Audit 350226

Finding No. 2024 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 10,905 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2101HIFCGP 2019 2301HIFOST 2023 2401HIFOST 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximate $46,888 in monthly benefit payments, out of a population of approximately 452 case files which approximated $3.90 million in total annual benefit payments, for testing and noted exceptions in 23 case files as follows: • Four case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Three case files where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • Thirteen case files where the state, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Six case files where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the child’s IV E eligibility was not determined before implementing the foster care maintenance payments program provisions of the Title IV E plan. A similar finding was reported in the prior year as Finding No. 2023 010. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home to reunify the child and family, before the child is determined to be eligible under Title IV E. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 10,905 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2101HIFCGP 2019 2301HIFOST 2023 2401HIFOST 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximate $46,888 in monthly benefit payments, out of a population of approximately 452 case files which approximated $3.90 million in total annual benefit payments, for testing and noted exceptions in 23 case files as follows: • Four case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Three case files where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • Thirteen case files where the state, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Six case files where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the child’s IV E eligibility was not determined before implementing the foster care maintenance payments program provisions of the Title IV E plan. A similar finding was reported in the prior year as Finding No. 2023 010. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home to reunify the child and family, before the child is determined to be eligible under Title IV E. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 006: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 18,613 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2301HIADPT 2023 2401HIADPT 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximates $54,700 in monthly benefit payments, out of a population of approximately 1,359 case files which approximate $12.2 million in total annual benefit payments, for testing and noted exceptions in 33 case files as follows: • Thirteen case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • One case in which the payment was improperly loaded in the system causing a difference between the agreement amount and paid amount. • Six case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Thirteen case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Seven case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • Three case files where the documentation regarding the continuation of the monthly subsidy payments after the child’s 18th birthday was missing. A similar finding was reported in the prior year as Finding No. 2023 008. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contain the information concerning the nature of services. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 006: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 18,613 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2301HIADPT 2023 2401HIADPT 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximates $54,700 in monthly benefit payments, out of a population of approximately 1,359 case files which approximate $12.2 million in total annual benefit payments, for testing and noted exceptions in 33 case files as follows: • Thirteen case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • One case in which the payment was improperly loaded in the system causing a difference between the agreement amount and paid amount. • Six case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Thirteen case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Seven case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • Three case files where the documentation regarding the continuation of the monthly subsidy payments after the child’s 18th birthday was missing. A similar finding was reported in the prior year as Finding No. 2023 008. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contain the information concerning the nature of services. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 007: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,043 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2301HIGARD 2023 2401HIGARD 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $46,100 in monthly benefit payments, out of a population of approximately 363 case files which approximated $3.0 million in total annual benefit payments, for testing and noted exceptions in 19 case files as follows: • Eight case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Six case files where the “difficulty of care” determination was missing or did not match the amount paid and therefore did not have any support for the assistance amount paid. • Five case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing in the case files. A similar finding was reported in the prior year as Finding No. 2023 009. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 671(a)(20)(C), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent instances of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 007: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,043 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2301HIGARD 2023 2401HIGARD 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $46,100 in monthly benefit payments, out of a population of approximately 363 case files which approximated $3.0 million in total annual benefit payments, for testing and noted exceptions in 19 case files as follows: • Eight case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Six case files where the “difficulty of care” determination was missing or did not match the amount paid and therefore did not have any support for the assistance amount paid. • Five case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing in the case files. A similar finding was reported in the prior year as Finding No. 2023 009. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 671(a)(20)(C), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent instances of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 010: Eligibility (Material Weakness) Questioned cost: $ 1,787 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $35,500 of monthly benefit payments, out of a population of approximately 3,700 cases, representing approximately $40.1 million of benefit payments, for testing and noted exceptions in four case files as follows: • One case file where the benefit payment was incorrectly calculated. • Three case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. A similar finding was reported in the prior year as Finding No. 2023 016. Criteria The State of Hawaii TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. Effect Failure to follow the established procedures in place over the eligibility determination process resulted in non-compliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issues when they arise. Recommendation We recommend that the Department work with Administration for Children and Families to determine what remediation actions, if any, are required.

