, DFMS procurement staff did not conduct suspension and debarment searches, require self-certification, or include a clause or condition to ensure compliance with federal suspension and debarment requirements.Context:Nine out of the 13 ELC contracts and awards issued to municipalities, school districts, and other vendors tested by auditors did not have sufficient evidence DFMS staff verified compliance with suspension and debarment requirements. However, no instances of funds being paid to a suspended or debarred vendor or organization were identified.Cause:DFMS management suspended certain grants and procurement processes and procedures while under national and state public health emergency declarations in order to expedite distribution of emergency funds across the state.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 180.300 requires an organization to verify that the person with whom they intend to do business is not excluded or disqualified. This may be accomplished by:(a) Checking for exclusions in the federal system for award management; or(b) Collecting a certification from that person; or(c) Adding a clause or condition to the covered transaction with that person.Effect:The lack of effective internal controls may result in awarding federal funds to a suspended or debarred contractor.Questioned Costs:NoneRecommendation:DOH?s DFMS director should follow established federal grant management procedures to ensure funds are not awarded to suspended or debarred contractors.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 ELCFederal Award Number: 6 NU50CK000509-01-06, 6 NU50CK000509-02-02, 6 NU50CK000509-02-04Applicable Compliance Requirement: ReportingCondition:Auditors could not obtain sufficient and appropriate evidence to verify the accuracy of the data reported in the monthly ELC special report for FY 22 COVID tests conducted by school districts. In addition, for two ELC grant awards, Enhancing Detection and Reopening Schools, inception to date expenditures were overstated by $4,436,595 and $725,221, respectively, in the June 30, 2022, financial reports.Context:During FY 22, school districts that received ELC funds from DPH submitted weekly COVID testing information to the National Electronic Disease Surveillance Base System (NBS). DPH staff gathered the information submitted to NBS and summarized the COVID test data by date range, test type, tests conducted, positive cases, and school district. The information was reported monthly to the federal award agency. Each ELC grant award required monthly financial reports for FY 22.Cause:According to DPH staff, documentation was not retained for the summary level data reported in the monthly special report. The lack of documentation was attributed to employee turnover and insufficient procedures.DPH staff review of the ELC financial reports was insufficient to identify the incorrect data. Further, expenditure reports for financial reporting were improperly designed.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ELC federal award terms and conditions for reporting required monthly financial reports. The ELC grant award, Reopening Schools, terms and conditions also required monthly reports on the number of COVID tests conducted.Effect:Inaccurate federal reporting reduces transparency and may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:DPH?s director should develop and implement procedures to ensure compliance over ELC reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: U.S. Department of Health and Human ServicesImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.423 1332 State Innovation WaiversFederal Award Number: 1 SIWIW180004-01-00Applicable Compliance Requirement: ReportingCondition:The subaward issued for the 1332 State Innovation Waivers program subject to Federal Funding Accountability and Transparency Act (FFATA) requirements was not reported to the FFATA Subaward Reporting System (FSRS).Context:FFATA requires information on federal awards be made available to the public via a single website (www.usaspending.gov). FSRS is the reporting tool federal awardees, such as the State of Alaska, use to report subaward and executive compensation data regarding first-tier subawards.The audit found that the DCCED, Division of Insurance (DOI) failed to report to FSRS the one FY 22 subaward, totaling $100,000,000.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:DCCED program staff?s internal controls over the review of the federal notice of award terms and conditions were insufficient to identify FFATA reporting requirements.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 2 CFR 170 states in part that federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made, and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DCCED?s DOI director should improve procedures over the review of grant awards? standard terms and conditions to ensure DCCED is in compliance with all reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-032Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 Temporary Assistance for Needy Families (TANF)Federal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Eligibility, Special Tests and ProvisionsPrior Year Finding: 2021-030Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Allowable Activities/Allowable CostsCondition:Ten of 25 TANF recipient case files tested lacked documentation supporting the request and use of income and benefit information through the Income Eligibility and Verification System (IEVS) for determining eligibility and benefits. Further, the following eligibility errors were identified:? Eight TANF applicants did not have eligibility redetermined within 12 months and eligibility was automatically extended.? Three TANF applications were not reviewed within 30 days of receipt.? Three applications either did not fill out the felony conviction disclosures or the section was not retained in the case file.? Three applications did not have adequate income verification support.? Three benefit payment amounts were not calculated accurately.? One application did not include child support documentation in the case file.? One renewal application was not reviewed for an eligibility redetermination.Additionally, 24 of the TANF recipient cases received Pandemic Emergency Assistance Fund (PEAF) payments, of which 20 did not have IEVS documentation to support the eligibility determination prior to DHSS making the PEAF payments.Context:The State is required to ensure only financially needy families consisting of a minor child living with a parent or other caretaker relatives receive TANF assistance. DPA employs ETs who review applications, identify income and financial resources, and make a determination whether a family is eligible to receive benefits, including the amount of the benefits. As part of verifying TANF eligibility, the State is required to coordinate data exchanges when making eligibility determinations, including, but not limited to: wage information from the State Wage Information Collection Agency, IEVS, unemployment compensation information from the Department of Labor, all available information from the Social Security Administration, and information from the United States Citizenship and Immigration Services.DPA?s Alaska Temporary Assistance manual provides ETs guidance on how to calculate income. Once the information is received, reviewed, and calculated, ETs enter the information into EIS. EIS automatically calculates the monthly benefit amount based on the eligibility factors entered. If eligibility factors are not entered accurately, benefit amounts are paid incorrectly.DPA?s Administrative Procedures Manual, Section 109 requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit-level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness of each action taken, verification used, and contacts made using the online case note screen in EIS or on a Report of Contact sheet maintained in the hard copy case files.On April 9, 2021, the USDHHS Administration for Children and Families (ACF) issued TANF Program Instruction No. TANF-ACF-PI-2021-02, which provided guidance regarding the newly established PEAF. The instructions allowed states to provide non-recurrent, short-term benefits to needy families with children and allowed states to determine the definition of ?needy? families. DPA management sent a letter to TANF recipients during May 2022 stating the division planned to issue a PEAF payment to each household who currently received TANF or received TANF during the past 12 months.Cause:According to DPA management, eligibility redeterminations were not performed because system-generated certification period extensions were granted during the public health emergency. DPA management stated a pending State plan amendment, submitted during FY 22, will allow retroactive flexibilities for eligibility redeterminations during the public health emergency. Auditors reviewed the pending State plan amendment and noted the requested flexibilities expired on August 31, 2020, which is prior to the FY 22 period under audit.Turnover, staffing shortages, and inadequate training contributed to ETs not performing and/or documenting all required components of eligibility determinations and not accurately calculating benefit amounts.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 45 CFR 206.10(a)(3)(i) requires that a decision be made promptly on applications, pursuant to reasonable State-established time standards not in excess of 45 days. PerSection 4.1 of the Alaska State Plan for TANF, dated December 31, 2020, applications are required to be processed within 30 days of receipt.Title 45 CFR 264.10 specifies states must meet the requirements of IEVS and request certain information from the Internal Revenue Service, the State Wage Information Collection Agency, the Social Security Administration, and the Immigration and Naturalization Service to perform computer match data records to verify recipient information.Pursuant to Title 45 CFR 206.10, DPA?s federally approved TANF State Plan outlines specific State requirements for applications and eligibility determinations, including:? Section 4.1 Application ? Program applicants must complete an application form in writing. To be considered complete, the application must provide all requested information and be supported by documentation the department determines necessary to establish eligibility.? Section 4.3 Reporting Requirements ? Participants must also take part in periodic reviews of the family?s situation. DPA redetermines eligibility and benefit amount based on the information provided during the reviews and any other changes that are reported between reviews.? Section 13 Family Need ? The department establishes whether a child is financially needy. Financial need is determined to exist if the family resources and income are below the need standards set by the department.Title 45 CFR 206.10(a) (9) (iii) requires that at least one face-to-face redetermination must be conducted for each case once every 12 months. However, TANF Program Instruction No. TANF-ACF-PI-2020-01 allowed for telephonic or other virtual/electronic communication platforms to be used during the COVID-19 pandemic.TANF Program Instruction No. TANF-ACF-PI-2021-02 requires the use of IEVS to determine eligibility for families who receive PEAF.Title 45 CFR 75.2 defines improper payments to include payments that were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.Effect:The State may be penalized for up to two percent of the federal grant award for failure to participate in IEVS. As a result of not redetermining eligibility during FY 22 and the other errors identified, ineligible recipients may have received benefits. Additionally, TANF benefit payments were calculated incorrectly resulting in overpayments.Questioned Costs:$138,024Recommendation:DPA?s director should improve training and monitoring of staff to ensure staff comply with TANF eligibility and document retention procedures and eligibility determinations are performed accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-036Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Five of the eight child support noncooperation alerts tested (63 percent) were not assessed a penalty to reduce TANF benefits when determined necessary.Context:Department of Revenue, Child Support Services Division, sends DPA a weekly listing of public assistance clients that are not cooperating with establishing paternity, or in establishing, modifying, or enforcing a support order with respect to a child. The weekly listing is used to create an alert for each client in DPA?s EIS. When an alert is received by an ET, DPA procedures require that the ET assess a TANF benefit penalty, enter a case note within EIS, and print a notice for the client. The alerts are not retained in EIS after this process has been completed. DPA does not maintain a log or tracking sheet of the weekly alerts to confirm alerts are processed timely or accurately. This finding was first identified when auditing the program during FY 19.Cause:DPA management lacked adequate monitoring procedures to ensure alerts were processed. Further, DPA management stated that competing priorities and staffing shortages prevented the development of procedures.Criteria:Title 45 CFR 264.30 requires the State to deduct from the assistance that would otherwise be provided to the family of the individual not cooperating with the child support enforcement requirements an amount equal to, but not less than, 25 percent of the amount of such assistance, or deny the family any assistance under the program.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:Delays in assessing, or failing to assess, child support noncooperation penalties resulted in clients receiving unallowable benefits.Questioned Costs:$4,542Recommendation:DPA's director should develop and implement procedures to monitor processing of child support noncooperation alerts to ensure notices and penalties are processed timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-037Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Nineteen of 25 cases tested (76 percent) reported work activities on the ACF-199 report that were inaccurate, unsupported or unverified.Context:DPA reports the work verification data through the quarterly ACF-199 reports. The ACF-199 reports are compiled from information that is either entered in EIS by ETs or through interfacing with the case management system. The information is electronically captured through a data file and transmitted to ACF. The data transmitted for the ACF-199 report allows ACF to determine whether the State has met the required work participation rates under the TANF work verification plan.Cause:DPA lacked internal control procedures to ensure work activities reported were verified, supported by documentation in the case file, and accurate. According to DPA management the case management system was unavailable for work services providers to enter work activities until May 2022 due to a cyberattack.Criteria:Title 45 CFR 261.60(a) requires a state to report the actual hours that an individual participates in an activity. Furthermore, per 45 CFR 261.61(a) a state must support each individual?s hours of participation through documentation in the case file and 45CFR 261.62(a)(2) requires a state to ensure the accuracy of the reporting by establishing and employing procedures for determining how to count and verify reported work activities. Additionally, 45 CFR 261.62(a)(4) requires a state to establish and employ internal controls to ensure compliance with procedures.Title 45 CFR 75.303(a) requires the State establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:Per Title 45 CFR 261.65 the State could be subject to a penalty equal to not less than one percent and not more than five percent of the federal grant award for not maintaining adequate work participation support.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement internal control procedures to ensure work activities reported by TANF recipients are retained, verified, supported, and accurately entered into the case management system. Further, DOH?s commissioner should strengthen procedures to ensure continuity of business processes in the event that information systems do not function.Views of Responsible Officials:DOH does not agree with the finding. The availability of the system due to the cyberattack is outside the control of the division.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states the availability of the system due to the cyberattack was outside the control of the division; however, hard copy case management file support provided by DPA management was utilized for the audit. The documentation provided by DPA management was insufficient as TANF recipient work activities were not retained, not verified, unsupported, or inaccurate.
Prior Year Finding: 2021-038Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:The audit reviewed 13 FY 22 TANF case files for clients that were not engaged in work activities and did not have a good cause exemption. Of the 13 cases, four were assessed a penalty, two were not assessed a penalty even though documentation showed that a penalty should have been assessed, and seven cases lacked sufficient documentation to determine whether a penalty should have been assessed.Context:The goal of the TANF program is to transition TANF recipients into jobs or other work activities to support families. To attain this goal, the TANF program uses the "work first" approach. TANF recipients are required to look for paid employment. Individuals who cannot find immediate paid employment participate in activities that focus on gaining skills and experience that lead directly to employment, and increase the family?s self-sufficiency.To comply with the work first goal, DPA staff, with the assistance of contracted case managers, identify the work activities for the TANF recipients to help them move toward obtaining employment. TANF recipients must take part in assigned work activities. TANF recipients who fail to take part in assigned work activities incur a penalty that reduces the assistance payment.Per federal guidance, states can establish good cause or other exemptions for TANF recipients not engaging in work activities. Alaska Temporary Assistance Manual, section 730-2, outlines the following good cause exemptions: caretaker of a baby, caretaker of a disabled child or parent, medical reasons, family hardship, lack of childcare, no childcare funds, or no transportation funds. Where applicable, exemptions must be documented by a physician or other licensed medical professional.Cause:DPA staff turnover and shortages contributed to ETs not issuing penalties. Although DPA had procedures, supervisors were not adequately monitoring ETs to ensure procedures were performed. Additionally, DPA used a case management system in conjunction with hard copy case management files to track the work activities of the TANF recipients. According to DPA management, support for work activities could not be entered into the case management system as the system was unavailable until May 2022 due to the cyberattack.Criteria:Title 45 CFR 261.14 requires the State to reduce or terminate the amount of public assistance to families of individuals who refuse to engage in work.Title 45 CFR 75.303(a) requires the State establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:According to 45 CFR 261.54, the State could be subject to a penalty equal to not less than one percent and not more than five percent of the federal grant award for failing to assess penalties when individuals refuse to engage in work activities.Questioned Costs:NoneRecommendation:DPA?s director should improve training and supervision of ETs to ensure TANF recipients? refusal to work penalties are processed. Further, DPA?s director should strengthen procedures to ensure continuity of business processes in the event information systems do not function.Views of Responsible Officials:DOH does not agree with the finding. A State Plan Amendment is pending approval with ACFand will be applicable retroactively.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states the TANF state plan amendment pending approval will allow retroactive application and carry forward program flexibilities. Per review of the state plan amendment, the requested flexibilities ended August 31, 2020, which is prior to the FY 22 audit scope. Further, DOH did not receive federal approval during FY 22 for an amended state plan.
