Audit 315808

2023-001 Eligibility Prior Year Finding Number: 2022-003 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations § 602(a)(1)(B)(iii) requires each state to create a written document that sets forth the objective criteria for the delivery of benefits and the determination of eligibility. The Minnesota Department of Human Services’ State Plan for Temporary Assistance for Needy Families (TANF) and Minn. Stat. § 256J.10 establish the general eligibility requirements for TANF benefits. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • two case files where the asset amounts listed were not supported by documentation on file. • one case file where the income amount in MAXIS was input incorrectly and did not agree to the supporting documentation on file. • one case file where the application completed by the participant was incomplete. Questioned Costs: None. Context: The State of Minnesota and MNPrairie split the eligibility determination process. Pursuant to Minnesota statutes, MNPrairie performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly, supported, and obtained or retained. Recommendation: We recommend MNPrairie implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, the information is properly input or updated in MAXIS, and issues are followed up on in a timely manner. In addition, consideration should be given to providing further training to program personnel. View of Responsible Official: Acknowledge.

2023-002 Child Support Non-Cooperation Prior Year Finding Number: 2022-004 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 45 U.S. Code of Federal Regulations § 264.30 states: “What procedures exist to ensure cooperation with the child support enforcement requirements? (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. (b) If the IV-D agency determines that an individual is not cooperating, and the individual does not qualify for a good cause or other exception established by the State agency responsible for making good cause determinations in accordance with section 454(29) of the Act or for a good cause domestic violence waiver granted in accordance with § 260.52 of this chapter, then the IV-D agency must notify the IV-A agency promptly. (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program." Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. Part of the eligibility determination process is cooperating with child support requirements. MNPrairie must reduce benefits when a case is in child support non-cooperation status. In a sample of 15 case files reviewed, two case files had identified errors related to improper timing of reduced benefits for case files in non-cooperation status. The sanctions that are imposed on casefiles are not reviewed by someone after they are entered into the system. Questioned Costs: None. Context: Child support non-cooperation is determined by MNPrairie, and the Providing Resources to Improve Support in Minnesota (PRISM) system maintains the information and recipient status. When a Child Support Officer at MNPrairie updates PRISM to show non-cooperation, it interfaces with MAXIS. From this interface, MAXIS receives a Worker’s Daily Report (DAIL) message which notifies the entity of child support non-cooperation. MNPrairie is responsible for updating the recipient’s record in MAXIS, including entering child support sanctions, or closing a case on the seventh occurrence of noncompliance. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Noncompliance with Title 45 U.S. Code of Federal Regulations § 264.30. Benefit overpayments could be paid when child support non-cooperation is not properly processed for a benefit month. Cause: Program personnel entering case data into MAXIS reported the participant was homeless, which does not prevent sanctions of benefits. Recommendation: We recommend MNPrairie implement procedures to ensure child support non-cooperation casefiles benefits are being reduced as necessary in MAXIS. View of Responsible Official: Acknowledge.

2023-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Enforcement Award Number and Year: 2301MNCSES and 2301MNCEST; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Enforcement program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions. Payroll for certain staff is required to be allocated between the 2550 report and the DHS-2556 report. Effective internal control includes documentation of approval for claims. Condition: The following deviations were noted in a sample of 40 expenditures tested: • two claims did not have documentation to support the supervisor’s approval, and • four employees’ timesheets for office support staff were not allocated correctly between income maintenance and social services and therefore the payroll expenditures included on the DHS quarterly reports were not accurate. Questioned Costs: Questioned costs identified were less than $25,000. Context: The documentation of the approval of the claims could not be provided for review. DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to MNPrairie are for applicable federal program activities/costs. For sampled items, the sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Unapproved claims could result in unallowable costs being included in the DHS quarterly reports. In addition, approximately $63,000 in payroll expenditures were reported on the DHS-2550 report which should have been reported on the DHS Social Service DHS-2556 report. The federal funding is allocated differently and at different rates for each report; it is likely the federal funds received related to these costs were inaccurate. Cause: MNPrairie indicated the two claims were reviewed but the documentation to support this review and approval for payment was overlooked by staff completing the procedure. In addition, MNPrairie noted the office support staff employees did not have the correct payroll allocations in the payroll system in error. Recommendation: We recommend MNPrairie maintain documentation to support the review and approval of all claims to ensure costs are allowable to be reported on the DHS-2550 report. In addition, we recommend the DHS-2550 report be completed in accordance with DHS instructions and any reports submitted with costs allocated incorrectly should be corrected and resubmitted. View of Responsible Official: Acknowledge.