Finding No. 2024 011: Reporting, Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 714 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 3,500 participants whose work participation activity was reported on the ACF 199 and noted exceptions with three participants as follows: • We noted one instance where an eligible work participant was participating, but the Department did not retain a supporting paystub. • We noted one instance where an eligible work participant was participating, but the hours in the eligibility system did not match the supporting paystub. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as required to participate and participating but not meeting minimum participation requirements. A similar finding was reported in the prior year as Finding No. 2023 014. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in non compliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 012: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 405 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted one instance where the Department’s records did not support the use of the income information obtained through the Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. A similar finding was reported in the prior year as Finding No. 2023 011. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS system, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to evaluate benefit amounts resulted in potential over payment of benefits. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024 009: Reporting (Significant Deficiency) $ - Federal Agency: U.S. Department of Education AL Number and Title: 84.126 – Rehabilitation Services – Vocational Rehabilitation Grants to States Award Number and Award Year: H126A220015 2021 – 2024 H126A230015 2022 – 2024 H126A240015 2023 – 2024 Repeat Finding? No Condition We selected a non statistical sample of 60 participant case files, out of a population of 4,419 based on participants from two quarterly reports, for testing and noted the following: • One participant tested had discrepancies between the start date of employment in primary occupation per the case management system and per the supporting documentation. Criteria Pursuant to Rehabilitation Services Administration Policy Directive RSA PD 19 03 and 34 CFR 361.47, State Vocational Rehabilitation agencies are required to maintain supporting documentation (either hard copies or scanned copies) particularly regarding eligibility determinations, development of the individualized plan for employment, services period, and case closure in the service record or case management system. Data reported in the case management system must match the supporting documentation for data elements containing critical information. Effect Without the appropriate documentation to support the key data elements reported, the Department is unable to demonstrate its compliance with the reporting requirements. Cause and View of Responsible Officials Although the Department has policies and procedures in place to ensure that the supporting documents are maintained, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the Federal requirements.

Finding No. 2024 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 10,905 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2101HIFCGP 2019 2301HIFOST 2023 2401HIFOST 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximate $46,888 in monthly benefit payments, out of a population of approximately 452 case files which approximated $3.90 million in total annual benefit payments, for testing and noted exceptions in 23 case files as follows: • Four case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Three case files where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • Thirteen case files where the state, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Six case files where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the child’s IV E eligibility was not determined before implementing the foster care maintenance payments program provisions of the Title IV E plan. A similar finding was reported in the prior year as Finding No. 2023 010. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home to reunify the child and family, before the child is determined to be eligible under Title IV E. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 008: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 10,905 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.658 and COVID 19 – 93.658 – Foster Care – Title IV E Award Number and Award Year: 2101HIFCGP 2019 2301HIFOST 2023 2401HIFOST 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximate $46,888 in monthly benefit payments, out of a population of approximately 452 case files which approximated $3.90 million in total annual benefit payments, for testing and noted exceptions in 23 case files as follows: • Four case files where the Police Protective Custody form or Voluntary Foster Custody Agreement was missing and therefore did not support whether the child was removed as part of a voluntary placement agreement or judicial determination. • Three case files where the Certificate of Approval was missing and therefore did not support whether the prospective foster parents were licensed. • Thirteen case files where the state, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Six case files where the “difficulty of care” determination was missing and therefore did not support the assistance amount paid. • One case file where the Judicial Determination was missing and therefore did not support the removal of the child was contrary