Prior Year Finding: 2021-032Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 Temporary Assistance for Needy Families (TANF)Federal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Eligibility, Special Tests and ProvisionsPrior Year Finding: 2021-030Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Allowable Activities/Allowable CostsCondition:Ten of 25 TANF recipient case files tested lacked documentation supporting the request and use of income and benefit information through the Income Eligibility and Verification System (IEVS) for determining eligibility and benefits. Further, the following eligibility errors were identified:? Eight TANF applicants did not have eligibility redetermined within 12 months and eligibility was automatically extended.? Three TANF applications were not reviewed within 30 days of receipt.? Three applications either did not fill out the felony conviction disclosures or the section was not retained in the case file.? Three applications did not have adequate income verification support.? Three benefit payment amounts were not calculated accurately.? One application did not include child support documentation in the case file.? One renewal application was not reviewed for an eligibility redetermination.Additionally, 24 of the TANF recipient cases received Pandemic Emergency Assistance Fund (PEAF) payments, of which 20 did not have IEVS documentation to support the eligibility determination prior to DHSS making the PEAF payments.Context:The State is required to ensure only financially needy families consisting of a minor child living with a parent or other caretaker relatives receive TANF assistance. DPA employs ETs who review applications, identify income and financial resources, and make a determination whether a family is eligible to receive benefits, including the amount of the benefits. As part of verifying TANF eligibility, the State is required to coordinate data exchanges when making eligibility determinations, including, but not limited to: wage information from the State Wage Information Collection Agency, IEVS, unemployment compensation information from the Department of Labor, all available information from the Social Security Administration, and information from the United States Citizenship and Immigration Services.DPA?s Alaska Temporary Assistance manual provides ETs guidance on how to calculate income. Once the information is received, reviewed, and calculated, ETs enter the information into EIS. EIS automatically calculates the monthly benefit amount based on the eligibility factors entered. If eligibility factors are not entered accurately, benefit amounts are paid incorrectly.DPA?s Administrative Procedures Manual, Section 109 requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit-level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness of each action taken, verification used, and contacts made using the online case note screen in EIS or on a Report of Contact sheet maintained in the hard copy case files.On April 9, 2021, the USDHHS Administration for Children and Families (ACF) issued TANF Program Instruction No. TANF-ACF-PI-2021-02, which provided guidance regarding the newly established PEAF. The instructions allowed states to provide non-recurrent, short-term benefits to needy families with children and allowed states to determine the definition of ?needy? families. DPA management sent a letter to TANF recipients during May 2022 stating the division planned to issue a PEAF payment to each household who currently received TANF or received TANF during the past 12 months.Cause:According to DPA management, eligibility redeterminations were not performed because system-generated certification period extensions were granted during the public health emergency. DPA management stated a pending State plan amendment, submitted during FY 22, will allow retroactive flexibilities for eligibility redeterminations during the public health emergency. Auditors reviewed the pending State plan amendment and noted the requested flexibilities expired on August 31, 2020, which is prior to the FY 22 period under audit.Turnover, staffing shortages, and inadequate training contributed to ETs not performing and/or documenting all required components of eligibility determinations and not accurately calculating benefit amounts.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 45 CFR 206.10(a)(3)(i) requires that a decision be made promptly on applications, pursuant to reasonable State-established time standards not in excess of 45 days. PerSection 4.1 of the Alaska State Plan for TANF, dated December 31, 2020, applications are required to be processed within 30 days of receipt.Title 45 CFR 264.10 specifies states must meet the requirements of IEVS and request certain information from the Internal Revenue Service, the State Wage Information Collection Agency, the Social Security Administration, and the Immigration and Naturalization Service to perform computer match data records to verify recipient information.Pursuant to Title 45 CFR 206.10, DPA?s federally approved TANF State Plan outlines specific State requirements for applications and eligibility determinations, including:? Section 4.1 Application ? Program applicants must complete an application form in writing. To be considered complete, the application must provide all requested information and be supported by documentation the department determines necessary to establish eligibility.? Section 4.3 Reporting Requirements ? Participants must also take part in periodic reviews of the family?s situation. DPA redetermines eligibility and benefit amount based on the information provided during the reviews and any other changes that are reported between reviews.? Section 13 Family Need ? The department establishes whether a child is financially needy. Financial need is determined to exist if the family resources and income are below the need standards set by the department.Title 45 CFR 206.10(a) (9) (iii) requires that at least one face-to-face redetermination must be conducted for each case once every 12 months. However, TANF Program Instruction No. TANF-ACF-PI-2020-01 allowed for telephonic or other virtual/electronic communication platforms to be used during the COVID-19 pandemic.TANF Program Instruction No. TANF-ACF-PI-2021-02 requires the use of IEVS to determine eligibility for families who receive PEAF.Title 45 CFR 75.2 defines improper payments to include payments that were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.Effect:The State may be penalized for up to two percent of the federal grant award for failure to participate in IEVS. As a result of not redetermining eligibility during FY 22 and the other errors identified, ineligible recipients may have received benefits. Additionally, TANF benefit payments were calculated incorrectly resulting in overpayments.Questioned Costs:$138,024Recommendation:DPA?s director should improve training and monitoring of staff to ensure staff comply with TANF eligibility and document retention procedures and eligibility determinations are performed accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-033Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Auditors could not obtain reliable evidence to verify compliance with TANF?s earmarking requirement.Context:DHSS staff monitored compliance with TANF?s earmarking requirement through compiling Monthly Caseload and Benefit Summary reports from EIS data. The summary reports identify the number of TANF recipients that have received more than 60 months of benefit payments. According to DPA management, the monthly report is reviewed for accuracy.The monthly EIS data is also compiled as part of the ACF-199 report that includes the number of countable months TANF recipients used assistance. Testing of ACF-199 data found the EIS data reported in the ACF-199 was not supported by a manual count of monthly benefit payments for 11 of 30 cases tested (37 percent). Based on this testing, auditors concluded the EIS monthly caseload data was not reliable.Cause:DHSS staff review of the Monthly Caseload and Benefit Summary reports was insufficient to identify whether the data was supported. In addition, there was a system programming error in EIS causing the compilation of countable monthly benefit payments to return incorrect data.Criteria:Title 45 CFR 264.1 states that, subject to exceptions, no state may use any of its federal TANF funds to provide assistance to a family that includes an adult head-of-household or a spouse of the head-of-household who has received federal assistance for a total of five years (60 cumulative months, whether or not consecutive).Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Unreliable data impeded DPA staff?s ability to monitor compliance with federal requirements and created a risk that unallowable benefits were paid. Title 45 CFR 264.2 states TANF funding may be reduced by five percent for exceeding the 60-month limit on benefits.Questioned Costs:NoneRecommendation:DPA's director should develop procedures to ensure the monthly benefit count in EIS is accurate. Additionally, DOH's commissioner should allocate resources to correct the EIS programming error.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-035Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: ReportingCondition:Twelve of 25 TANF cases tested (48 percent) had inaccurate information reported in the ACF-199 data file.Context:The quarterly ACF-199 report is compiled monthly from information that is either entered in EIS by an ET or interfaced into EIS through the case management system. The information is transmitted to ACF in a data file. ACF uses the transmitted data to determine whether states have met the required work participation rates and to confirm the State is meeting the earmarking requirement that no more than 20 percent of families received more than 60 months of TANF assistance.Review by auditors found that several key line items for family-level and person-level data were not reported accurately in the data file that was transmitted for the ACF-199 reports for the quarters ended September 2021, December 2021, March 2022, and June 2022 (see table below).[See Schedule of Findings and Questioned Costs for chart/table.]Cause:DPA management lacked procedures for ensuring the accuracy of the information queried from EIS, which supports the ACF-199 report. The completed ACF-199 report was not reviewed for accuracy before being transmitted to ACF. Due to a cyberattack, the case management system was unavailable and work service providers were not able to upload data. DPA management could not explain the cause of the inaccurate data (items 17, 28, 44, 48, 49).Criteria:Title 45 CFR 265.3(a)(1) requires the State to collect on a monthly basis, and file on a quarterly basis, the data specified in the ACF-199 report. Title 45 CFR 265.7(a) and 45 CFR 265.4 further specify the State's quarterly ACF-199 must be complete, accurate, and filed within 45 days, or be subject to a penalty.Title 45 CFR 265.7(a) requires each state?s quarterly reports to be complete and accurate. Federal regulations further state a complete and accurate report means the reported data accurately reflect information available to the state in case records, financial records, and automated data systems.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Reporting incorrect data may impair the federal oversight agency's ability to properly oversee the program. Further, the State could be subject to a penalty of four percent of the federal grant award for each quarter the State fails to submit an accurate, complete, and timely required report.Questioned Costs:NoneRecommendation:DPA's director should implement procedures to ensure data reported on the ACF-199 is complete and accurate.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: ReportingCondition:The FFY 21 ACF-204 annual report was incomplete.Context:The State must complete and file an annual report containing information on the TANF program and the State?s maintenance of effort (MOE) programs for that year. The report filed in FY 22 did not contain all the programs for which the State claimed MOE expenditures. DPA staff could not provide evidence that an amended, complete report was filed.Cause:Due to staff turnover, DPA management could not provide an explanation as to why the ACF-204 was incomplete.Criteria:Title 45 CFR 265.9(a) requires each state to file an annual report containing information on the TANF program and the state?s maintenance of effort program(s) for that year.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Unreliable federal reporting limits transparency and may impair the federal oversight agency?s ability to properly oversee the program. According to 45 CFR 262.1(a)(3), the State could be subject to a penalty of four percent of the federal grant award for each quarter the State fails to submit an accurate, complete, and timely required report.Questioned Costs:NoneRecommendation:DPA's director should strengthen reporting procedures to ensure the ACF-204 report is complete and includes all programs for which the State claimed MOE expenditures.Views of Responsible Officials:DOH partially agrees with the finding. DPA submitted a complete copy of the report into the ACF system, which was confirmed via email by the federal representative. However, due to limitations within ACF?s system, which is out of the control of the Division, the supporting documents that were gathered to verify this lacked certain information.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states a complete FFY 21 ACF-204 report was submitted into the ACF system, which was confirmed via email by the federal representative; however, auditors were not provided a copy of the federal representative?s email confirmation, or other support to verify a complete report was submitted, despite multiple requests.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Material WeaknessAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEAApplicable Compliance Requirement: Period of PerformanceCondition:Auditors could not obtain sufficient and appropriate evidence to verify compliance with LIHEAP?s period of performance requirements.Context:DPA staff did not maintain evidence to demonstrate compliance with period of performance requirements.Cause:According to DPA staff, employee turnover and inadequate procedures resulted in the lack of documentation supporting compliance with LIHEAP period of performance requirements. In addition, accounting structures were not in place to differentiate between normal project period expenditures or obligations and expenditures related to carryover of the FFY 21 award.Criteria:Title 45 CFR 96.14(a)(2) establishes the following time period for obligation and expenditure of LIHEAP grant funds: beginning with allotments for fiscal year 1994, a maximum of 10 percent of the amount payable to a grantee may be held available for the next fiscal year. No funds may be obligated after the end of the fiscal year following the fiscal year for which they were allotted.Title 45 CFR 75.303(a), requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Effect:Noncompliance with the LIHEAP period of performance requirement could result in the federal awarding agency imposing conditions or taking corrective actions, including additional requirements or withholding/terminating funds.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement procedures and modify accounting structures to ensure compliance with LIHEAP period of performance requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Material Weakness, NoncomplianceAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEA, 2101AKEC6Applicable Compliance Requirement: ReportingCondition:Auditors could not obtain sufficient and appropriate evidence to verify accuracy of the data reported in the FFY 21 LIHEAP Performance Data Form and the FFY 21 Annual Report on Households Assisted by LIHEAP. In addition, the SF-425 LIHEAP financial report for the FFY 21 grant award misreported two of six key line items. One line was misstated by $1,189,130, and the second by $689,186.Context:LIHEAP grant awards include reporting requirements for financial, performance, and special reports. In FY 22 there were no established procedures for LIHEAP reporting to dictate the procedures necessary to compile data, and to create, review and submit required reports.Cause:According to DPA staff, documentation was not retained to support the data reported in the FFY 21 performance and special reports due to staff turnover and a lack of procedures. DPA staff review of the SF-425 was insufficient to identify incorrect data.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.341 requires financial reporting be collected with the frequency required by the terms and conditions of the federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting.The Low-Income Home Energy Assistance Act of 1981 (Title XXVI of the Omnibus Budget Reconciliation Act of 1981, Public Law 97-35, as amended) section 2610 requires the collection of data, including information concerning home energy consumption, the amount, cost and type of fuels used for households eligible for assistance under this title, the type of fuel used by various income groups, the number and income levels of households assisted by this title, the number of households that received such assistance and include one or more individuals who are 60 years or older or disabled or include young children, and any other information determined to be reasonably necessary to carry out the provisions of this title. Collection of this data is facilitated through the LIHEAP performance data form.Title 45 CFR 96.82 requires the State to submit data on the number and income levels of households that apply and the number that are assisted with funds for the 12-month period corresponding to the federal fiscal year (October 1?September 30) preceding the fiscal year for which funds are requested. The data shall be reported separately for LIHEAP heating, cooling, crisis, and weatherization assistance.Effect:Auditors were unable to verify the accuracy of data reported in the performance and special reports. Inaccurate federal reporting may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:The DPA and DFMS directors should work together to develop and implement procedures to ensure compliance with LIHEAP financial, performance, and special reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.568 Low-Income Home Energy Assistance Program (LIHEAP)Federal Award Number: 2101AKLIEAApplicable Compliance Requirement: EligibilityCondition:Three (5 percent) of 60 LIHEAP applicant case files tested had eligibility errors.Context:The audit tested a sample of 60 applications for heating assistance. Auditors identified three instances of eligibility noncompliance. Two were for incomplete applications determined eligible for benefits. One was for an eligible application that was denied incorrectly based on income level.Cause:According to DPA staff, the case review quality control process was not completely in place during FY 22. Case reviews were suspended for all of FY 22 for experienced eligibility technicians (ET) and suspended for three months for inexperienced ETs.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.The DPA Administrative Procedures Manual requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness and accuracy of the determination.Title 42 U.S. Code 8624(b)(2)(B) requires states make payments to households with incomes which do not exceed the greater of (i) an amount equal to 150 percent of the poverty level for such State; or (ii) an amount equal to 60 percent of the State median income; except that a State may not exclude a household from eligibility in a fiscal year solely on the basis of household income if such income is less than 110 percent of the poverty level for such State, but the State may give priority to those households with the highest home energy costs or needs in relation to household income.Effect:Ineligible recipients received benefits and an individual that qualified for program benefits was denied. The errors resulted in questioned costs totaling $6,490. Questioned costs for the population are projected to be $664,400 based on the dollar of noncompliance observed in the sample projected over the tested population.Questioned Costs:$6,490Recommendation:DPA?s director should strengthen internal controls by reinstituting a robust quality control case review process to ensure LIHEAP eligibility determinations are accurate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEAApplicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Internal controls over FY 22 LIHEAP earmarking requirements for planning and administrative costs were ineffective.Context:Auditors found that DPA staff complied with the percent limits for the FY 22 LIHEAP earmarking requirements, however, DPA lacked procedures to reduce the risk of noncompliance. Internal controls are an integral part of ensuring federal programs are managed according to program requirements. An effective internal control system helps an entity adapt to shifting environments, evolving demands, changing risks, and new priorities.Cause:According to DPA program management, the lack of procedures for the LIHEAP earmarking requirement was the result of staff turnover and a lack of training regarding internal control requirements over federal programs.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The lack of procedures for the LIHEAP earmarking requirements could result in unallowable expenditures.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement procedures and improve staff training to ensure compliance with LIHEAP earmarking requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-023Federal Awarding Agency: U.S. Department of Education (USED)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 84.425D Elementary and Secondary School Emergency Relief Fund (ESSER) ? COVID-1984.425U American Rescue Plan ? Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: ReportingCondition:FY 22 Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for ESSER and ARP ESSER did not occur for 72 subawards.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). The FFATA Subaward Reporting System (FSRS) is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards. According to DEED procedures, on a monthly basis DEED staff prepares a submission to FSRS to identify initial subaward obligations greater than $30,000. This submission is reviewed and entered into FSRS. The FSRS printout is compared to the FSRS submission to verify the data was accurately captured.Auditors determined DEED staff did not retain documentation of the FSRS printout or verify the input was accurate. Auditors tested all subawards issued during FY 22 for the ESSER and ARP ESSER subprograms. Of the 75 subawards tested, 72 subawards were not reported, including 48 ARP ESSER subawards totaling $319,460,805 and 24 ESSER subawards totaling $8,854,035.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:The ARP ESSER funding was established in the State?s accounting system as a capital appropriation. Subawards issued under the ARP ESSER appropriation were not reported to FSRS due to a flaw in DEED?s FFATA reporting tool, which was not designed to capture capital appropriations. According to DEED management, resolving prior and current year issues through the FFATA help desk has been difficult. As a result, DEED discontinued FFATA reporting after the April 2022 submission.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEED?s Division of Administrative Services (DAS) director should ensure FFATA reporting procedures are followed and that the FFATA reporting tool is updated to ensure subaward reports are complete.Views of Responsible Officials:The department partially agrees with Finding 2022-026. The department agrees with the count of 72 separate awards not being reported, however the department disagrees with the specific dollar amount listed as ESSER II subawards were not reported. The amount listed is missing $5,483. This amount was awarded to a school district that also received ESSER II SEA Reserve funding under the same grant award and the FFATA reporting system has no mechanism to differentiate between mandatory funding and SEA Reserve funding. Per 2 CFR ? 170.220(b) and FFATA guidance documents, if an award increases to greater than the $30,000 reporting threshold, the full amount of the award must be reported, not just the portion that exceeded the threshold.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DEED management stated the finding amount is missing $5,483. A subaward to the school district totaling $61,165 was included in the finding. Subsequently, an additional subaward was made totaling $5,483, which was not included in the finding because it did not meet the threshold for reporting under Title 2 Code of Federal Regulations Part 170 Appendix A.
