Audit 322900

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Numbers: 034-070-010 Federal Award Identification Number and Year: 034-070-010, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: In September 2023, the county requested reimbursement for project costs totaling $221,902 for expenditures incurred during 2020. Questioned Costs: None. Context: During our testing of reports submitted in 2023, it was noted the County has not submitted reimbursement requests timely. Cause: The County does not have policies or procedures in place to ensure reimbursement requests are submitted timely after costs are incurred. Effect: By submitting untimely reimbursement requests, the County is not receiving funds it is owed in a timely manner, which has the potential to cause cash flow shortages. It also increases the likelihood that federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are not accurate, causing the potential of the SEFA to be materially misstated. Repeat Finding: Yes, Finding 2022-004. Recommendation: We recommend the County review internal controls currently in place and design and implement procedures to request reimbursements timelier and to submit requests for reimbursements on at least a quarterly basis. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to ensure timely submission of reimbursement requests.

Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0727, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: No formal evidence of review of the report was kept on file. Questioned Costs: None. Context: County Administrator was not formally signing off indicating review of report submissions. Cause: The County does not have policies or procedures in place to ensure review was taking place. Effect: The County could be reporting inaccurate information. Repeat Finding: No. Recommendation: It is recommended that the County sign off to indicate review of SLFRF Report. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County Administrator will start reviewing SLFRF reports before submitting.

Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0727, 2023 Compliance Requirement Affected: Suspension and Debarment Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: Physical evidence that the County ensured vendor was not suspended or debarred was not retained. Questioned Costs: None. Context: For two of five transactions tested for suspension and debarment, the County did not have documentation that the verification was done. Cause: The County does not have policies or procedures in place to ensure proper evidence with compliance requirements are retained. Effect: County could be using a vendor that is suspended or debarred at the time of the transaction. Repeat Finding: No. Recommendation: It is recommended that the County ensure properly language related to suspension and debarment is included in the contract, or other records are kept on file to support a verification was done. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: No formal evidence of review of the foster care report was kept on file. Questioned Costs: None. Context: State system does not have the ability to indicate who reviewed the report, and formal evidence of review was not kept on file. Cause: The County does not have policies or procedures in place to ensure review was taking place. Effect: The County could be reporting inaccurate information. Repeat Finding: No. Recommendation: It is recommended that the County implement procedures to review the foster care report and retain evidence of the review on file. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to review the foster care report and retain evidence of the review on file.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: The County's internal controls do not include a process to retain documentation of review when the main reviewer is out of the office. Questioned Costs: None. Context: The State system does not have the ability to document electronic review of the disbursements when the Fiscal Supervisor is out of the office, and alternative physical evidence of review was not kept on file. In our testing, we noted that 7 of 19 SSIS disbursements tested did not documentation of review. Cause: The County does not have policies or procedures in place to document review when reviewer is out of the office. Effect: Errors in the disbursements could occur. Repeat Finding: No. Recommendation: It is recommended that the County implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 Social Services Fund Quarterly Expense Report (2256) also has further guidance on what can be reported. Condition: For 1 of 40 disbursements tested, it was noted the costs were not allowable. Questioned Costs: $620. Context: Auditor tested one warrant coded to the DHS Social Services Fund Quarterly Expense Report (2256) that fell in a category explicitly excluded from allowability according to the report instructions. Cause: Level of invoice detail and client's understanding of the instructions for what can be coded. Effect: Ineligible costs could be reported. 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 and Planned Corrective Actions: There is no disagreement with the audit finding. The County will continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Transportation Federal Program Name: Highway Planning and Construction Assistance Listing Number: 20.205 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Numbers: 034-070-010 Federal Award Identification Number and Year: 034-070-010, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: In September 2023, the county requested reimbursement for project costs totaling $221,902 for expenditures incurred during 2020. Questioned Costs: None. Context: During our testing of reports submitted in 2023, it was noted the County has not submitted reimbursement requests timely. Cause: The County does not have policies or procedures in place to ensure reimbursement requests are submitted timely after costs are incurred. Effect: By submitting untimely reimbursement requests, the County is not receiving funds it is owed in a timely manner, which has the potential to cause cash flow shortages. It also increases the likelihood that federal expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) are not accurate, causing the potential of the SEFA to be materially misstated. Repeat Finding: Yes, Finding 2022-004. Recommendation: We recommend the County review internal controls currently in place and design and implement procedures to request reimbursements timelier and to submit requests for reimbursements on at least a quarterly basis. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to ensure timely submission of reimbursement requests.

Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0727, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: No formal evidence of review of the report was kept on file. Questioned Costs: None. Context: County Administrator was not formally signing off indicating review of report submissions. Cause: The County does not have policies or procedures in place to ensure review was taking place. Effect: The County could be reporting inaccurate information. Repeat Finding: No. Recommendation: It is recommended that the County sign off to indicate review of SLFRF Report. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County Administrator will start reviewing SLFRF reports before submitting.

Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0727, 2023 Compliance Requirement Affected: Suspension and Debarment Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: Physical evidence that the County ensured vendor was not suspended or debarred was not retained. Questioned Costs: None. Context: For two of five transactions tested for suspension and debarment, the County did not have documentation that the verification was done. Cause: The County does not have policies or procedures in place to ensure proper evidence with compliance requirements are retained. Effect: County could be using a vendor that is suspended or debarred at the time of the transaction. Repeat Finding: No. Recommendation: It is recommended that the County ensure properly language related to suspension and debarment is included in the contract, or other records are kept on file to support a verification was done. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Reporting Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: No formal evidence of review of the foster care report was kept on file. Questioned Costs: None. Context: State system does not have the ability to indicate who reviewed the report, and formal evidence of review was not kept on file. Cause: The County does not have policies or procedures in place to ensure review was taking place. Effect: The County could be reporting inaccurate information. Repeat Finding: No. Recommendation: It is recommended that the County implement procedures to review the foster care report and retain evidence of the review on file. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to review the foster care report and retain evidence of the review on file.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Condition: The County's internal controls do not include a process to retain documentation of review when the main reviewer is out of the office. Questioned Costs: None. Context: The State system does not have the ability to document electronic review of the disbursements when the Fiscal Supervisor is out of the office, and alternative physical evidence of review was not kept on file. In our testing, we noted that 7 of 19 SSIS disbursements tested did not documentation of review. Cause: The County does not have policies or procedures in place to document review when reviewer is out of the office. Effect: Errors in the disbursements could occur. Repeat Finding: No. Recommendation: It is recommended that the County implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2301MNFOST Federal Award Identification Number and Year: 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 Social Services Fund Quarterly Expense Report (2256) also has further guidance on what can be reported. Condition: For 1 of 40 disbursements tested, it was noted the costs were not allowable. Questioned Costs: $620. Context: Auditor tested one warrant coded to the DHS Social Services Fund Quarterly Expense Report (2256) that fell in a category explicitly excluded from allowability according to the report instructions. Cause: Level of invoice detail and client's understanding of the instructions for what can be coded. Effect: Ineligible costs could be reported. 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 and Planned Corrective Actions: There is no disagreement with the audit finding. The County will continue to be diligent in their review of what is allowable when coding to certain account codes that flow into the DHS reports.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 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. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2023 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2022-005 over Medicaid Cluster only Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2305MN5MAP, 2305MN5ADM, 2301MNFOST Federal Award Identification Number and Year: 2305MN5MAP, 2305MN5ADM, 2301MNFOST, 2023 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending 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 and section 1 of the 2556 report should be included on the RMS listing provided to MN DHS. Condition: Inconsistencies noted between the time study listing and the payroll report codes related to those listings. Questioned Costs: None. Context: For 1 of 2 IMRMS quarters tested, auditor noted one employee who was improperly excluded from the time study listing. For 1 of 2 quarters of the SSTS tested, auditor noted one employee who had resigned before the cutoff but was not removed from the quarterly time study listing. Through time study testing, auditor noted many instances where employees who were included on the time study were being recorded to the wrong payroll code, and thus the wrong line of the 2550 and 2556 reports. Cause: Fiscal Supervisor who review the time study listing does not have access to make changes in payroll and changes that are requested are not always entered. Effect: Ineligible payroll costs could be reported. Repeat Finding: No. Recommendation: It is recommended that the county streamline the payroll change process between the payroll department and human services department. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will revise procedures around the review of the payroll reports for the human services department.