Audit 321906

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Eligibility Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.403 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. Condition: During testing of eligibility requirements, it was noted there are no reviews being completed over MAXIS nor METS casefiles. Questioned Costs: None Context: No supervisor or peer review is being completed over METS and MAXIS casefiles. Cause: Due to staff turnover, the County did not have time to complete the reviews. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: No. Recommendation: We recommend that a supervisor or team lead perform regular internal reviews on MAXIS and METS casefiles to determine that proper policies and procedures are being followed in determining eligibility. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: All staff coded to Section A on the 2550 Income Maintenance report should be included on the random moment study quarterly listings provided to MN DHS. Condition: For one of two Income Maintenance Random Moment Study listings tested, CLA noted one employee who was improperly excluded from the time study listing. Questioned Costs: Unable to determine. Context: One of two Income Maintenance Random Moment Study listings tested had one employee who was improperly excluded from the time study listing. Cause: Management oversight. Effect: Ineligible payroll costs could be reported on the 2550 report. Repeat Finding: No. Recommendation: We recommend procedures and controls be implemented to ensure each quarterly listing is properly reviewed and accurate employees are on the listings. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services Fund quarterly report has further guidance on what is allowed to be reported. Condition: During testing of general disbursements, it was noted that for one of the 40 general disbursements tested, costs were not allowable. Questioned Costs: Amount less than $25,000. Context: One of 40 general disbursements tested had costs that are not allowable under program guidance. Cause: Management oversight. Effect: Ineligible costs are reported on the 2556 report. Repeat Finding: No. Recommendation: We recommend that the County continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Special Provisions Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: According to the contract between the Minnesota Department of Human Services and Nobles County, it is the responsibility of the Fiscal Reporting and Payment Agent (the County) to review all submitted cost reports for accuracy, as well as timeliness, and retain a paper copy of all members’ submitted reports. Six years of records should be kept on file to ensure compliance with the LCTS contract. It is also the responsibility of the County, as the fiscal liaison between the state and collaborative members, to distribute the LCTS funding to the various collaborative members no later than 30 days after receiving the quarterly payments from the state. Condition: The County does not retain printed copies of the participating collaborative members’ reports. There is no physical evidence kept on file that the County is reviewing these reports for accuracy and timeliness. For the second half of 2023, the County was not remitting the LCTS funding to the Collaborative within the required timeline of the LCTS contract. Questioned Costs: None. Context: For two of two quarters tested, the County did not have printed 3220 LCTS reports on file for collaborative members and did not review the reports. For one of two quarters tested, the funds were not remitted to the collaborative members within the 30 day required timeframe. Cause: Turnover at the collaborative and lack of review of the requirements of the contract by the County. Effect: The County is not in compliance with the LCTS contract with the state. Collaborative members could be submitting inaccurate reports or filing late, and funding is not remitted timely. Repeat Finding: No. Recommendation: We recommend that the County review the contract with MN DHS, and implement proper review and approval procedures for all LCTS reports. We recommend that paper copies are kept on file for the required timeframe. We recommend that the County implement procedures to remit the quarterly funding to the collaborative in a timely manner. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Eligibility Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.403 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. Condition: During testing of eligibility requirements, it was noted there are no reviews being completed over MAXIS nor METS casefiles. Questioned Costs: None Context: No supervisor or peer review is being completed over METS and MAXIS casefiles. Cause: Due to staff turnover, the County did not have time to complete the reviews. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: No. Recommendation: We recommend that a supervisor or team lead perform regular internal reviews on MAXIS and METS casefiles to determine that proper policies and procedures are being followed in determining eligibility. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: All staff coded to Section A on the 2550 Income Maintenance report should be included on the random moment study quarterly listings provided to MN DHS. Condition: For one of two Income Maintenance Random Moment Study listings tested, CLA noted one employee who was improperly excluded from the time study listing. Questioned Costs: Unable to determine. Context: One of two Income Maintenance Random Moment Study listings tested had one employee who was improperly excluded from the time study listing. Cause: Management oversight. Effect: Ineligible payroll costs could be reported on the 2550 report. Repeat Finding: No. Recommendation: We recommend procedures and controls be implemented to ensure each quarterly listing is properly reviewed and accurate employees are on the listings. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services Fund quarterly report has further guidance on what is allowed to be reported. Condition: During testing of general disbursements, it was noted that for one of the 40 general disbursements tested, costs were not allowable. Questioned Costs: Amount less than $25,000. Context: One of 40 general disbursements tested had costs that are not allowable under program guidance. Cause: Management oversight. Effect: Ineligible costs are reported on the 2556 report. Repeat Finding: No. Recommendation: We recommend that the County continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Special Provisions Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: According to the contract between the Minnesota Department of Human Services and Nobles County, it is the responsibility of the Fiscal Reporting and Payment Agent (the County) to review all submitted cost reports for accuracy, as well as timeliness, and retain a paper copy of all members’ submitted reports. Six years of records should be kept on file to ensure compliance with the LCTS contract. It is also the responsibility of the County, as the fiscal liaison between the state and collaborative members, to distribute the LCTS funding to the various collaborative members no later than 30 days after receiving the quarterly payments from the state. Condition: The County does not retain printed copies of the participating collaborative members’ reports. There is no physical evidence kept on file that the County is reviewing these reports for accuracy and timeliness. For the second half of 2023, the County was not remitting the LCTS funding to the Collaborative within the required timeline of the LCTS contract. Questioned Costs: None. Context: For two of two quarters tested, the County did not have printed 3220 LCTS reports on file for collaborative members and did not review the reports. For one of two quarters tested, the funds were not remitted to the collaborative members within the 30 day required timeframe. Cause: Turnover at the collaborative and lack of review of the requirements of the contract by the County. Effect: The County is not in compliance with the LCTS contract with the state. Collaborative members could be submitting inaccurate reports or filing late, and funding is not remitted timely. Repeat Finding: No. Recommendation: We recommend that the County review the contract with MN DHS, and implement proper review and approval procedures for all LCTS reports. We recommend that paper copies are kept on file for the required timeframe. We recommend that the County implement procedures to remit the quarterly funding to the collaborative in a timely manner. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Eligibility Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.403 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. Condition: During testing of eligibility requirements, it was noted there are no reviews being completed over MAXIS nor METS casefiles. Questioned Costs: None Context: No supervisor or peer review is being completed over METS and MAXIS casefiles. Cause: Due to staff turnover, the County did not have time to complete the reviews. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: No. Recommendation: We recommend that a supervisor or team lead perform regular internal reviews on MAXIS and METS casefiles to determine that proper policies and procedures are being followed in determining eligibility. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: All staff coded to Section A on the 2550 Income Maintenance report should be included on the random moment study quarterly listings provided to MN DHS. Condition: For one of two Income Maintenance Random Moment Study listings tested, CLA noted one employee who was improperly excluded from the time study listing. Questioned Costs: Unable to determine. Context: One of two Income Maintenance Random Moment Study listings tested had one employee who was improperly excluded from the time study listing. Cause: Management oversight. Effect: Ineligible payroll costs could be reported on the 2550 report. Repeat Finding: No. Recommendation: We recommend procedures and controls be implemented to ensure each quarterly listing is properly reviewed and accurate employees are on the listings. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services Fund quarterly report has further guidance on what is allowed to be reported. Condition: During testing of general disbursements, it was noted that for one of the 40 general disbursements tested, costs were not allowable. Questioned Costs: Amount less than $25,000. Context: One of 40 general disbursements tested had costs that are not allowable under program guidance. Cause: Management oversight. Effect: Ineligible costs are reported on the 2556 report. Repeat Finding: No. Recommendation: We recommend that the County continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Special Provisions Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: According to the contract between the Minnesota Department of Human Services and Nobles County, it is the responsibility of the Fiscal Reporting and Payment Agent (the County) to review all submitted cost reports for accuracy, as well as timeliness, and retain a paper copy of all members’ submitted reports. Six years of records should be kept on file to ensure compliance with the LCTS contract. It is also the responsibility of the County, as the fiscal liaison between the state and collaborative members, to distribute the LCTS funding to the various collaborative members no later than 30 days after receiving the quarterly payments from the state. Condition: The County does not retain printed copies of the participating collaborative members’ reports. There is no physical evidence kept on file that the County is reviewing these reports for accuracy and timeliness. For the second half of 2023, the County was not remitting the LCTS funding to the Collaborative within the required timeline of the LCTS contract. Questioned Costs: None. Context: For two of two quarters tested, the County did not have printed 3220 LCTS reports on file for collaborative members and did not review the reports. For one of two quarters tested, the funds were not remitted to the collaborative members within the 30 day required timeframe. Cause: Turnover at the collaborative and lack of review of the requirements of the contract by the County. Effect: The County is not in compliance with the LCTS contract with the state. Collaborative members could be submitting inaccurate reports or filing late, and funding is not remitted timely. Repeat Finding: No. Recommendation: We recommend that the County review the contract with MN DHS, and implement proper review and approval procedures for all LCTS reports. We recommend that paper copies are kept on file for the required timeframe. We recommend that the County implement procedures to remit the quarterly funding to the collaborative in a timely manner. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Eligibility Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.403 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. Condition: During testing of eligibility requirements, it was noted there are no reviews being completed over MAXIS nor METS casefiles. Questioned Costs: None Context: No supervisor or peer review is being completed over METS and MAXIS casefiles. Cause: Due to staff turnover, the County did not have time to complete the reviews. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: No. Recommendation: We recommend that a supervisor or team lead perform regular internal reviews on MAXIS and METS casefiles to determine that proper policies and procedures are being followed in determining eligibility. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: All staff coded to Section A on the 2550 Income Maintenance report should be included on the random moment study quarterly listings provided to MN DHS. Condition: For one of two Income Maintenance Random Moment Study listings tested, CLA noted one employee who was improperly excluded from the time study listing. Questioned Costs: Unable to determine. Context: One of two Income Maintenance Random Moment Study listings tested had one employee who was improperly excluded from the time study listing. Cause: Management oversight. Effect: Ineligible payroll costs could be reported on the 2550 report. Repeat Finding: No. Recommendation: We recommend procedures and controls be implemented to ensure each quarterly listing is properly reviewed and accurate employees are on the listings. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Allowable Costs/Allowable Activities Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services Fund quarterly report has further guidance on what is allowed to be reported. Condition: During testing of general disbursements, it was noted that for one of the 40 general disbursements tested, costs were not allowable. Questioned Costs: Amount less than $25,000. Context: One of 40 general disbursements tested had costs that are not allowable under program guidance. Cause: Management oversight. Effect: Ineligible costs are reported on the 2556 report. Repeat Finding: No. Recommendation: We recommend that the County continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Special Provisions Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: According to the contract between the Minnesota Department of Human Services and Nobles County, it is the responsibility of the Fiscal Reporting and Payment Agent (the County) to review all submitted cost reports for accuracy, as well as timeliness, and retain a paper copy of all members’ submitted reports. Six years of records should be kept on file to ensure compliance with the LCTS contract. It is also the responsibility of the County, as the fiscal liaison between the state and collaborative members, to distribute the LCTS funding to the various collaborative members no later than 30 days after receiving the quarterly payments from the state. Condition: The County does not retain printed copies of the participating collaborative members’ reports. There is no physical evidence kept on file that the County is reviewing these reports for accuracy and timeliness. For the second half of 2023, the County was not remitting the LCTS funding to the Collaborative within the required timeline of the LCTS contract. Questioned Costs: None. Context: For two of two quarters tested, the County did not have printed 3220 LCTS reports on file for collaborative members and did not review the reports. For one of two quarters tested, the funds were not remitted to the collaborative members within the 30 day required timeframe. Cause: Turnover at the collaborative and lack of review of the requirements of the contract by the County. Effect: The County is not in compliance with the LCTS contract with the state. Collaborative members could be submitting inaccurate reports or filing late, and funding is not remitted timely. Repeat Finding: No. Recommendation: We recommend that the County review the contract with MN DHS, and implement proper review and approval procedures for all LCTS reports. We recommend that paper copies are kept on file for the required timeframe. We recommend that the County implement procedures to remit the quarterly funding to the collaborative in a timely manner. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.

Federal Agency: U.S. Department of Human Services Federal Program Name: Medical Assistance (Medicaid Cluster) Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5ADM, 2305MN5MAP; 2023 Pass-Through Agency: Minnesota Department of Human Services Compliance Requirement Affected: Reporting Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR 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. Additionally, 2 CFR 200.403 lists general criteria for allowability of costs under federal awards, and the 2556 Social Services quarterly report has further guidance on what is allowed to be reported. Condition: There is no formal review being completed on reports that are required to be submitted to MN DHS. The quarterly 3220 LCTS and annual LCTS Collaborative reports were not reviewed. The annual LCTS Spending Report was submitted after the due date. The County reported $121,563 in disbursements on the 2556 Social Services quarterly report that were funded with other state or federal grants and included no revenue offset in the required line of the report. Questioned Costs: Amount less than $25,000. Context: No formal review is being completed on two of the four quarterly 3220 LCTS reports tested and one of one annual LCTS Collaborative report tested. For one of one annual LCTS Spending report, the report was submitted after the due date and a review was not in place to ensure compliance. Within two of the two 2556 Social Services quarterly reports that were tested, it was found that disbursements funded by other sources were included on the report. Cause: Turnover and lack of review of the requirements of the 2556 instructions by the County. Effect: Ineligible costs are being reported and the reports are not being submitted timely. Repeat Finding: No. Recommendation: We recommend that the County implement review procedures to ensure that the reports are submitted timely and accurately, and record of review is kept on file. Views of responsible officials: There is no disagreement with the audit finding. There is a corrective action plan in place.