2023-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Enforcement Award Number and Year: 2301MNCSES and 2301MNCEST; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Enforcement program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions. Payroll for certain staff is required to be allocated between the 2550 report and the DHS-2556 report. Effective internal control includes documentation of approval for claims. Condition: The following deviations were noted in a sample of 40 expenditures tested: • two claims did not have documentation to support the supervisor’s approval, and • four employees’ timesheets for office support staff were not allocated correctly between income maintenance and social services and therefore the payroll expenditures included on the DHS quarterly reports were not accurate. Questioned Costs: Questioned costs identified were less than $25,000. Context: The documentation of the approval of the claims could not be provided for review. DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to MNPrairie are for applicable federal program activities/costs. For sampled items, the sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Unapproved claims could result in unallowable costs being included in the DHS quarterly reports. In addition, approximately $63,000 in payroll expenditures were reported on the DHS-2550 report which should have been reported on the DHS Social Service DHS-2556 report. The federal funding is allocated differently and at different rates for each report; it is likely the federal funds received related to these costs were inaccurate. Cause: MNPrairie indicated the two claims were reviewed but the documentation to support this review and approval for payment was overlooked by staff completing the procedure. In addition, MNPrairie noted the office support staff employees did not have the correct payroll allocations in the payroll system in error. Recommendation: We recommend MNPrairie maintain documentation to support the review and approval of all claims to ensure costs are allowable to be reported on the DHS-2550 report. In addition, we recommend the DHS-2550 report be completed in accordance with DHS instructions and any reports submitted with costs allocated incorrectly should be corrected and resubmitted. View of Responsible Official: Acknowledge.

2023-001 Eligibility Prior Year Finding Number: 2022-003 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations § 602(a)(1)(B)(iii) requires each state to create a written document that sets forth the objective criteria for the delivery of benefits and the determination of eligibility. The Minnesota Department of Human Services’ State Plan for Temporary Assistance for Needy Families (TANF) and Minn. Stat. § 256J.10 establish the general eligibility requirements for TANF benefits. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • two case files where the asset amounts listed were not supported by documentation on file. • one case file where the income amount in MAXIS was input incorrectly and did not agree to the supporting documentation on file. • one case file where the application completed by the participant was incomplete. Questioned Costs: None. Context: The State of Minnesota and MNPrairie split the eligibility determination process. Pursuant to Minnesota statutes, MNPrairie performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly, supported, and obtained or retained. Recommendation: We recommend MNPrairie implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, the information is properly input or updated in MAXIS, and issues are followed up on in a timely manner. In addition, consideration should be given to providing further training to program personnel. View of Responsible Official: Acknowledge.

2023-002 Child Support Non-Cooperation Prior Year Finding Number: 2022-004 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 45 U.S. Code of Federal Regulations § 264.30 states: “What procedures exist to ensure cooperation with the child support enforcement requirements? (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. (b) If the IV-D agency determines that an individual is not cooperating, and the individual does not qualify for a good cause or other exception established by the State agency responsible for making good cause determinations in accordance with section 454(29) of the Act or for a good cause domestic violence waiver granted in accordance with § 260.52 of this chapter, then the IV-D agency must notify the IV-A agency promptly. (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program." Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. Part of the eligibility determination process is cooperating with child support requirements. MNPrairie must reduce benefits when a case is in child support non-cooperation status. In a sample of 15 case files reviewed, two case files had identified errors related to improper timing of reduced benefits for case files in non-cooperation status. The sanctions that are imposed on casefiles are not reviewed by someone after they are entered into the system. Questioned Costs: None. Context: Child support non-cooperation is determined by MNPrairie, and the Providing Resources to Improve Support in Minnesota (PRISM) system maintains the information and recipient status. When a Child Support Officer at MNPrairie updates PRISM to show non-cooperation, it interfaces with MAXIS. From this interface, MAXIS receives a Worker’s Daily Report (DAIL) message which notifies the entity of child support non-cooperation. MNPrairie is responsible for updating the recipient’s record in MAXIS, including entering child support sanctions, or closing a case on the seventh occurrence of noncompliance. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Noncompliance with Title 45 U.S. Code of Federal Regulations § 264.30. Benefit overpayments could be paid when child support non-cooperation is not properly processed for a benefit month. Cause: Program personnel entering case data into MAXIS reported the participant was homeless, which does not prevent sanctions of benefits. Recommendation: We recommend MNPrairie implement procedures to ensure child support non-cooperation casefiles benefits are being reduced as necessary in MAXIS. View of Responsible Official: Acknowledge.