to the welfare of the child, if DHS made reasonable efforts to prevent removal and finalize the permanency plan, and if the determination was within 60 days from removal. • One case file where the child’s IV E eligibility was not determined before implementing the foster care maintenance payments program provisions of the Title IV E plan. A similar finding was reported in the prior year as Finding No. 2023 010. Criteria Pursuant to 42 USC 672(a)(2), the State must determine whether the removal and foster care placement of a child was in accordance with a voluntary placement agreement or judicial determination. Pursuant to 42 USC 675(4)(A), the foster care maintenance payments should cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, and a child’s personal incidentals. Pursuant to 42 USC 672(c)(1)(A), a foster family home means the home of an individual family that is licensed or approved by the State in which it is situated as a foster family home that meets the standards established for the licensing or approval. Pursuant to 42 USC 671(a)(20)(A), any prospective foster parent must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases, before the foster parent may be finally approved for placement of a child. Pursuant to 45 CFR 1356.21(b), a Judicial Determination must determine reasonable efforts to prevent a child’s removal from the home, reasonable efforts to finalize a permanency plan, and circumstances in which reasonable efforts are not required to prevent a child’s removal from home to reunify the child and family, before the child is determined to be eligible under Title IV E. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 006: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 18,613 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2301HIADPT 2023 2401HIADPT 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximates $54,700 in monthly benefit payments, out of a population of approximately 1,359 case files which approximate $12.2 million in total annual benefit payments, for testing and noted exceptions in 33 case files as follows: • Thirteen case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • One case in which the payment was improperly loaded in the system causing a difference between the agreement amount and paid amount. • Six case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Thirteen case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Seven case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • Three case files where the documentation regarding the continuation of the monthly subsidy payments after the child’s 18th birthday was missing. A similar finding was reported in the prior year as Finding No. 2023 008. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contain the information concerning the nature of services. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 006: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 18,613 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.659 and COVID 19 – 93.659 – Adoption Assistance Award Number and Award Year: 2301HIADPT 2023 2401HIADPT 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximates $54,700 in monthly benefit payments, out of a population of approximately 1,359 case files which approximate $12.2 million in total annual benefit payments, for testing and noted exceptions in 33 case files as follows: • Thirteen case files where the initial or modified adoption agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • One case in which the payment was improperly loaded in the system causing a difference between the agreement amount and paid amount. • Six case files where the “difficulty of care” determination was missing and therefore did not have any support for the assistance amount paid. • Thirteen case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing. • Seven case files where the supporting documentation regarding whether the State determined that the child cannot or should not be returned to the home of his or her parents was missing. • Three case files where the documentation regarding the continuation of the monthly subsidy payments after the child’s 18th birthday was missing. A similar finding was reported in the prior year as Finding No. 2023 008. Criteria Pursuant to 42 USC 673(a)(3), the amount of the adoption assistance payments to be made shall be determined through agreement between the adoptive parents and the State or local agency administering the program, which shall take into consideration the circumstances of the adopting parents and the needs of the child being adopted, and may be readjusted periodically, with the concurrence of the adopting parents (which may be specified in the adoption assistance agreement), depending upon changes in such circumstances. Pursuant to 42 USC 675(3), the agreement for the adoption subsidy must be signed before the final decree of adoption and contain the information concerning the nature of services. Pursuant to 42 USC 671(a)(20)(A), the State must have procedures for criminal records checks, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(f)(3)(A)), for any prospective adoptive parent before the adoptive parent may be finally approved for placement of a child. Pursuant to 42 USC 673(c)(1), the State must determine whether the child cannot or should not be returned to the home of his or her parents. Pursuant to 42 USC 673(a)(4)(A), assistance payments must stop for a child who has attained 18 years of age or greater or 21 years of age if the State determines that the child has a mental or physical handicap. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place regarding the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 007: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,043 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2301HIGARD 2023 2401HIGARD 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $46,100 in monthly benefit payments, out of a population of approximately 363 case files which approximated $3.0 million in total annual benefit payments, for testing and noted exceptions in 19 case files as follows: • Eight case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Six case files where the “difficulty of care” determination was missing or did not match the amount paid and therefore did not have any support for the assistance amount paid. • Five case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing in the case files. A similar finding was reported in the prior year as Finding No. 2023 009. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 671(a)(20)(C), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent instances of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 007: Eligibility, Activities Allowed or Unallowed, Allowable Cost (Material Weakness) Questioned cost: $ 9,043 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.090 and COVID 19 – 93.090 – Guardianship Assistance Award Number and Award Year: 2301HIGARD 2023 2401HIGARD 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files which approximated $46,100 in monthly benefit payments, out of a population of approximately 363 case files which approximated $3.0 million in total annual benefit payments, for testing and noted exceptions in 19 case files as follows: • Eight case files where the initial or modified guardianship/permanency assistance agreement was missing and therefore did not have any support for the amount of monthly assistance paid. • Six case files where the “difficulty of care” determination was missing or did not match the amount paid and therefore did not have any support for the assistance amount paid. • Five case files where the State, Federal Bureau of Investigation, and/or child abuse and neglect clearances were missing in the case files. A similar finding was reported in the prior year as Finding No. 2023 009. Criteria Pursuant to 42 USC 673(d)(1), an executed kinship guardianship assistance agreement with the prospective relative guardian must include the amount of and any adjustments based on the needs of the child. The “Guardianship/ Permanency Assistance Agreement” (“Agreement”) is the agreement executed with the relative guardian. The Agreement outlines the terms and conditions for the participants and the Department and includes the total amount of assistance payments. The Agreement may be further supplemented due to difficulties in caring for a child as determined by a caseworker on an as needed basis and documented on the “Difficulty of Care” (“DOC”) worksheet. In the event of an increase or decrease to the amount of the assistance payments, the caseworkers are required to execute a revised Agreement. Pursuant to 42 USC 671(a)(20)(C), any relative guardian must satisfactorily have met a criminal records check, including a fingerprint-based check of national crime information databases (as defined in 28 USC 534(e)(3)(A)), and for checks described in 42 USC 671(a)(20)(B) on any relative guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child. Effect Failure to follow the established policies and procedures in place over the application process and determination of assistance amount, represent instances of noncompliance with the requirements specified above, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has established policies and procedures in place over the application process and determination of assistance amount, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements including those specified under the Criteria section above. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 010: Eligibility (Material Weakness) Questioned cost: $ 1,787 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – Temporary Assistance for Needy Families (“TANF”) Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participant files, representing approximately $35,500 of monthly benefit payments, out of a population of approximately 3,700 cases, representing approximately $40.1 million of benefit payments, for testing and noted exceptions in four case files as follows: • One case file where the benefit payment was incorrectly calculated. • Three case files where the interview process was not conducted within the forty-five (45) day timeframe required by the State Plan. A similar finding was reported in the prior year as Finding No. 2023 016. Criteria The State of Hawaii TANF State Plan states that a review of all eligibility requirements is required every 12 months for all TANF households. The State Plan also states that for the Department to make a decision regarding an applicant’s eligibility, an interview must be conducted with the applicant no later than forty-five (45) days after the application is received. Effect Failure to follow the established procedures in place over the eligibility determination process resulted in non-compliance with the requirement and questioned costs. Cause and View of Responsible Officials The Department has a history of backlogged cases, which does not allow them to work on current issues when they arise. Recommendation We recommend that the Department work with Administration for Children and Families to determine what remediation actions, if any, are required.