Federal Awarding Agency: U.S. Department of Education (USED)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425F HEERF Minority Serving Institution (MSI) PortionFederal Award Number: P425L200248Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition and Context:During the testing of the University of Alaska Fairbanks (UAF) MSI expenditures there was an observed instance, among the forty that were tested, of an interdepartmental transaction being claimed as a reimbursable expenditure. Students from the MacClean House dorm, which is operated by the UAF Residence Life unit, were required to quarantine in the MacLean House dorm, which is operated by the College of Rural and Community Development (CRCD) unit. This resulted in the UAF Residence Life unit paying the CRCD unit for the students' housing costs. This transaction was included as a reimbursable expenditure, despite having a net $0 impact on the income statement.Cause:UAF had not considered the possibility that interdepartmental transactions could be disallowed. Due to a lack of authoritative guidance at the time, the campus relied on the Frequently Asked Questions (FAQ) to determine allowability which made no mention of lost revenue related to interdepartmental transactions.Criteria:Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. In addition, Per Uniform Guidance 200.34 expenditures on the accrual basis may be: cash disbursements for direct charges for property and services, the value of third-party in-kind contributions applied, and the net increase or decrease in the amounts owed by non-federal entity.Effect:The University claimed costs that were not allowable.Questioned Costs:$2,100.97 - ALN 84.425F - Grant Award P425L200248Recommendation:We recommend the University of Alaska Fairbanks should not claim interdepartmental expenditures as institutional expenditures.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-023Federal Awarding Agency: U.S. Department of Education (USED)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 84.425D Elementary and Secondary School Emergency Relief Fund (ESSER) ? COVID-1984.425U American Rescue Plan ? Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: ReportingCondition:FY 22 Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for ESSER and ARP ESSER did not occur for 72 subawards.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). The FFATA Subaward Reporting System (FSRS) is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards. According to DEED procedures, on a monthly basis DEED staff prepares a submission to FSRS to identify initial subaward obligations greater than $30,000. This submission is reviewed and entered into FSRS. The FSRS printout is compared to the FSRS submission to verify the data was accurately captured.Auditors determined DEED staff did not retain documentation of the FSRS printout or verify the input was accurate. Auditors tested all subawards issued during FY 22 for the ESSER and ARP ESSER subprograms. Of the 75 subawards tested, 72 subawards were not reported, including 48 ARP ESSER subawards totaling $319,460,805 and 24 ESSER subawards totaling $8,854,035.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:The ARP ESSER funding was established in the State?s accounting system as a capital appropriation. Subawards issued under the ARP ESSER appropriation were not reported to FSRS due to a flaw in DEED?s FFATA reporting tool, which was not designed to capture capital appropriations. According to DEED management, resolving prior and current year issues through the FFATA help desk has been difficult. As a result, DEED discontinued FFATA reporting after the April 2022 submission.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEED?s Division of Administrative Services (DAS) director should ensure FFATA reporting procedures are followed and that the FFATA reporting tool is updated to ensure subaward reports are complete.Views of Responsible Officials:The department partially agrees with Finding 2022-026. The department agrees with the count of 72 separate awards not being reported, however the department disagrees with the specific dollar amount listed as ESSER II subawards were not reported. The amount listed is missing $5,483. This amount was awarded to a school district that also received ESSER II SEA Reserve funding under the same grant award and the FFATA reporting system has no mechanism to differentiate between mandatory funding and SEA Reserve funding. Per 2 CFR ? 170.220(b) and FFATA guidance documents, if an award increases to greater than the $30,000 reporting threshold, the full amount of the award must be reported, not just the portion that exceeded the threshold.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DEED management stated the finding amount is missing $5,483. A subaward to the school district totaling $61,165 was included in the finding. Subsequently, an additional subaward was made totaling $5,483, which was not included in the finding because it did not meet the threshold for reporting under Title 2 Code of Federal Regulations Part 170 Appendix A.
Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 25 daily SNAP Electronic Benefit Transfer (EBT) reconciliations found that six (24 percent) lacked evidence of review and four (16 percent) included discrepancies that were not followed up on.Context:A state must have a system in place to reconcile, on a daily basis, all of the funds entering into, exiting from, and remaining in the system each day with the state?s US Treasury benefit account, and the EBT contractor?s (Fidelity National Information Services) records. States must also have systems in place to reconcile retailer credit activity as reported into the banking system to client transactions maintained by the processor and to the funds drawn down from the EBT benefit account with the US Treasury. The reconciliation process ensures that a state only draws federal funds for authorized transactions.The sample population totaled 249 daily reconciliations performed by DPA staff during FY 22, of which 25 were selected for testing. Auditors verified that retailer credit activity reconciled to SNAP client transactions, to its issuance files of posting to recipient accounts with the EBT contractor and to posting to and drawdown activity from the State?s benefit account with the US Treasury. The four reconciliations that included discrepancies were resolved over the subsequent day?s reconciliations. However, there was no documentation identifying the cause of the discrepancies or evidence demonstrating follow-up.Cause:According to DPA management, supervisory reviews of the daily reconciliations were not performed April through June 2022 due to significant staff turnover.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 7 CFR 274.4(a) requires that State agencies shall account for all issuance through a reconciliation process. The EBT system must provide reports and documentation pertaining to reconciliation. Reconciliations must be conducted and records kept as follows:? Verification of retailer's credits against deposit information entered into the automated clearinghouse network.? Reconciliation of total funds entered into, exiting from, and remaining in the system each day.Effect:Inconsistent review of the EBT reconciliations and lack of discrepancy resolution increases the risk of unidentified processing errors. Account balance inconsistencies between the three systems impedes the State?s ability to ensure all SNAP benefits are adequately reconciled and accounted for. States are responsible for efficiently and effectively administering SNAP in accordance with federal laws, regulations, and FNS approved Plan of Operations. A determination by FNS that the State has failed to comply with any of these provisions may result in a suspension or disallowance of the federal share of the State?s administrative funds.Questioned Costs:NoneRecommendation:DOH?s DPA director should ensure review procedures are followed and staff are appropriately trained to ensure monthly reconciliation packets are reviewed for accuracy and completeness, and discrepancies are properly identified and resolved.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Agriculture (USDA)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 Supplemental Nutrition Assistance Program (SNAP) ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Costs PrinciplesSpecial Tests and ProvisionsCondition:The Division of Public Assistance (DPA) Eligibility Information System (EIS) did not automatically cut off households from receiving SNAP benefits at the end of the certification period during FY 22.Context:A state must certify each eligible household for a definite period of time. Alaska households are certified for a six-month period. The first month of the certification period begins in the first month for which the household is determined eligible to participate. The State is required by federal law to ensure EIS automatically cuts off participation for households that have not been recertified at the end of the certification period.In response to the COVID-19 disaster, USDA?s Food and Nutrition Service (FNS) issued COVID-19 waivers and flexibilities, which included extending SNAP certification periods. In a letter dated April 30, 2021, FNS allowed states to automatically extend benefit certification periods for up to six months. In a subsequent letter dated December 8, 2021, FNS clarified the April 30, 2021, letter directing that state agencies may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. Consecutive certifications, or back-to-back six-month extensions were not allowable, as it may exceed FNS?s waiver authority provided by the Families First Coronavirus Act and reduce the opportunity for a state to obtain a full understanding of a household?s circumstances. Furthermore, the FNS letter made various recommendations for reducing the backlogs that may occur when states provide certification period extensions.Cause:The EIS control to automatically cut off households from receiving SNAP benefits at the end of the certification period was disabled based on DPA management?s misinterpretation of FNS guidance regarding certification period extensions. DPA management?s erroneous interpretation and lack of response to FNS?s clarifying guidance led eligibility technicians to not perform recertifications of SNAP households in FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 273.10(f) requires the State to certify each eligible household for a definite period of time. Alaska households are certified for a six-month period per Alaska?s approved SNAP Plan of Operation.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.USDA FNS SNAP guidance, issued December 8, 2021, titled, Extension of SNAP COVID-19 Administrative flexibilities January 2022 and Beyond, provided that States may only extend certification periods for up to six months from the initial expiration date assigned at the last certification or recertification. The guidance reiterated that the State should not extend certification periods consecutively, as it reduces the opportunities the State has to obtain a full understanding of a household?s circumstances and make necessary adjustments.Effect:The lack of periodic eligibility recertifications increased the risk that ineligible recipients received SNAP benefits. State agencies are responsible for preventing loss of federal funds in the certification of households. If FNS makes a determination the State was negligent in the certification of households, FNS is authorized to bill the State for an amount equal to the benefits issued as a result of the negligence. Furthermore, the utilization of broad-based certification period extensions may result in significant increases in case processing backlogs once the extensions expire and the State transitions back to regular operations.Questioned Costs:AL 10.551: IndeterminateRecommendation:DOH?s commissioner and DPA's director should reactivate the system control that automatically cuts off beneficiaries outside of the certification period and take timely action to recertify SNAP recipients.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesFederal Awarding Agency: USDAImpact: Material Weakness, Material NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 51 SNAP recipient cases to verify the accuracy of EIS benefit calculations found five (10 percent) were incorrect. Testing of 26 SNAP recipient cases to verify the adequacy of case information stored in EIS and the DHSS?s document management system, ILINX, found 11 (42 percent) had insufficient information in ILINX or inaccurate data input into EIS, and four (15 percent) recipients? applications or report of changes were not processed within federally required timeframes.Context:The State is required to ensure only eligible households receive supplemental nutrition assistance. Benefit amounts are calculated based on household size, income, and other financial resources of all qualifying members of a household less specific allowable deductions. The State is required to ensure its automated data processing systems: accurately and completely process and store all case file information for eligibility determinations and benefit calculations; automatically cuts off households at the end of a certification period unless recertified; and provides the data necessary to meet federal issuance and reconciliation reporting requirements.DPA eligibility technicians (ET) review applications, verify income and resources, and make a determination whether a household is eligible to receive benefits. ETs obtain and upload source documentation into ILINX, and manually update EIS with information from source documentation. As part of determining benefit eligibility, the State is required to coordinate the exchange of data with other agencies such as the federal Social Security Administration, State employment security agency, and current employers to verify the household?s identity, income, resources, and other eligibility criteria. ET actions taken, verifications performed, and contacts made are recorded using the EIS?s case note screen. Source documentation supporting the eligibility determination is retained in ILINX. To help ensure the accuracy and completeness of EIS information, DPA conducts training and requires supervisors to perform quality control reviews.The EIS legacy system relies on manual processes to adequately support the eligibility and benefit determinations, and ensure the determinations are accurate. The audit identified multiple errors including:? Five recipients? income or financial resources were not adequately supported or verified by the ET as evidenced by information stored in ILINX.? Six recipients? EIS-calculated payments were not adequately supported by case file information stored in ILINX.? Four recipients? applications and/or report of changes were not processed within the allowable time period.? Five recipients received incorrect benefit amounts.Cause:Human error by the ETs during application processing was the primary cause of the deficiencies. According to DPA management, pandemic related monthly emergency allotment benefits added to each recipient?s EIS-calculated benefit required extensive manual inputs, which increased workloads and impacted ETs? ability to accurately process applications. Furthermore, due to competing priorities, no quality control reviews were performed during FY 22.Criteria:Title 7 CFR 272.10(b) requires the State to use an automated data processing system for SNAP. The system is to be used to determine eligibility and calculate benefits or validate eligibility workers? calculations by processing and storing all casefile 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. Also, the system must be used to redetermine or revalidate eligibility and benefits based on notices of change in households' circumstances.Title 7 CFR 272.8(a)(1) requires the State maintain and use an income and eligibility verification system to request wage and benefit information from various agencies and use that information in verifying eligibility for and the amount of SNAP benefits due to eligible households.Title 7 CFR 273.2 (f)(6) requires that case files be documented to support eligibility, ineligibility, and benefit level determinations. Documentation shall be in sufficient detail to permit a reviewer to determine the reasonableness and accuracy of the determination.Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The accuracy of SNAP benefit calculations is reliant on the case file information entered into and stored in DPA?s automated data processing systems. Inadequate or unsupported case file information increases the risk of incorrect or ineligible benefits. The deficiencies resulted in three SNAP recipients receiving incorrect benefits totaling $2,636 in overpayments and two recipients with $702 in underpayments.Questioned Costs:AL 10.551: $2,636Recommendation:DPA?s director should increase staff training and quality control reviews to help ensure procedures are followed for calculating benefits and retaining SNAP documentation, including the documentation to support compliance with verification of income through required data exchanges.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDAImpact: Significant Deficiency, NoncomplianceAL Number and Title: 10.551, 10.561 SNAP ClusterFederal Award Number: 21AK3505029230, 22AK35050292301Applicable Compliance Requirement: Special Tests and ProvisionsCondition:Testing of 25 daily SNAP Electronic Benefit Transfer (EBT) reconciliations found that six (24 percent) lacked evidence of review and four (16 percent) included discrepancies that were not followed up on.Context:A state must have a system in place to reconcile, on a daily basis, all of the funds entering into, exiting from, and remaining in the system each day with the state?s US Treasury benefit account, and the EBT contractor?s (Fidelity National Information Services) records. States must also have systems in place to reconcile retailer credit activity as reported into the banking system to client transactions maintained by the processor and to the funds drawn down from the EBT benefit account with the US Treasury. The reconciliation process ensures that a state only draws federal funds for authorized transactions.The sample population totaled 249 daily reconciliations performed by DPA staff during FY 22, of which 25 were selected for testing. Auditors verified that retailer credit activity reconciled to SNAP client transactions, to its issuance files of posting to recipient accounts with the EBT contractor and to posting to and drawdown activity from the State?s benefit account with the US Treasury. The four reconciliations that included discrepancies were resolved over the subsequent day?s reconciliations. However, there was no documentation identifying the cause of the discrepancies or evidence demonstrating follow-up.Cause:According to DPA management, supervisory reviews of the daily reconciliations were not performed April through June 2022 due to significant staff turnover.