2023-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Enforcement Award Number and Year: 2301MNCSES and 2301MNCEST; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Enforcement program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions. Payroll for certain staff is required to be allocated between the 2550 report and the DHS-2556 report. Effective internal control includes documentation of approval for claims. Condition: The following deviations were noted in a sample of 40 expenditures tested: • two claims did not have documentation to support the supervisor’s approval, and • four employees’ timesheets for office support staff were not allocated correctly between income maintenance and social services and therefore the payroll expenditures included on the DHS quarterly reports were not accurate. Questioned Costs: Questioned costs identified were less than $25,000. Context: The documentation of the approval of the claims could not be provided for review. DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to MNPrairie are for applicable federal program activities/costs. For sampled items, the sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Unapproved claims could result in unallowable costs being included in the DHS quarterly reports. In addition, approximately $63,000 in payroll expenditures were reported on the DHS-2550 report which should have been reported on the DHS Social Service DHS-2556 report. The federal funding is allocated differently and at different rates for each report; it is likely the federal funds received related to these costs were inaccurate. Cause: MNPrairie indicated the two claims were reviewed but the documentation to support this review and approval for payment was overlooked by staff completing the procedure. In addition, MNPrairie noted the office support staff employees did not have the correct payroll allocations in the payroll system in error. Recommendation: We recommend MNPrairie maintain documentation to support the review and approval of all claims to ensure costs are allowable to be reported on the DHS-2550 report. In addition, we recommend the DHS-2550 report be completed in accordance with DHS instructions and any reports submitted with costs allocated incorrectly should be corrected and resubmitted. View of Responsible Official: Acknowledge.

2023-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Enforcement Award Number and Year: 2301MNCSES and 2301MNCEST; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Enforcement program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions. Payroll for certain staff is required to be allocated between the 2550 report and the DHS-2556 report. Effective internal control includes documentation of approval for claims. Condition: The following deviations were noted in a sample of 40 expenditures tested: • two claims did not have documentation to support the supervisor’s approval, and • four employees’ timesheets for office support staff were not allocated correctly between income maintenance and social services and therefore the payroll expenditures included on the DHS quarterly reports were not accurate. Questioned Costs: Questioned costs identified were less than $25,000. Context: The documentation of the approval of the claims could not be provided for review. DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to MNPrairie are for applicable federal program activities/costs. For sampled items, the sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Unapproved claims could result in unallowable costs being included in the DHS quarterly reports. In addition, approximately $63,000 in payroll expenditures were reported on the DHS-2550 report which should have been reported on the DHS Social Service DHS-2556 report. The federal funding is allocated differently and at different rates for each report; it is likely the federal funds received related to these costs were inaccurate. Cause: MNPrairie indicated the two claims were reviewed but the documentation to support this review and approval for payment was overlooked by staff completing the procedure. In addition, MNPrairie noted the office support staff employees did not have the correct payroll allocations in the payroll system in error. Recommendation: We recommend MNPrairie maintain documentation to support the review and approval of all claims to ensure costs are allowable to be reported on the DHS-2550 report. In addition, we recommend the DHS-2550 report be completed in accordance with DHS instructions and any reports submitted with costs allocated incorrectly should be corrected and resubmitted. View of Responsible Official: Acknowledge.