Finding No. 2024 011: Reporting, Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 714 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 participants for testing out of a population of approximately 3,500 participants whose work participation activity was reported on the ACF 199 and noted exceptions with three participants as follows: • We noted one instance where an eligible work participant was participating, but the Department did not retain a supporting paystub. • We noted one instance where an eligible work participant was participating, but the hours in the eligibility system did not match the supporting paystub. • We noted one instance where a work eligible participant did not comply with their work participation plan, but the Department inaccurately reported the corresponding participant as required to participate and participating but not meeting minimum participation requirements. A similar finding was reported in the prior year as Finding No. 2023 014. Criteria Pursuant to 45 CFR 265.3(b)(1), on a quarterly basis, the Department is required to submit disaggregated information on families receiving TANF benefits, which includes demographic data such as work participation activities. Effect Failure to report accurate work participation information limits the Department’s ability to demonstrate compliance with the requirement and could result in non compliance with the minimum work participation rate requirements. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 012: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 405 Federal Agency: U.S. Department of Health and Human Services AL Number and Title: 93.558 – TANF Award Number and Award Year: 1402HITAN3 2014 – 2023 1402HITANF 2014 – 2023 1601HITAN3 2016 – 2023 1601HITANF 2016 – 2023 1701HITANF 2017 – 2023 1701HITAN3 2017 – 2023 2201HITANF 2022 – 2023 2301HITANF 2023 – 2023 2401HITANF 2023 – 2024 Repeat Finding? Yes Condition We selected a non statistical sample of 60 case files for testing and noted one instance where the Department’s records did not support the use of the income information obtained through the Income Eligibility and Verification System (“IEVS”) to evaluate or re evaluate the benefit calculation. A similar finding was reported in the prior year as Finding No. 2023 011. Criteria Pursuant to 45 CFR 205.55, the Department is required to request through the IEVS system, wage information, unemployment compensation, Social Security Administration, unearned income, and any other income information. Effect Failure to properly use IEVS information to evaluate benefit amounts resulted in potential over payment of benefits. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements. Additionally, we recommend that the Department diligently comply with its policies and procedures.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 013: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ 3,846,999 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 providers for testing out of a population of approximately 1,351 providers. The providers selected for testing represented approximately $135 million of payments out of a total payment population of $258 million. We identified two providers where the DHS Form 1139 did not support revalidation within the most recent five year period. A similar finding was reported in the prior year as Finding No. 2023 007. Criteria Pursuant to 42 CFR 455.414, the State Medicaid Agency must revalidate the enrollment of all providers regardless of provider type at least every five years. Effect Failure to follow the established policies and procedures in place over the provider eligibility determination process represents instances of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the program requirements.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 014: Eligibility (Significant Deficiency) Questioned cost: $ 1,087 Federal Agency: Department of Health and Human Services AL Number and Title: 93.777, 93.778 and COVID-19 – 93.778 – Medicaid Cluster Award Number and Award Year: 2305HIMAP 2023 2405HIMAP 2024 Repeat Finding? No Condition During our audit, we selected a non statistical sample of 60 individuals for testing out of a population of approximately 469,538 enrollments. The enrollments selected for testing represented approximately $280,000 of payments out of a total payment population of $3.4 billion. We identified one enrollment whose benefits were not timely terminated after failing to provide verification to support revalidation. Criteria Title 42 CFR Part 435.912 requires the timely determination of eligibility of individuals who apply for Medicaid benefits within (1) 90 days for applicants who apply for Medicaid on the basis of disability (MAGI-excepted), and (2) 45 days for all other applicants (MAGI). In addition, Title 42 CFR Part 435.916 requires annual re verifications of participant eligibility. Effect Failure to follow the established policies and procedures in place over the Medicaid eligibility determination process represents an instance of noncompliance with the requirements of 2 CFR Part 200, resulting in questioned costs. Cause and View of Responsible Officials Although the Department has policies and procedures in place requiring the maintenance of required documentation, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department implement training and standard operating procedures to ensure eligibility determinations are completed in a timely manner.