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 7 CFR 274.4(a) requires that State agencies shall account for all issuance through a reconciliation process. The EBT system must provide reports and documentation pertaining to reconciliation. Reconciliations must be conducted and records kept as follows:? Verification of retailer's credits against deposit information entered into the automated clearinghouse network.? Reconciliation of total funds entered into, exiting from, and remaining in the system each day.Effect:Inconsistent review of the EBT reconciliations and lack of discrepancy resolution increases the risk of unidentified processing errors. Account balance inconsistencies between the three systems impedes the State?s ability to ensure all SNAP benefits are adequately reconciled and accounted for. States are responsible for efficiently and effectively administering SNAP in accordance with federal laws, regulations, and FNS approved Plan of Operations. A determination by FNS that the State has failed to comply with any of these provisions may result in a suspension or disallowance of the federal share of the State?s administrative funds.Questioned Costs:NoneRecommendation:DOH?s DPA director should ensure review procedures are followed and staff are appropriately trained to ensure monthly reconciliation packets are reviewed for accuracy and completeness, and discrepancies are properly identified and resolved.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Department of Transportation (USDOT)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: VariousApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Four of 12 consultants? indirect cost rates (33 percent) were incorrect in eight professional service agreements reviewed.Context:If an indirect cost rate has not been established by a federal cognizant agency, DOTPF staff must evaluate a consultant?s indirect cost rate and calculate an appropriate rate.Consultants submit financial information to DOTPF?s Internal Review section where staff perform an audit to establish an audited indirect cost rate. The audited indirect cost rate is sent to a consultant who either accepts or rejects the audited rate. Once a consultant accepts the rate, the signed certificate of indirect cost rate is forwarded to DOTPF?s central region procurement staff for dissemination to other regional procurement offices for inclusion in the procurement process. Contracts must be amended to reflect the newly approved rate.Cause:DOTPF lacked adequate procedures to ensure contracts were amended to reflect the audited rate when indirect cost rate certifications were received by regional offices.Criteria:Title 23 CFR 172.11(b)(1) requires indirect cost rates to be updated on an annual basis in accordance with the consultant's annual accounting period and in compliance with the federal cost principles. Once an indirect cost rate is accepted, contracting agencies must apply such indirect cost rates for the purposes of contract estimation, negotiation, administration, reporting, and contractor payments. A consultant's accepted indirect cost rate for its one-year applicable accounting period must be applied to contracts.Title 2 CFR 303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Effect:Incorrect indirect cost rates result in underpayments or overpayments to consultants.Questioned Costs:NoneRecommendation:DOTPF?s contracting officer should improve procedures to ensure contracts are updated annually to reflect a consultant?s audited indirect cost rate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDOTImpact: Significant Deficiency, NoncomplianceAL Number and Title: 20.205, 20.219, 20.224 HPCCFederal Award Number: 0657(0003)Applicable Compliance Requirement: Special Tests and ProvisionsCondition:One of five construction projects (20 percent) tested did not have a required value engineering (VE) analysis performed.Context:State transportation departments are required to ensure that a VE analysis is performed on projects that are located on the national highway system (NHS) with an estimated total project cost of $50 million or more that utilize federal highway funding; bridge projects located on the NHS with an estimated total cost of $40 million or more that utilize federal highway program funding; and any other projects that the Federal Highway Administration (FHWA) determined to be appropriate.DOTPF?s VE program is overseen by the State VE coordinator; however, identifying, tracking, and monitoring the VE analysis of projects is a coordinated effort between regional VE coordinators and project managers. VE data is forwarded to the State VE coordinator who prepares a schedule of projects with VE analysis, including the number of approved project recommendations, and forwards the schedule to FHWA.Cause:DOTPF?s VE program policies and procedures did not require the State VE coordinator to monitor regional VE coordinators to ensure VE analyses were conducted on all applicable projects.Criteria:Title 23 CFR 627.5(a) requires a VE analysis be conducted prior to the completion of the final design on each applicable project that utilizes federal-aid highway funds.Title 23 CFR 627.7(a)(5) requires the State?s VE program to establish and document policies, procedures, and controls to ensure a VE analysis is conducted.Title 23 CFR 627.7(c) requires the State to designate a VE program coordinator to promote and advance VE program activities and functions. The VE coordinator?s responsibilities should include establishing and maintaining the VE policies and procedures; ensuring VE analyses are conducted on applicable projects; and monitoring, assessing, and reporting on the VE program and project reviews.Effect:Projects without a VE analysis could result in unrealized cost savings and/or technology advancements, and safety improvements not being implemented.Questioned Costs:NoneRecommendation:DOTPF?s Design and Engineering Services Division director should revise the VE policy and procedures to require the State VE coordinator monitor all applicable projects to ensure a VE analysis is conducted.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-029Federal Awarding Agency: United States Department of the Treasury (USTreasury)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 21.019 Coronavirus Relief Fund (CRF) ? COVID-19Federal Award Number: SLT0031, SLT0073Applicable Compliance Requirement: ReportingCondition:DHSS staff used inconsistent methods of accounting when reporting federal expenditures for the CRF program on FY 22 quarterly financial progress reports. As a result, amounts reported were inaccurate.Context:Each prime recipient of the CRF is required by Treasury to submit quarterly financial progress reports that identify COVID-19 related costs incurred during the reported period. The progress reports detail the total amount of CRF payments the prime recipient received from Treasury; the amount of funds received that were expended or obligated for each project or activity; all projects and activities for which funds were expended or obligated; and information on any loans issued, contracts and grants awarded, transfers made to other government entities, and direct payments made by the prime recipient in excess of $50,000. Aggregated information was required for direct payments made by the prime recipients that were less than $50,000. Reports must be submitted through the federal GrantSolutions portal and be supported by the accounting records.The CRF program was primarily administered for the State of Alaska by the Department of Commerce, Community, and Economic Development (DCCED) and DHSS. The CRF program administered by DHSS during FY 22 included issuing awards to subrecipients for non-profit support, transfers to other State agencies, and other initiatives related to the public health emergency. Subawards and transfers were issued as advances.DHSS?s reporting data was prepared for submission by its DFMS staff. When ready for submission, the complete reports were certified by the Department of Administration?s state accountant. DHSS reported CRF expenditures on either the cash or modified accrual basis, depending upon the activity being reported. For example, DHSS used the modified accrual basis to report DHSS?s public health related expenditures, but used the cash basis to report CRF monies it transferred to other State agencies. Using the cash basis of accounting resulted in DHSS staff reporting the amount of CRF monies advanced instead of the amount expended on allowable activities. Auditors noted that the DCCED portion of the CRF reports were prepared using the modified accrual basis of accounting.Beginning in FY 23, DHSS was split into two departments: DOH and DFCS.Cause:Expenditures were misreported due to a misunderstanding of CRF reporting requirements. DHSS review procedures were insufficient to ensure the accuracy and consistency of the information prior to inclusion in the State?s quarterly CRF report.Criteria:Per Treasury?s Office of Inspector General Memo OIG-CA-20-028, Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and Recordkeeping (Revised), Frequently Asked Question #32, a prime recipient must report CRF expenditures on the accrual basis of accounting, unless the prime recipient?s traditional practice is to report on a cash basis of accounting for all its financial reporting.Effect:Inaccurate federal reporting reduces transparency and may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:DOH and DFCS?s DFMS directors should coordinate efforts to improve training and strengthen procedures to ensure federal reports are accurate and prepared using the appropriate basis of accounting.Views of Responsible Officials:Management partially agrees with the finding. The written procedures were developed in collaboration with both OMB and the Division of Finance in June of 2020 to comply with the Treasury Office?s guidance for federal reporting. The department reported the amounts advanced in accordance with these procedures and two emails from June 2020 were previously provided supporting the arrangement agreed upon specific to federal reporting.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management states the agency followed procedures developed to comply with USTreasury guidance for federal reporting. However, as noted in the finding, staff did not report in accordance with USTreasury guidance that required the modified accrual basis of accounting for quarterly financial reports. Additional training may be necessary to ensure accounting staff can effectively identify and apply accounting principles.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.019 Coronavirus Relief Fund (CRF) ? COVID-19Federal Award Number: SLT0031, SLT0073Applicable Compliance Requirement: Subrecipient MonitoringCondition:DCCED staff did not issue timely management decisions for three of the four CRF single audit findings requiring follow-up during FY 22.Context:Federal regulations require pass-through entities to issue a management decision for audit findings relating to federal awards provided to subrecipients. The management decision must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the adequacy of the subrecipient?s proposed corrective actions to address the findings.Of the three untimely management decisions, two were issued past the six month requirement and one has not been issued as of the end of FY 22. For the two management decisions issued past the six month requirement, one was two months and the other was 11 months past the requirement as of the end of FY 22.Cause:Due to staff oversight, DCCED?s single audit procedures did not require management decisions to be issued within the six month requirement. Further, the procedures did not require a supervisory review.Criteria:Title 2 CFR 200.332(d)(3) states that pass-through entities? monitoring of subrecipients must include issuing a management decision for audit findings that relate to federal awards provided to subrecipients.Title 2 CFR 200.521(d) states a management decision must be issued within six months of acceptance of the audit report by the federal audit clearinghouse.Effect:The lack of timely management decisions may result in subrecipients not taking appropriate corrective action. Noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements.Questioned Costs:NoneRecommendation:DCCED?s DAS director should revise single audit procedures to ensure management decisions are issued within six months. Further, procedures should include adequate supervisory review.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USTreasuryImpact: Significant Deficiency, NoncomplianceAL Number and Title: 21.027 SLFRFFederal Award Number: SLFRP0006, SLFRP2633, SLFRP4544Applicable Compliance Requirement: Subrecipient MonitoringCondition:For one of two subrecipients, DCCED staff did not identify all federally required information on the FY 22 SLFRF subaward or conduct a risk assessment.Context:DCCED entered into a contract with the Juneau Economic Development Council (JEDC) to assist in administering the Grants to Tourism and Other Businesses for the Negative Economic Impacts portion of the SLFRF program. Under the contract, JEDC determined eligibility, sent payments to eligible grantees, and provided disbursement reports to DCCED for monitoring. This activity created a subrecipient relationship.The audit reviewed the form used to contract with JEDC and determined that none of the federally required information was included on the form. Additionally, the audit found that a risk assessment was not conducted for JEDC.Cause:Due to staff turnover in the program manager position, JEDC was not initially identified as a subrecipient since a contract was used instead of a grant award document.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.332 requires the State to perform annual risk assessments and ensure every subaward includes the required information at the time of the subaward.Effect:Absent risk assessments, subrecipients may not be sufficiently monitored, increasing the risk of inappropriate use of SLFRF monies and noncompliance with federal laws. Not providing the required information in the subaward document increases the risk of subrecipient noncompliance with the terms and conditions of the federal award and could result in the State repaying SLFRF monies to the federal government.Questioned Costs:NoneRecommendation:DCCED?s DAS director should strengthen training of program manager staff to ensure compliance with all subrecipient monitoring requirements applicable to federally funded subawards.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: United States Environmental Protection AgencyImpact: Significant Deficiency, NoncomplianceAL Number and Title: 66.202 Congressionally Mandated ProjectsFederal Award Number: 01J81201, 01J96801Applicable Compliance Requirement: ReportingCondition:Testing of five subawards subject to Federal Funding Accountability and Transparency Act (FFATA) requirements had obligated amounts incorrectly reported to the FFATA Subaward Reporting System (FSRS), or not reported at all.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). FSRS is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards.The audit tested all five subawards totaling $1,477,260 issued to five Remote Maintenance Worker (RMW) subrecipients. RMW subawards, which have performance periods on a state fiscal year basis, are funded by two federal awards with consecutive award periods. Once the earlier federal award period has ended, DEC staff obligates funds from the new federal award for the remaining subaward amounts that have not been spent.Amounts for the five subawards tested had incorrect amounts reported to the FSRS. When DEC staff obligated funds from the new federal award, the obligated amounts were not reported to the FSRS. DEC staff made the corrections in the FSRS after auditors brought the errors to their attention.Cause:Per DEC staff, DEC lacks formal procedures for FFATA reporting.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEC?s Division of Water director should implement written procedures to ensure all subawards subject to FFATA reporting are entered into the FSRS accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.027A Special Education Grants to States84.027X Special Education Grants to States ? COVID-1984.173A Special Education Preschool Grants84.173X Special Education Preschool Grants ? COVID-19Federal Award Number: H027A210016; H027X210016; H173A210019; H173X210019Applicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Twenty-one of 53 LEAs received FY 22 Special Education (SPED) subgrant allocations that were not calculated in accordance with federal regulations.Context:The federal SPED grant award includes a summary table that directs the allocation of amounts for various funding categories, such as maximum amounts available for state administration and state-level activities. Based on funding amounts found on the summary table, DEED staff utilized a spreadsheet to calculate payments to be distributed to each LEA. Along with calculating a base payment subject to criteria set in Title 34 CFR ? 300.705(b)(1) & (2), DEED staff calculated an allocation of all remaining funds to be disbursed to LEAs based on criteria set out in Title 34 CFR ? 300.705(b)(3). Per this criteria, 85 percent of the remaining funds must be based on an LEA?s count of students enrolled in elementary and secondary schools, and the remaining 15 percent is based on a count of children living in poverty.Auditors identified that two of the seven LEAs selected for testing had improper allocation amounts. Expanded testing identified that a total of 21 LEAs had spreadsheet formulas that referenced a different LEA?s poverty-child count.Cause:Due to human error, the FY 22 SPED allocation spreadsheet contained an incorrect formula. Supervisory review procedures were insufficient to detect the error.Criteria:Title 2 CFR ? 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 32 CFR ? 300.705(b)(3) requires 85 percent of any remaining funds to be allocated to LEAs based on the relative number of children enrolled in public and private elementary schools and secondary schools within an LEA?s jurisdiction. The remaining 15 percent is allocated based on the relative number of children living in poverty.Effect:The formula error and inadequate review procedures resulted in overpayments to nine LEAs totaling $357,269, with equivalent offsetting underpayments to 12 LEAs.Questioned Costs:Assistance Listing (AL) 84.027A: $270,805AL 84.027X COVID-19: $86,464Recommendation:DEED?s DAS director should improve procedures for reviewing the calculation of SPED allocations to LEAs. Additionally, the DAS director should work with the affected LEAs to correct the erroneous payments.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Cash ManagementCondition and Context:During the testing of the outstanding Title IV student check listing we observed nine instances of stale checks at the University of Alaska Southeast (UAS) and three stale checks at UAF that were aged greater than 240 days and not returned to the Department of Education.Cause:Staffing issues in the student financial aid office at the UAS and UAF campuses have made it difficult for the student financial aid departments to perform their monthly review of uncashed checks in a timely manner. The delays in this process caused several instances of outstanding checks to age beyond 240 days.Criteria:The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:Funds are not returned to the Department of Education in a timely manner.Questioned Costs:NoneRecommendation:UAS and UAF should continue working with the Statewide Office of Finance and Accounting to better enforce the monthly review of uncashed checks policy.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.007, 84.033, 84.063, 84.268, 84.379 Student Financial Assistance ClusterFederal Award Number: P063P210010Applicable Compliance Requirement: Special Tests and ProvisionsCondition and Context:The enrollment effective date reported to the National Student Loan Database System (NSLDS) for five of the ten sampled students from the UAS campus was incorrect and did not match the correct last dates of attendance on file in the institution?s records.Cause:At the UAS campus, there is a process that is run by the registrar for unofficial withdrawals at the end of every semester that overrides the correct institutional last date of attendance with the last date of the semester. This incorrect date is then reported to the Clearinghouse and ultimately NSLDS.Criteria:The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student?s enrollment status, the effective date of the status, and an anticipated completion date. Additionally, 2 CFR 200.303 states that nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements.Effect:UAS was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans.Questioned Costs:NoneRecommendation:We recommend that UAS work with the campus registrar?s office to develop an alternative process that will enable the student financial aid office to review and correct the last dates of attendance prior to being reported to the Clearinghouse.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: U.S. Department of Health and Human Services (USDHHS)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Federal Award Number: 6 NU50CK000509-01-06Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Seven of 25 timesheets that charged FY 22 personal services to the ELC program were not supported in compliance with federal requirements.Context:The audit tested a sample of 25 timesheets and identified seven instances of noncompliance. Four errors were personal and holiday leave charged to the grant award when the timesheets did not indicate time worked on the ELC program. Two timesheets lacked positive time keeping or biennial certifications attesting that the employees worked 100 percent of the time on ELC. One timesheet was inaccurately entered into the payroll system.Cause:According to Division of Public Health (DPH) management, staff turnover and inadequate training for temporary employees on how to complete, review, and approve timesheets contributed to the timesheet errors.Criteria:Per Title 45 CFR 75.303(a), the State must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 200.430(i)(1) states charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities?(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Effect:The errors resulted in questioned costs totaling $9,778. Questioned costs for the population are projected to be $608,618 based on the dollar of noncompliance observed in the sample projected over the tested population. Noncompliance with federal regulations may result in the federal award agency imposing additional conditions or taking corrective action, including reduced federal funding.Questioned Costs:$9,778Recommendation:DPH?s director should provide training for completing and reviewing timesheets, and ensure personal service costs charged to the ELC program are allowable and supported by required documentation.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 ELCFederal Award Number: 6 NU50CK000509-01-06, 6 NU50CK000509-02-02, 6 NU50CK000509-02-04Applicable Compliance Requirement: Procurement and Suspension and DebarmentCondition:For nine of 13 ELC contracts and awards, DFMS procurement staff did not conduct suspension and debarment searches, require self-certification, or include a clause or condition to ensure compliance with federal suspension and debarment requirements.Context:Nine out of the 13 ELC contracts and awards issued to municipalities, school districts, and other vendors tested by auditors did not have sufficient evidence DFMS staff verified compliance with suspension and debarment requirements. However, no instances of funds being paid to a suspended or debarred vendor or organization were identified.Cause:DFMS management suspended certain grants and procurement processes and procedures while under national and state public health emergency declarations in order to expedite distribution of emergency funds across the state.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Title 2 CFR 180.300 requires an organization to verify that the person with whom they intend to do business is not excluded or disqualified. This may be accomplished by:(a) Checking for exclusions in the federal system for award management; or(b) Collecting a certification from that person; or(c) Adding a clause or condition to the covered transaction with that person.Effect:The lack of effective internal controls may result in awarding federal funds to a suspended or debarred contractor.Questioned Costs:NoneRecommendation:DOH?s DFMS director should follow established federal grant management procedures to ensure funds are not awarded to suspended or debarred contractors.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.323 ELCFederal Award Number: 6 NU50CK000509-01-06, 6 NU50CK000509-02-02, 6 NU50CK000509-02-04Applicable Compliance Requirement: ReportingCondition:Auditors could not obtain sufficient and appropriate evidence to verify the accuracy of the data reported in the monthly ELC special report for FY 22 COVID tests conducted by school districts. In addition, for two ELC grant awards, Enhancing Detection and Reopening Schools, inception to date expenditures were overstated by $4,436,595 and $725,221, respectively, in the June 30, 2022, financial reports.Context:During FY 22, school districts that received ELC funds from DPH submitted weekly COVID testing information to the National Electronic Disease Surveillance Base System (NBS). DPH staff gathered the information submitted to NBS and summarized the COVID test data by date range, test type, tests conducted, positive cases, and school district. The information was reported monthly to the federal award agency. Each ELC grant award required monthly financial reports for FY 22.Cause:According to DPH staff, documentation was not retained for the summary level data reported in the monthly special report. The lack of documentation was attributed to employee turnover and insufficient procedures.DPH staff review of the ELC financial reports was insufficient to identify the incorrect data. Further, expenditure reports for financial reporting were improperly designed.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.ELC federal award terms and conditions for reporting required monthly financial reports. The ELC grant award, Reopening Schools, terms and conditions also required monthly reports on the number of COVID tests conducted.Effect:Inaccurate federal reporting reduces transparency and may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:DPH?s director should develop and implement procedures to ensure compliance over ELC reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: U.S. Department of Health and Human ServicesImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.423 1332 State Innovation WaiversFederal Award Number: 1 SIWIW180004-01-00Applicable Compliance Requirement: ReportingCondition:The subaward issued for the 1332 State Innovation Waivers program subject to Federal Funding Accountability and Transparency Act (FFATA) requirements was not reported to the FFATA Subaward Reporting System (FSRS).Context:FFATA requires information on federal awards be made available to the public via a single website (www.usaspending.gov). FSRS is the reporting tool federal awardees, such as the State of Alaska, use to report subaward and executive compensation data regarding first-tier subawards.The audit found that the DCCED, Division of Insurance (DOI) failed to report to FSRS the one FY 22 subaward, totaling $100,000,000.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:DCCED program staff?s internal controls over the review of the federal notice of award terms and conditions were insufficient to identify FFATA reporting requirements.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 2 CFR 170 states in part that federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made, and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DCCED?s DOI director should improve procedures over the review of grant awards? standard terms and conditions to ensure DCCED is in compliance with all reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-032Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 Temporary Assistance for Needy Families (TANF)Federal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Eligibility, Special Tests and ProvisionsPrior Year Finding: 2021-030Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Allowable Activities/Allowable CostsCondition:Ten of 25 TANF recipient case files tested lacked documentation supporting the request and use of income and benefit information through the Income Eligibility and Verification System (IEVS) for determining eligibility and benefits. Further, the following eligibility errors were identified:? Eight TANF applicants did not have eligibility redetermined within 12 months and eligibility was automatically extended.? Three TANF applications were not reviewed within 30 days of receipt.? Three applications either did not fill out the felony conviction disclosures or the section was not retained in the case file.? Three applications did not have adequate income verification support.? Three benefit payment amounts were not calculated accurately.? One application did not include child support documentation in the case file.? One renewal application was not reviewed for an eligibility redetermination.Additionally, 24 of the TANF recipient cases received Pandemic Emergency Assistance Fund (PEAF) payments, of which 20 did not have IEVS documentation to support the eligibility determination prior to DHSS making the PEAF payments.Context:The State is required to ensure only financially needy families consisting of a minor child living with a parent or other caretaker relatives receive TANF assistance. DPA employs ETs who review applications, identify income and financial resources, and make a determination whether a family is eligible to receive benefits, including the amount of the benefits. As part of verifying TANF eligibility, the State is required to coordinate data exchanges when making eligibility determinations, including, but not limited to: wage information from the State Wage Information Collection Agency, IEVS, unemployment compensation information from the Department of Labor, all available information from the Social Security Administration, and information from the United States Citizenship and Immigration Services.DPA?s Alaska Temporary Assistance manual provides ETs guidance on how to calculate income. Once the information is received, reviewed, and calculated, ETs enter the information into EIS. EIS automatically calculates the monthly benefit amount based on the eligibility factors entered. If eligibility factors are not entered accurately, benefit amounts are paid incorrectly.DPA?s Administrative Procedures Manual, Section 109 requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit-level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness of each action taken, verification used, and contacts made using the online case note screen in EIS or on a Report of Contact sheet maintained in the hard copy case files.On April 9, 2021, the USDHHS Administration for Children and Families (ACF) issued TANF Program Instruction No. TANF-ACF-PI-2021-02, which provided guidance regarding the newly established PEAF. The instructions allowed states to provide non-recurrent, short-term benefits to needy families with children and allowed states to determine the definition of ?needy? families. DPA management sent a letter to TANF recipients during May 2022 stating the division planned to issue a PEAF payment to each household who currently received TANF or received TANF during the past 12 months.Cause:According to DPA management, eligibility redeterminations were not performed because system-generated certification period extensions were granted during the public health emergency. DPA management stated a pending State plan amendment, submitted during FY 22, will allow retroactive flexibilities for eligibility redeterminations during the public health emergency. Auditors reviewed the pending State plan amendment and noted the requested flexibilities expired on August 31, 2020, which is prior to the FY 22 period under audit.Turnover, staffing shortages, and inadequate training contributed to ETs not performing and/or documenting all required components of eligibility determinations and not accurately calculating benefit amounts.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 45 CFR 206.10(a)(3)(i) requires that a decision be made promptly on applications, pursuant to reasonable State-established time standards not in excess of 45 days. PerSection 4.1 of the Alaska State Plan for TANF, dated December 31, 2020, applications are required to be processed within 30 days of receipt.Title 45 CFR 264.10 specifies states must meet the requirements of IEVS and request certain information from the Internal Revenue Service, the State Wage Information Collection Agency, the Social Security Administration, and the Immigration and Naturalization Service to perform computer match data records to verify recipient information.Pursuant to Title 45 CFR 206.10, DPA?s federally approved TANF State Plan outlines specific State requirements for applications and eligibility determinations, including:? Section 4.1 Application ? Program applicants must complete an application form in writing. To be considered complete, the application must provide all requested information and be supported by documentation the department determines necessary to establish eligibility.? Section 4.3 Reporting Requirements ? Participants must also take part in periodic reviews of the family?s situation. DPA redetermines eligibility and benefit amount based on the information provided during the reviews and any other changes that are reported between reviews.? Section 13 Family Need ? The department establishes whether a child is financially needy. Financial need is determined to exist if the family resources and income are below the need standards set by the department.Title 45 CFR 206.10(a) (9) (iii) requires that at least one face-to-face redetermination must be conducted for each case once every 12 months. However, TANF Program Instruction No. TANF-ACF-PI-2020-01 allowed for telephonic or other virtual/electronic communication platforms to be used during the COVID-19 pandemic.TANF Program Instruction No. TANF-ACF-PI-2021-02 requires the use of IEVS to determine eligibility for families who receive PEAF.Title 45 CFR 75.2 defines improper payments to include payments that were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.Effect:The State may be penalized for up to two percent of the federal grant award for failure to participate in IEVS. As a result of not redetermining eligibility during FY 22 and the other errors identified, ineligible recipients may have received benefits. Additionally, TANF benefit payments were calculated incorrectly resulting in overpayments.Questioned Costs:$138,024Recommendation:DPA?s director should improve training and monitoring of staff to ensure staff comply with TANF eligibility and document retention procedures and eligibility determinations are performed accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-036Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Five of the eight child support noncooperation alerts tested (63 percent) were not assessed a penalty to reduce TANF benefits when determined necessary.Context:Department of Revenue, Child Support Services Division, sends DPA a weekly listing of public assistance clients that are not cooperating with establishing paternity, or in establishing, modifying, or enforcing a support order with respect to a child. The weekly listing is used to create an alert for each client in DPA?s EIS. When an alert is received by an ET, DPA procedures require that the ET assess a TANF benefit penalty, enter a case note within EIS, and print a notice for the client. The alerts are not retained in EIS after this process has been completed. DPA does not maintain a log or tracking sheet of the weekly alerts to confirm alerts are processed timely or accurately. This finding was first identified when auditing the program during FY 19.Cause:DPA management lacked adequate monitoring procedures to ensure alerts were processed. Further, DPA management stated that competing priorities and staffing shortages prevented the development of procedures.Criteria:Title 45 CFR 264.30 requires the State to deduct from the assistance that would otherwise be provided to the family of the individual not cooperating with the child support enforcement requirements an amount equal to, but not less than, 25 percent of the amount of such assistance, or deny the family any assistance under the program.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:Delays in assessing, or failing to assess, child support noncooperation penalties resulted in clients receiving unallowable benefits.Questioned Costs:$4,542Recommendation:DPA's director should develop and implement procedures to monitor processing of child support noncooperation alerts to ensure notices and penalties are processed timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-037Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:Nineteen of 25 cases tested (76 percent) reported work activities on the ACF-199 report that were inaccurate, unsupported or unverified.Context:DPA reports the work verification data through the quarterly ACF-199 reports. The ACF-199 reports are compiled from information that is either entered in EIS by ETs or through interfacing with the case management system. The information is electronically captured through a data file and transmitted to ACF. The data transmitted for the ACF-199 report allows ACF to determine whether the State has met the required work participation rates under the TANF work verification plan.Cause:DPA lacked internal control procedures to ensure work activities reported were verified, supported by documentation in the case file, and accurate. According to DPA management the case management system was unavailable for work services providers to enter work activities until May 2022 due to a cyberattack.Criteria:Title 45 CFR 261.60(a) requires a state to report the actual hours that an individual participates in an activity. Furthermore, per 45 CFR 261.61(a) a state must support each individual?s hours of participation through documentation in the case file and 45CFR 261.62(a)(2) requires a state to ensure the accuracy of the reporting by establishing and employing procedures for determining how to count and verify reported work activities. Additionally, 45 CFR 261.62(a)(4) requires a state to establish and employ internal controls to ensure compliance with procedures.Title 45 CFR 75.303(a) requires the State establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:Per Title 45 CFR 261.65 the State could be subject to a penalty equal to not less than one percent and not more than five percent of the federal grant award for not maintaining adequate work participation support.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement internal control procedures to ensure work activities reported by TANF recipients are retained, verified, supported, and accurately entered into the case management system. Further, DOH?s commissioner should strengthen procedures to ensure continuity of business processes in the event that information systems do not function.Views of Responsible Officials:DOH does not agree with the finding. The availability of the system due to the cyberattack is outside the control of the division.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states the availability of the system due to the cyberattack was outside the control of the division; however, hard copy case management file support provided by DPA management was utilized for the audit. The documentation provided by DPA management was insufficient as TANF recipient work activities were not retained, not verified, unsupported, or inaccurate.
Prior Year Finding: 2021-038Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Special Tests and ProvisionsCondition:The audit reviewed 13 FY 22 TANF case files for clients that were not engaged in work activities and did not have a good cause exemption. Of the 13 cases, four were assessed a penalty, two were not assessed a penalty even though documentation showed that a penalty should have been assessed, and seven cases lacked sufficient documentation to determine whether a penalty should have been assessed.Context:The goal of the TANF program is to transition TANF recipients into jobs or other work activities to support families. To attain this goal, the TANF program uses the "work first" approach. TANF recipients are required to look for paid employment. Individuals who cannot find immediate paid employment participate in activities that focus on gaining skills and experience that lead directly to employment, and increase the family?s self-sufficiency.To comply with the work first goal, DPA staff, with the assistance of contracted case managers, identify the work activities for the TANF recipients to help them move toward obtaining employment. TANF recipients must take part in assigned work activities. TANF recipients who fail to take part in assigned work activities incur a penalty that reduces the assistance payment.Per federal guidance, states can establish good cause or other exemptions for TANF recipients not engaging in work activities. Alaska Temporary Assistance Manual, section 730-2, outlines the following good cause exemptions: caretaker of a baby, caretaker of a disabled child or parent, medical reasons, family hardship, lack of childcare, no childcare funds, or no transportation funds. Where applicable, exemptions must be documented by a physician or other licensed medical professional.Cause:DPA staff turnover and shortages contributed to ETs not issuing penalties. Although DPA had procedures, supervisors were not adequately monitoring ETs to ensure procedures were performed. Additionally, DPA used a case management system in conjunction with hard copy case management files to track the work activities of the TANF recipients. According to DPA management, support for work activities could not be entered into the case management system as the system was unavailable until May 2022 due to the cyberattack.Criteria:Title 45 CFR 261.14 requires the State to reduce or terminate the amount of public assistance to families of individuals who refuse to engage in work.Title 45 CFR 75.303(a) requires the State establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of grant awards.Effect:According to 45 CFR 261.54, the State could be subject to a penalty equal to not less than one percent and not more than five percent of the federal grant award for failing to assess penalties when individuals refuse to engage in work activities.Questioned Costs:NoneRecommendation:DPA?s director should improve training and supervision of ETs to ensure TANF recipients? refusal to work penalties are processed. Further, DPA?s director should strengthen procedures to ensure continuity of business processes in the event information systems do not function.Views of Responsible Officials:DOH does not agree with the finding. A State Plan Amendment is pending approval with ACFand will be applicable retroactively.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states the TANF state plan amendment pending approval will allow retroactive application and carry forward program flexibilities. Per review of the state plan amendment, the requested flexibilities ended August 31, 2020, which is prior to the FY 22 audit scope. Further, DOH did not receive federal approval during FY 22 for an amended state plan.
Prior Year Finding: 2021-032Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.558 Temporary Assistance for Needy Families (TANF)Federal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Eligibility, Special Tests and ProvisionsPrior Year Finding: 2021-030Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAssistance Listing Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Allowable Activities/Allowable CostsCondition:Ten of 25 TANF recipient case files tested lacked documentation supporting the request and use of income and benefit information through the Income Eligibility and Verification System (IEVS) for determining eligibility and benefits. Further, the following eligibility errors were identified:? Eight TANF applicants did not have eligibility redetermined within 12 months and eligibility was automatically extended.? Three TANF applications were not reviewed within 30 days of receipt.? Three applications either did not fill out the felony conviction disclosures or the section was not retained in the case file.? Three applications did not have adequate income verification support.? Three benefit payment amounts were not calculated accurately.? One application did not include child support documentation in the case file.? One renewal application was not reviewed for an eligibility redetermination.Additionally, 24 of the TANF recipient cases received Pandemic Emergency Assistance Fund (PEAF) payments, of which 20 did not have IEVS documentation to support the eligibility determination prior to DHSS making the PEAF payments.Context:The State is required to ensure only financially needy families consisting of a minor child living with a parent or other caretaker relatives receive TANF assistance. DPA employs ETs who review applications, identify income and financial resources, and make a determination whether a family is eligible to receive benefits, including the amount of the benefits. As part of verifying TANF eligibility, the State is required to coordinate data exchanges when making eligibility determinations, including, but not limited to: wage information from the State Wage Information Collection Agency, IEVS, unemployment compensation information from the Department of Labor, all available information from the Social Security Administration, and information from the United States Citizenship and Immigration Services.DPA?s Alaska Temporary Assistance manual provides ETs guidance on how to calculate income. Once the information is received, reviewed, and calculated, ETs enter the information into EIS. EIS automatically calculates the monthly benefit amount based on the eligibility factors entered. If eligibility factors are not entered accurately, benefit amounts are paid incorrectly.DPA?s Administrative Procedures Manual, Section 109 requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit-level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness of each action taken, verification used, and contacts made using the online case note screen in EIS or on a Report of Contact sheet maintained in the hard copy case files.On April 9, 2021, the USDHHS Administration for Children and Families (ACF) issued TANF Program Instruction No. TANF-ACF-PI-2021-02, which provided guidance regarding the newly established PEAF. The instructions allowed states to provide non-recurrent, short-term benefits to needy families with children and allowed states to determine the definition of ?needy? families. DPA management sent a letter to TANF recipients during May 2022 stating the division planned to issue a PEAF payment to each household who currently received TANF or received TANF during the past 12 months.Cause:According to DPA management, eligibility redeterminations were not performed because system-generated certification period extensions were granted during the public health emergency. DPA management stated a pending State plan amendment, submitted during FY 22, will allow retroactive flexibilities for eligibility redeterminations during the public health emergency. Auditors reviewed the pending State plan amendment and noted the requested flexibilities expired on August 31, 2020, which is prior to the FY 22 period under audit.Turnover, staffing shortages, and inadequate training contributed to ETs not performing and/or documenting all required components of eligibility determinations and not accurately calculating benefit amounts.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.Title 45 CFR 206.10(a)(3)(i) requires that a decision be made promptly on applications, pursuant to reasonable State-established time standards not in excess of 45 days. PerSection 4.1 of the Alaska State Plan for TANF, dated December 31, 2020, applications are required to be processed within 30 days of receipt.Title 45 CFR 264.10 specifies states must meet the requirements of IEVS and request certain information from the Internal Revenue Service, the State Wage Information Collection Agency, the Social Security Administration, and the Immigration and Naturalization Service to perform computer match data records to verify recipient information.Pursuant to Title 45 CFR 206.10, DPA?s federally approved TANF State Plan outlines specific State requirements for applications and eligibility determinations, including:? Section 4.1 Application ? Program applicants must complete an application form in writing. To be considered complete, the application must provide all requested information and be supported by documentation the department determines necessary to establish eligibility.? Section 4.3 Reporting Requirements ? Participants must also take part in periodic reviews of the family?s situation. DPA redetermines eligibility and benefit amount based on the information provided during the reviews and any other changes that are reported between reviews.? Section 13 Family Need ? The department establishes whether a child is financially needy. Financial need is determined to exist if the family resources and income are below the need standards set by the department.Title 45 CFR 206.10(a) (9) (iii) requires that at least one face-to-face redetermination must be conducted for each case once every 12 months. However, TANF Program Instruction No. TANF-ACF-PI-2020-01 allowed for telephonic or other virtual/electronic communication platforms to be used during the COVID-19 pandemic.TANF Program Instruction No. TANF-ACF-PI-2021-02 requires the use of IEVS to determine eligibility for families who receive PEAF.Title 45 CFR 75.2 defines improper payments to include payments that were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.Effect:The State may be penalized for up to two percent of the federal grant award for failure to participate in IEVS. As a result of not redetermining eligibility during FY 22 and the other errors identified, ineligible recipients may have received benefits. Additionally, TANF benefit payments were calculated incorrectly resulting in overpayments.Questioned Costs:$138,024Recommendation:DPA?s director should improve training and monitoring of staff to ensure staff comply with TANF eligibility and document retention procedures and eligibility determinations are performed accurately and timely.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-033Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Auditors could not obtain reliable evidence to verify compliance with TANF?s earmarking requirement.Context:DHSS staff monitored compliance with TANF?s earmarking requirement through compiling Monthly Caseload and Benefit Summary reports from EIS data. The summary reports identify the number of TANF recipients that have received more than 60 months of benefit payments. According to DPA management, the monthly report is reviewed for accuracy.The monthly EIS data is also compiled as part of the ACF-199 report that includes the number of countable months TANF recipients used assistance. Testing of ACF-199 data found the EIS data reported in the ACF-199 was not supported by a manual count of monthly benefit payments for 11 of 30 cases tested (37 percent). Based on this testing, auditors concluded the EIS monthly caseload data was not reliable.Cause:DHSS staff review of the Monthly Caseload and Benefit Summary reports was insufficient to identify whether the data was supported. In addition, there was a system programming error in EIS causing the compilation of countable monthly benefit payments to return incorrect data.Criteria:Title 45 CFR 264.1 states that, subject to exceptions, no state may use any of its federal TANF funds to provide assistance to a family that includes an adult head-of-household or a spouse of the head-of-household who has received federal assistance for a total of five years (60 cumulative months, whether or not consecutive).Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Unreliable data impeded DPA staff?s ability to monitor compliance with federal requirements and created a risk that unallowable benefits were paid. Title 45 CFR 264.2 states TANF funding may be reduced by five percent for exceeding the 60-month limit on benefits.Questioned Costs:NoneRecommendation:DPA's director should develop procedures to ensure the monthly benefit count in EIS is accurate. Additionally, DOH's commissioner should allocate resources to correct the EIS programming error.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-035Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: ReportingCondition:Twelve of 25 TANF cases tested (48 percent) had inaccurate information reported in the ACF-199 data file.Context:The quarterly ACF-199 report is compiled monthly from information that is either entered in EIS by an ET or interfaced into EIS through the case management system. The information is transmitted to ACF in a data file. ACF uses the transmitted data to determine whether states have met the required work participation rates and to confirm the State is meeting the earmarking requirement that no more than 20 percent of families received more than 60 months of TANF assistance.Review by auditors found that several key line items for family-level and person-level data were not reported accurately in the data file that was transmitted for the ACF-199 reports for the quarters ended September 2021, December 2021, March 2022, and June 2022 (see table below).[See Schedule of Findings and Questioned Costs for chart/table.]Cause:DPA management lacked procedures for ensuring the accuracy of the information queried from EIS, which supports the ACF-199 report. The completed ACF-199 report was not reviewed for accuracy before being transmitted to ACF. Due to a cyberattack, the case management system was unavailable and work service providers were not able to upload data. DPA management could not explain the cause of the inaccurate data (items 17, 28, 44, 48, 49).Criteria:Title 45 CFR 265.3(a)(1) requires the State to collect on a monthly basis, and file on a quarterly basis, the data specified in the ACF-199 report. Title 45 CFR 265.7(a) and 45 CFR 265.4 further specify the State's quarterly ACF-199 must be complete, accurate, and filed within 45 days, or be subject to a penalty.Title 45 CFR 265.7(a) requires each state?s quarterly reports to be complete and accurate. Federal regulations further state a complete and accurate report means the reported data accurately reflect information available to the state in case records, financial records, and automated data systems.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Reporting incorrect data may impair the federal oversight agency's ability to properly oversee the program. Further, the State could be subject to a penalty of four percent of the federal grant award for each quarter the State fails to submit an accurate, complete, and timely required report.Questioned Costs:NoneRecommendation:DPA's director should implement procedures to ensure data reported on the ACF-199 is complete and accurate.Views of Responsible Officials:Management agrees with the finding.[See Schedule of Findings and Questioned Costs for footnote.]
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.558 TANFFederal Award Number: 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: ReportingCondition:The FFY 21 ACF-204 annual report was incomplete.Context:The State must complete and file an annual report containing information on the TANF program and the State?s maintenance of effort (MOE) programs for that year. The report filed in FY 22 did not contain all the programs for which the State claimed MOE expenditures. DPA staff could not provide evidence that an amended, complete report was filed.Cause:Due to staff turnover, DPA management could not provide an explanation as to why the ACF-204 was incomplete.Criteria:Title 45 CFR 265.9(a) requires each state to file an annual report containing information on the TANF program and the state?s maintenance of effort program(s) for that year.Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:Unreliable federal reporting limits transparency and may impair the federal oversight agency?s ability to properly oversee the program. According to 45 CFR 262.1(a)(3), the State could be subject to a penalty of four percent of the federal grant award for each quarter the State fails to submit an accurate, complete, and timely required report.Questioned Costs:NoneRecommendation:DPA's director should strengthen reporting procedures to ensure the ACF-204 report is complete and includes all programs for which the State claimed MOE expenditures.Views of Responsible Officials:DOH partially agrees with the finding. DPA submitted a complete copy of the report into the ACF system, which was confirmed via email by the federal representative. However, due to limitations within ACF?s system, which is out of the control of the Division, the supporting documents that were gathered to verify this lacked certain information.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DOH management states a complete FFY 21 ACF-204 report was submitted into the ACF system, which was confirmed via email by the federal representative; however, auditors were not provided a copy of the federal representative?s email confirmation, or other support to verify a complete report was submitted, despite multiple requests.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Material WeaknessAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEAApplicable Compliance Requirement: Period of PerformanceCondition:Auditors could not obtain sufficient and appropriate evidence to verify compliance with LIHEAP?s period of performance requirements.Context:DPA staff did not maintain evidence to demonstrate compliance with period of performance requirements.Cause:According to DPA staff, employee turnover and inadequate procedures resulted in the lack of documentation supporting compliance with LIHEAP period of performance requirements. In addition, accounting structures were not in place to differentiate between normal project period expenditures or obligations and expenditures related to carryover of the FFY 21 award.Criteria:Title 45 CFR 96.14(a)(2) establishes the following time period for obligation and expenditure of LIHEAP grant funds: beginning with allotments for fiscal year 1994, a maximum of 10 percent of the amount payable to a grantee may be held available for the next fiscal year. No funds may be obligated after the end of the fiscal year following the fiscal year for which they were allotted.Title 45 CFR 75.303(a), requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.Effect:Noncompliance with the LIHEAP period of performance requirement could result in the federal awarding agency imposing conditions or taking corrective actions, including additional requirements or withholding/terminating funds.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement procedures and modify accounting structures to ensure compliance with LIHEAP period of performance requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Material Weakness, NoncomplianceAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEA, 2101AKEC6Applicable Compliance Requirement: ReportingCondition:Auditors could not obtain sufficient and appropriate evidence to verify accuracy of the data reported in the FFY 21 LIHEAP Performance Data Form and the FFY 21 Annual Report on Households Assisted by LIHEAP. In addition, the SF-425 LIHEAP financial report for the FFY 21 grant award misreported two of six key line items. One line was misstated by $1,189,130, and the second by $689,186.Context:LIHEAP grant awards include reporting requirements for financial, performance, and special reports. In FY 22 there were no established procedures for LIHEAP reporting to dictate the procedures necessary to compile data, and to create, review and submit required reports.Cause:According to DPA staff, documentation was not retained to support the data reported in the FFY 21 performance and special reports due to staff turnover and a lack of procedures. DPA staff review of the SF-425 was insufficient to identify incorrect data.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.341 requires financial reporting be collected with the frequency required by the terms and conditions of the federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting.The Low-Income Home Energy Assistance Act of 1981 (Title XXVI of the Omnibus Budget Reconciliation Act of 1981, Public Law 97-35, as amended) section 2610 requires the collection of data, including information concerning home energy consumption, the amount, cost and type of fuels used for households eligible for assistance under this title, the type of fuel used by various income groups, the number and income levels of households assisted by this title, the number of households that received such assistance and include one or more individuals who are 60 years or older or disabled or include young children, and any other information determined to be reasonably necessary to carry out the provisions of this title. Collection of this data is facilitated through the LIHEAP performance data form.Title 45 CFR 96.82 requires the State to submit data on the number and income levels of households that apply and the number that are assisted with funds for the 12-month period corresponding to the federal fiscal year (October 1?September 30) preceding the fiscal year for which funds are requested. The data shall be reported separately for LIHEAP heating, cooling, crisis, and weatherization assistance.Effect:Auditors were unable to verify the accuracy of data reported in the performance and special reports. Inaccurate federal reporting may impair the federal oversight agency?s ability to properly oversee the program.Questioned Costs:NoneRecommendation:The DPA and DFMS directors should work together to develop and implement procedures to ensure compliance with LIHEAP financial, performance, and special reporting requirements.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.568 Low-Income Home Energy Assistance Program (LIHEAP)Federal Award Number: 2101AKLIEAApplicable Compliance Requirement: EligibilityCondition:Three (5 percent) of 60 LIHEAP applicant case files tested had eligibility errors.Context:The audit tested a sample of 60 applications for heating assistance. Auditors identified three instances of eligibility noncompliance. Two were for incomplete applications determined eligible for benefits. One was for an eligible application that was denied incorrectly based on income level.Cause:According to DPA staff, the case review quality control process was not completely in place during FY 22. Case reviews were suspended for all of FY 22 for experienced eligibility technicians (ET) and suspended for three months for inexperienced ETs.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.The DPA Administrative Procedures Manual requires that all public assistance cases have documentation that supports eligibility, ineligibility, and benefit level determinations. The documentation must be in sufficient detail to allow a reader or reviewer to determine the reasonableness and accuracy of the determination.Title 42 U.S. Code 8624(b)(2)(B) requires states make payments to households with incomes which do not exceed the greater of (i) an amount equal to 150 percent of the poverty level for such State; or (ii) an amount equal to 60 percent of the State median income; except that a State may not exclude a household from eligibility in a fiscal year solely on the basis of household income if such income is less than 110 percent of the poverty level for such State, but the State may give priority to those households with the highest home energy costs or needs in relation to household income.Effect:Ineligible recipients received benefits and an individual that qualified for program benefits was denied. The errors resulted in questioned costs totaling $6,490. Questioned costs for the population are projected to be $664,400 based on the dollar of noncompliance observed in the sample projected over the tested population.Questioned Costs:$6,490Recommendation:DPA?s director should strengthen internal controls by reinstituting a robust quality control case review process to ensure LIHEAP eligibility determinations are accurate.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.568 LIHEAPFederal Award Number: 2101AKLIEAApplicable Compliance Requirement: Matching, Level of Effort, EarmarkingCondition:Internal controls over FY 22 LIHEAP earmarking requirements for planning and administrative costs were ineffective.Context:Auditors found that DPA staff complied with the percent limits for the FY 22 LIHEAP earmarking requirements, however, DPA lacked procedures to reduce the risk of noncompliance. Internal controls are an integral part of ensuring federal programs are managed according to program requirements. An effective internal control system helps an entity adapt to shifting environments, evolving demands, changing risks, and new priorities.Cause:According to DPA program management, the lack of procedures for the LIHEAP earmarking requirement was the result of staff turnover and a lack of training regarding internal control requirements over federal programs.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Effect:The lack of procedures for the LIHEAP earmarking requirements could result in unallowable expenditures.Questioned Costs:NoneRecommendation:DPA?s director should develop and implement procedures and improve staff training to ensure compliance with LIHEAP earmarking requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-031Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.558 TANF, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAP, 2001AKTANF, 2101AKTANF, 2201AKTANFApplicable Compliance Requirement: EligibilityCondition:DHSS?s information technology (IT) staff did not properly limit user access to DPA?s EIS during FY 22.Context:The details related to this control weakness and the relevant audit criteria are being withheld from this report to prevent the weakness from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Cause:DHSS staff relied on information that was either not being provided or not provided timely. Significant turnover caused delays in user account management.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the grant award.State of Alaska Information Security Policies provide specific criteria related to the identified deficiencies.Effect:Lack of adequate internal controls increases the risk of unauthorized system use, including data manipulation, which may result in ineligible benefit recipients or unallowable costs.Questioned Costs:NoneRecommendation:DOH?s DFMS director should work with DPA?s director to improve controls over the eligibility system.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 Children?s Health Insurance Program (CHIP)Federal Award Number: 2105AK5021, 2205AK5021Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesPrior Year Finding: 2021-043Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:Testing of 40 behavioral health claims paid during FY 22 identified 27 (68 percent) with errors:? Three providers were not enrolled in the Medicaid program at the time medical services were rendered.? Three providers that billed for and received payment for the claims were not associated with the individual medical provider that rendered the medical services.? Three claims were paid even though the claims were submitted with an incorrect National Provider Identifier. The providers were validly enrolled.? Thirteen claims did not identify the provider who rendered medical services. State regulations specifically outline requirements for providers who are qualified to render the services.? Five claims identified the provider who rendered the medical service, but the provider had not met qualification requirements.Context:Senate Bill 74 (SLA 2016) directed DHSS to apply for a Section 1115 waiverunder 42 U.S.C. 1315(a) to establish one or more demonstration projects focused on improving the State?s behavioral health system for Medicaid recipients. The demonstration project allowed DHSS to expand Medicaid behavioral health and substance use disorder services for Alaskans and provide additional services not outlined in the Medicaid State plan.As part of the Centers for Medicare and Medicaid Services? approval of Alaska?s waiver application, DHSS contracted with an Administrative Services Organization (ASO) to provide administrative support, process claims, and manage data. DHSS and the ASO implemented the OptumHealth Behavioral Services Facets Medicaid Management Information System (MMIS) in February 2020. The processing of behavioral health claims was fully transitioned from the Alaska Health Enterprise (AHE) MMIS to the new Facets MMIS during FY 21. In FY 22, the Facets MMIS processed and paid approximately $250 million in claims.Medicaid provider enrollment records are maintained in the AHE MMIS, which is administered by the Division of Health Care Services (DHCS) and its fiscal agent. Reports containing provider data are transmitted to the Facets MMIS on a weekly basis.Cause:Prior to the 1115 waiver demonstration project, DHSS did not require that all behavioral health providers rendering medical services be enrolled in the Medicaid program and screened. Management could not provide a reason why this was not required for services provided under the State plan. DHSS also waived this requirement for services provided under the waiver demonstration project beginning April 1, 2021, through the end of FY 22. According to management, this requirement was waived in order to allow providers sufficient time to enroll and maintain continuity of care for vulnerable Medicaid recipients, including children. Provider-related system edits and checks were not in place during FY 22 due to the lack of a requirement for providers to enroll. There was no federal approval to waive the enrollment requirement.Known flaws in system logic used in the processing of provider enrollment data shared between the AHE MMIS and Facets MMIS also contributed to some of the errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Title 42 CFR 455.410 states that the State must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. Further, the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Effect:Inadequate controls increase the risk of Medicaid recipients receiving services from unqualified medical providers and led to unallowable payments to ineligible Medicaid providers likely exceeding $25,000.Questioned Costs:AL 93.767: NoneAL 93.778: $1,406Recommendation:The Division of Behavioral Health?s (DBH) director should implement procedures to ensure behavioral health providers are enrolled in Medicaid and that medical services are rendered by qualified providers. DBH?s director should continue working with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-045Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found DPA staff did not process applications in a timely manner or redetermine eligibility when required for 87 percent of Medicaid cases and 90 percent of CHIP cases tested.Specifically, the errors included the following:? Twenty Medicaid cases and 17 CHIP cases were due to have eligibility redetermined; however, no information was submitted to DPA for review and DPA staff did not independently conduct a redetermination. For recipients following the Modified Adjusted Gross Income (MAGI) methodology, DPA should have attempted to redetermine eligibility through electronic interfaces.? Eligibility determinations for five Medicaid cases and two CHIP cases were not processed in a timely manner. The delays in completing the review ranged from 64 days to 279 days.? For one Medicaid case, a renewal application was received by DPA staff but it was not reviewed or acted upon. This renewal was received by DPA in January 2021 and had not been processed as of the end of FY 22, a period totaling 520 days.Context:The State is required to ensure applications are reviewed and eligibility determinations are made timely for Medicaid and CHIP recipients. Eligibility is redetermined at least every 12 months or when new information is provided from the recipient.Due to the COVID-19 pandemic, the federal government enacted the Families First Coronavirus Response Act (FFCRA) on March 18, 2020, which required health insurance coverage for individuals validly enrolled on or after this date to continue during the public health emergency (PHE). In accordance with FFCRA, the State is allowed to receive an enhanced reimbursement rate for Medicaid and CHIP, and may not terminate Medicaid coverage for most individuals found to no longer meet eligibility requirements until the end of the month in which the PHE ends. As of June 30, 2022, the PHE was ongoing. Per federal guidelines, the continuous enrollment requirement did not impact a state?s obligation to continue to conduct renewals and act on changes in beneficiary circumstances, but it did prohibit a state from disenrolling a beneficiary who is determined ineligible, except under certain circumstances.Cause:Staffing and resource shortages adversely impacted application processing timeliness. Due to a system deficiency, cases were also excluded from ARIES-generated reports that were used to track and process renewals.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.912(c) states the determination of eligibility for any application may not exceed 90 days for applicants who apply for Medicaid on the basis of disability and 45 days for all other applicants.Title 42 CFR 435.916 requires the State to periodically renew Medicaid eligibility. For renewals based on MAGI, a redetermination is required once every 12 months, and no more frequently than once every 12 months. Similarly, for non-MAGI beneficiaries the State is required to make a redetermination of eligibility at least every 12 months. The State is required to take action on information about changes between regular eligibility renewals and promptly redetermine eligibility.Title 42 CFR 435.916(a)(2) states that the agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual?s account or other more current information available to the agency, including but not limited to information accessed through any databases accessed by the agency.Title 42 CFR 457.340 and 42 CFR 457.343 require the timely determination of eligibility and renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to determine Medicaid and CHIP eligibility timely increases the risk that ineligible beneficiaries receive Medicaid and CHIP benefits.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to determine Medicaid and CHIP eligibility in a timely manner and ensure the accuracy of ARIES-generated monitoring reports.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-046Federal Awarding Agency: USDHHSImpact: Material Weakness, Material NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Thirty Medicaid and 20 CHIP recipients with paid medical claims during FY 22 were randomly selected for eligibility testing. Auditors found inaccurate or unsupported eligibility determinations by DPA staff for 33 percent of Medicaid cases tested and 10 percent of CHIP cases tested.Specifically, the errors included the following:? Eight Medicaid cases and nine CHIP cases did not have active eligibility periods that qualified them to be continuously enrolled under the FFCRA. In these cases, DPA staff had not performed redeterminations to renew their eligibility periods, which ended prior to March 18, 2020.? Two Medicaid cases were eligible for continuous enrollment under the FFCRA but their enrollment was not continued.? One CHIP case had income incorrectly calculated.? One CHIP case?s supporting documentation could not be located by DPA staff.Context:The State is required to ensure only financially needy individuals receive Medicaid or CHIP assistance. DPA is the primary division within DHSS responsible for determining Medicaid and CHIP eligibility. DPA employs ETs who review applications, identify income and financial resources, obtain social security numbers and verify the numbers through a federal database, and make determinations whether the individuals are eligible to receive benefits.DPA has established internal control procedures to help staff determine eligibility in accordance with federal regulations and the State plan. Procedures are documented in the DPA Administrative Procedures Manual and the MAGI Medicaid Eligibility Manual. DPA utilizes an electronic document management system to store the documents that DPA staff obtained to verify eligibility.The FFCRA requires health insurance coverage for individuals validly enrolled on or after March 18, 2020, to continue during the public health emergency period.Cause:The deficiencies were due to staff and resource shortages, inadequate training, human error, and system errors.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.914(a) states the agency must include in each application?s case record facts to support the agency?s decision.Title 42 CFR 435.603(c) requires the agency to determine financial eligibility for Medicaid based on ?household income?. Title 42 CFR 435.948 requires the State to verify financial information including wages, net earnings from self-employment, unearned income and other resources, and to use available electronic services if available.Title 42 CFR 457.343 requires the renewal procedures for Medicaid apply equally in administering CHIP.Effect:Failure to accurately determine eligibility and maintain complete case records for Medicaid and CHIP increases the risk that ineligible recipients receive Medicaid and CHIP benefits.Questioned Costs:AL 93.767: $20,115AL 93.778: $16,945Recommendation:DPA?s director should improve eligibility training, ensure procedures are followed for determining Medicaid and CHIP eligibility, and ensure the case management system includes all relevant documentation supporting eligibility decisions.Views of Responsible Officials:DHSS concurs with the finding but not the questioned costs. CMS has notified the state that financial recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS? Payment Error Rate Measurement (PERM) program, under section 1903(u) of the Social Security Act and regulations at 42 CFR Part 431, Subpart Q.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. Management concurs with the finding, but not the questioned costs, based on communication received from a federal agency indicating the agency will not pursue recovery of the questioned costs for a similar prior year finding. Questioned costs are defined by Title 45 CFR 75.2, which states:Questioned cost means a cost that is questioned by the auditor because of an audit finding:(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;(b) Where the costs, at the time of the audit, are not supported by adequate documentation; or(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.Based on the Uniform Guidance, benefits paid associated with the finding are reported as questioned costs.
Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition:DHSS staff claimed inaccurate federal reimbursement for behavioral health costs.Context:During FY 21 the department transitioned the processing of behavioral health claims from the AHE MMIS to the new Facets MMIS. Medicaid individual eligibility enrollment records are maintained in ARIES and EIS, which are administered by DPA. Reports containing eligibility data are transmitted to the Facets MMIS on a monthly basis.DBH staff?s internal monitoring identified inconsistencies between Facets MMIS eligibility data and eligibility data in ARIES and EIS. As a result, risks exist that eligible members are not receiving services and ineligible members are inappropriately receiving services, or that the federal portion of paid benefits are calculated incorrectly. DBH staff brought this to auditors? attention in December 2022 and, at that time, were in the process of identifying all affected claims. For several claims identified by DBH staff, auditors confirmed the system paid claims based on old eligibility enrollment records instead of eligibility information effective during the claims? dates of service.Cause:The root cause is not known and DBH staff were working with the ASO to identify and correct the issue.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 45 CFR 75.403(a) requires that costs must be necessary and reasonable for the performance of the federal award.Effect:Inadequate controls led to an unknown amount of federal overpayments and underpayments.Questioned Costs:AL 93.767: IndeterminateAL 93.778: IndeterminateRecommendation:DBH?s director should continue to work with the ASO to correct the system deficiencies and strengthen internal controls over behavioral health expenditures processed in the Facets MMIS.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-044Federal Awarding Agency: USDHHSImpact: Significant DeficiencyAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:An examination of the Alaska Resource for Integrated Eligibility Services (ARIES) system during FY 22 identified significant internal control deficiencies.Context:ARIES is an eligibility system developed for Medicaid and CHIP.Cause:Details related to the control weaknesses and the relevant audit criteria are being withheld from this report to prevent the weaknesses from being exploited. Pertinent details have been communicated to agency management in a separate confidential document.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Per Title 45 CFR 155.260(a)(5) the State must monitor, periodically assess, and update the security controls and related system risks to ensure the continued effectiveness of those controls.Effect:The internal control weaknesses increase the risk of noncompliance with State and federal regulations, unauthorized system use (including data manipulation), and incorrect eligibility determinations, which may result in ineligible recipients or unallowed costs.Questioned Costs:NoneRecommendation:DPA?s director should formalize procedures and dedicate the resources necessary to strengthen ARIES system controls.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-047Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP, 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: EligibilityCondition:Seven of 30 (23 percent) Medicaid eligibility cases and two of 20 (10 percent) CHIP eligibility cases tested were sent written eligibility notices that contained inconsistent or incorrect information regarding the eligibility period and application date.Context:Notices for Medicaid eligibility decisions are created through DHSS?s two eligibility systems, ARIES and EIS. DPA procedures state that approval notices must include information about the level of benefits and approved services. The notices must also include the date eligibility is set to begin and end.ARIES is programmed to automatically generate system notices; however, due to system defects, the notices do not always contain correct information. As a work-around, the ETs can manually enter the correct information in the additional information section of the notice.Cause:ARIES has known system logic issues that result in incorrect or incomplete notices. This defect was first identified by auditors in FY 19 and has not been addressed by DPA due to lack of resources and competing priorities. Additionally, DPA staff did not monitor the accuracy and completeness of the notices and add clarifying text when necessary.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 435.917 requires the State to provide all Medicaid applicants and beneficiaries with timely and adequate written notice of any decision affecting their eligibility. Additionally, such notices must contain clear information including the basis and effective date of the eligibility and the circumstances in which the individual must report any changes that may affect the individual?s eligibility.Effect:Due to inconsistent or incorrect information within eligibility notices, Medicaid beneficiaries were misinformed regarding benefit coverage.Questioned Costs:NoneRecommendation:DPA?s director should dedicate the resources necessary to fix the ARIES system logic that created the incorrect notices. Additionally, DPA?s director should implement procedures to monitor the accuracy and sufficiency of Medicaid eligibility notices.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-048Federal Awarding Agency: USDHHSImpact: Significant Deficiency, NoncomplianceAL Number and Title: 93.767 CHIP , 93.775, 93.777, 93.778 Medicaid ClusterFederal Award Number: 2105AK5021, 2205AK5021, 2105AKMAP, 2205AKMAPApplicable Compliance Requirement: Allowable Costs/Cost Principles, Special Tests and ProvisionsCondition:Certain behavioral health providers were not screened and enrolled in accordance with federal eligibility requirements.Context:Screening is a required element of the provider enrollment process and is used to determine whether an individual and/or entity is eligible to participate as a Medicaid/CHIP provider. Examples of screening activities include, but are not limited to, license verification, site visits, identity confirmation, and exclusion status assessment.Forty newly enrolled behavioral health providers were randomly selected for testing. Auditors found 73 percent of providers lacked documentation to support that professional licensing, minimum education, or experience requirements were met prior to enrollment in the Medicaid program. The sample consisted of mental health professional clinicians, peer support specialists, substance use disorder counselors, and behavioral health clinical associates. Errors were found for the following enrollments:? Five of eight mental health professional clinicians;? Eleven of 12 substance use disorder counselors; and? Fourteen of 16 behavioral health clinical associates.As of the end of FY 22, there are approximately 2,500 mental health professional clinicians, substance use disorder counselors, and behavioral health clinical associates enrolled in the Medicaid program.Cause:Deficiencies were due to inadequate procedures and training for enrolling new provider types.Criteria:Title 45 CFR 75.303(a) requires the State to establish and maintain effective internal controls over federal awards that provide reasonable assurance that the State is managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of the grant awards.Title 42 CFR 455.410 requires that the State must require all enrolled providers to be screened under 42 CFR 455 Subpart E.Title 42 CFR 455.450 requires the State Medicaid agency to verify that a provider meets any applicable federal regulations or State requirements for the provider type prior to making an enrollment determination.Effect:Inadequate controls over provider eligibility increase the risk of unqualified providers delivering services to Medicaid recipients.Questioned Costs:AL 93.767: $1,669AL 93.778: $425,224Recommendation:The DHCS director should strengthen training and implement procedures to ensure providers are enrolled in accordance with federal and State requirements.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-023Federal Awarding Agency: U.S. Department of Education (USED)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 84.425D Elementary and Secondary School Emergency Relief Fund (ESSER) ? COVID-1984.425U American Rescue Plan ? Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: ReportingCondition:FY 22 Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for ESSER and ARP ESSER did not occur for 72 subawards.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). The FFATA Subaward Reporting System (FSRS) is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards. According to DEED procedures, on a monthly basis DEED staff prepares a submission to FSRS to identify initial subaward obligations greater than $30,000. This submission is reviewed and entered into FSRS. The FSRS printout is compared to the FSRS submission to verify the data was accurately captured.Auditors determined DEED staff did not retain documentation of the FSRS printout or verify the input was accurate. Auditors tested all subawards issued during FY 22 for the ESSER and ARP ESSER subprograms. Of the 75 subawards tested, 72 subawards were not reported, including 48 ARP ESSER subawards totaling $319,460,805 and 24 ESSER subawards totaling $8,854,035.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:The ARP ESSER funding was established in the State?s accounting system as a capital appropriation. Subawards issued under the ARP ESSER appropriation were not reported to FSRS due to a flaw in DEED?s FFATA reporting tool, which was not designed to capture capital appropriations. According to DEED management, resolving prior and current year issues through the FFATA help desk has been difficult. As a result, DEED discontinued FFATA reporting after the April 2022 submission.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEED?s Division of Administrative Services (DAS) director should ensure FFATA reporting procedures are followed and that the FFATA reporting tool is updated to ensure subaward reports are complete.Views of Responsible Officials:The department partially agrees with Finding 2022-026. The department agrees with the count of 72 separate awards not being reported, however the department disagrees with the specific dollar amount listed as ESSER II subawards were not reported. The amount listed is missing $5,483. This amount was awarded to a school district that also received ESSER II SEA Reserve funding under the same grant award and the FFATA reporting system has no mechanism to differentiate between mandatory funding and SEA Reserve funding. Per 2 CFR ? 170.220(b) and FFATA guidance documents, if an award increases to greater than the $30,000 reporting threshold, the full amount of the award must be reported, not just the portion that exceeded the threshold.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DEED management stated the finding amount is missing $5,483. A subaward to the school district totaling $61,165 was included in the finding. Subsequently, an additional subaward was made totaling $5,483, which was not included in the finding because it did not meet the threshold for reporting under Title 2 Code of Federal Regulations Part 170 Appendix A.
Federal Awarding Agency: U.S. Department of Education (USED)Impact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425F HEERF Minority Serving Institution (MSI) PortionFederal Award Number: P425L200248Applicable Compliance Requirement: Allowable Costs/Cost PrinciplesCondition and Context:During the testing of the University of Alaska Fairbanks (UAF) MSI expenditures there was an observed instance, among the forty that were tested, of an interdepartmental transaction being claimed as a reimbursable expenditure. Students from the MacClean House dorm, which is operated by the UAF Residence Life unit, were required to quarantine in the MacLean House dorm, which is operated by the College of Rural and Community Development (CRCD) unit. This resulted in the UAF Residence Life unit paying the CRCD unit for the students' housing costs. This transaction was included as a reimbursable expenditure, despite having a net $0 impact on the income statement.Cause:UAF had not considered the possibility that interdepartmental transactions could be disallowed. Due to a lack of authoritative guidance at the time, the campus relied on the Frequently Asked Questions (FAQ) to determine allowability which made no mention of lost revenue related to interdepartmental transactions.Criteria:Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. In addition, Per Uniform Guidance 200.34 expenditures on the accrual basis may be: cash disbursements for direct charges for property and services, the value of third-party in-kind contributions applied, and the net increase or decrease in the amounts owed by non-federal entity.Effect:The University claimed costs that were not allowable.Questioned Costs:$2,100.97 - ALN 84.425F - Grant Award P425L200248Recommendation:We recommend the University of Alaska Fairbanks should not claim interdepartmental expenditures as institutional expenditures.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-024Federal Awarding Agency: USEDImpact: Significant Deficiency, NoncomplianceAL Number and Title: 84.425D ESSER ? COVID-1984.425U ARP ESSER Fund ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: Subrecipient MonitoringCondition:DEED staff did not document risk assessments for non-Local Educational Agency (LEA) subrecipients.Context:Prior to the ESSER program, DEED rarely made subawards to entities that were not LEAs. Under the ESSER program DEED must subgrant 90 percent of funding to LEAs. The remaining 10 percent of funding can be allocated by DEED with greater discretion and includes subawards to non-LEAs. DEED staff did not conduct ESSER-specific risk assessments for LEAs. Instead, DEED staff relied on risk assessments performed for a different federal program, which was limited to LEAs.Cause:Risk assessments were not performed for non-LEA subrecipients because DEED utilized a risk assessment created for a different federal program, which only made grants to LEAs. According to DEED staff, formalized monitoring tools for non-LEA subrecipients will be implemented beginning in FY 23.Criteria:Title 2 CFR 200.303(a) requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 200.332(b) requires the State to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining appropriate subrecipient monitoring.Effect:Not performing risk assessments and not implementing formalized monitoring tools for all subrecipients could potentially result in inappropriate use of federal awards.Questioned Costs:NoneRecommendation:DEED?s DAS director should update risk assessment and monitoring procedures to include non-LEAs to ensure all ESSER subrecipients receive an appropriate level of monitoring.Views of Responsible Officials:Management agrees with the finding.
Prior Year Finding: 2021-023Federal Awarding Agency: U.S. Department of Education (USED)Impact: Material Weakness, Material NoncomplianceAL Number and Title: 84.425D Elementary and Secondary School Emergency Relief Fund (ESSER) ? COVID-1984.425U American Rescue Plan ? Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ? COVID-19Federal Award Number: S425D210020, S425U210020Applicable Compliance Requirement: ReportingCondition:FY 22 Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for ESSER and ARP ESSER did not occur for 72 subawards.Context:FFATA requires information on federal awards be made available to the public via a single searchable website (www.usaspending.gov). The FFATA Subaward Reporting System (FSRS) is the reporting tool federal awardees, such as the State of Alaska, use to capture and report subaward and executive compensation data regarding first-tier subawards. According to DEED procedures, on a monthly basis DEED staff prepares a submission to FSRS to identify initial subaward obligations greater than $30,000. This submission is reviewed and entered into FSRS. The FSRS printout is compared to the FSRS submission to verify the data was accurately captured.Auditors determined DEED staff did not retain documentation of the FSRS printout or verify the input was accurate. Auditors tested all subawards issued during FY 22 for the ESSER and ARP ESSER subprograms. Of the 75 subawards tested, 72 subawards were not reported, including 48 ARP ESSER subawards totaling $319,460,805 and 24 ESSER subawards totaling $8,854,035.[See Schedule of Findings and Questioned Costs for chart/table.]Cause:The ARP ESSER funding was established in the State?s accounting system as a capital appropriation. Subawards issued under the ARP ESSER appropriation were not reported to FSRS due to a flaw in DEED?s FFATA reporting tool, which was not designed to capture capital appropriations. According to DEED management, resolving prior and current year issues through the FFATA help desk has been difficult. As a result, DEED discontinued FFATA reporting after the April 2022 submission.Criteria:Title 2 CFR 200.303 requires the State to establish and maintain effective internal control over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the grant awards.Title 2 CFR 170 states federal award recipients are required to report each subaward that obligates $30,000 or more in federal funds. This information must be reported no later than the end of the month following the month in which the obligation was made; include information about each obligating action in accordance with submission instructions; and include the names and total compensation of each of the subrecipient?s five most highly compensated executives if revenue thresholds are met and the executive compensation is not available to the public.Effect:Failure to comply with FFATA reporting requirements reduces transparency, impairs decision-making, and may potentially jeopardize future federal funding.Questioned Costs:NoneRecommendation:DEED?s Division of Administrative Services (DAS) director should ensure FFATA reporting procedures are followed and that the FFATA reporting tool is updated to ensure subaward reports are complete.Views of Responsible Officials:The department partially agrees with Finding 2022-026. The department agrees with the count of 72 separate awards not being reported, however the department disagrees with the specific dollar amount listed as ESSER II subawards were not reported. The amount listed is missing $5,483. This amount was awarded to a school district that also received ESSER II SEA Reserve funding under the same grant award and the FFATA reporting system has no mechanism to differentiate between mandatory funding and SEA Reserve funding. Per 2 CFR ? 170.220(b) and FFATA guidance documents, if an award increases to greater than the $30,000 reporting threshold, the full amount of the award must be reported, not just the portion that exceeded the threshold.Auditor?s Concluding Remarks:Management?s response did not persuade the auditor to revise the finding. DEED management stated the finding amount is missing $5,483. A subaward to the school district totaling $61,165 was included in the finding. Subsequently, an additional subaward was made totaling $5,483, which was not included in the finding because it did not meet the threshold for reporting under Title 2 Code of Federal Regulations Part 170 Appendix A.