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 003: Special Tests and Provisions (Significant Deficiency) Questioned cost: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – Supplemental Nutrition and Assistance (“SNAP”) Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of four processing centers out of the Department’s 20 processing centers and noted that supervisor reviews over DHS Form 1494, Form 1495, and/or DHS Form 1050 were not properly performed at two processing centers. A similar finding was reported in the prior year as Finding No. 2023 003. Criteria Pursuant to 7 CFR 274.8(b)(3), the Department is required to ensure there are storage and control measures to control blank unissued electronic benefit transfer (“EBT”) cards. To address this requirement, the Department has adopted a policy that requires (1) monthly or quarterly review of the Department Form 1494, Bulk Inventory Control Log; (2) daily or weekly review of the Department Form 1495, Hawaii EBT Card Daily Control Log; and (3) monthly review of the Department Form 1050, EBT Card Destruction Control Log. Effect Documentation of supervisor approval of the review over the Department Form 1494, Form 1495, and/or DHS Form 1050 was not properly performed at two processing centers, increasing the risk of non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the personnel changes in the past years resulted in inconsistent application and documentation of supervisor reviews. Recommendation We recommend that program management ensure that program personnel are familiar with all grant requirements, including compliance with 2 CFR Part 200. Additionally, we recommend that the Department periodically reviews the policies and procedures with the supervisors.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024 004: Special Tests and Provisions (Material Weakness) Questioned costs: $ - Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 daily reconciliations for testing and noted 11 instances where variances were not investigated and there was no evidence that a review of the daily reconciliation was performed. The Department’s daily reconciliations identified variances totaling approximately $11.1 million. A similar finding was reported in the prior year as Finding No. 2023 004. Criteria Pursuant to 7 CFR 274.4, the Department is required to perform daily reconciliations of all SNAP transactions between the State’s Benefit Account, the U.S. Treasury Department, and all the EBT contractors. Effect Failure to resolve the reconciling items resulted in non compliance with the requirement. Cause and View of Responsible Officials Although the Department has policies and procedures in place regarding reviews, the policies and procedures do not explicitly require a supervisor sign off documenting their review, resulting in the inconsistent application and documentation of supervisor reviews. Recommendation We recommend that the Department develop procedures to ensure that identified variances are resolved and that the reconciliation is reviewed in a timely manner.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024-005: Special Tests and Provisions (Material Weakness) Questioned cost: $ 4,367 Federal Agency: U.S. Department of Agriculture AL Number and Title: 10.551, 10.561 and COVID 19 – 10.561 – SNAP Cluster Award Number and Award Year: 7HI400HI4 2022 – 2024 7HI430HI4 2022 – 2024 7HI430HI5 2021 – 2024 7HIHI7F1003 2022 – 2023 Repeat Finding? Yes Condition During our audit, we selected a non statistical sample of 60 participant files which approximated $37,000 in monthly payments, out of a population of approximately 170,500 participant files which approximated $758 million in total annual benefit payments, for testing and noted exceptions in 12 case files as follows: • Three case files where manually entered income and deduction amounts did not agree with the documentation retained in the participant’s case file. • Five case files where manually entered deduction amounts did not agree with the documentation retained in the participant’s case file. • Four case files where manually entered income information did not agree with the documentation retained in the respective participant’s case files. A similar finding was reported in the prior year as Finding No. 2023 005. Criteria Pursuant to 7 CFR 272.10(b)(1)(i), the SNAP system should be efficiently automated to determine eligibility and calculate benefits or validate the eligibility of the worker’s calculations by processing and storing all case file information necessary for the eligibility determination and benefit computation (including but not limited to all household members’ names, addresses, dates of birth, social security numbers, individual household members’ earned and unearned income by source, deductions, resources, and household size). Effect Participants received more or less than the full amount of benefits they were eligible for, resulting in questioned costs. Cause and View of Responsible Officials There was a lack of diligence in following the Department’s established policies and procedures to ensure compliance with the requirements. Recommendation We recommend the Department emphasize the importance of diligently checking that any information entered manually agrees to the supporting documentation retained in the participant’s file. We also recommend the Department consider implementing a secondary review of participant files where information affecting the calculation of benefits is entered manually.

Finding No. 2024 009: Reporting (Significant Deficiency) $ - Federal Agency: U.S. Department of Education AL Number and Title: 84.126 – Rehabilitation Services – Vocational Rehabilitation Grants to States Award Number and Award Year: H126A220015 2021 – 2024 H126A230015 2022 – 2024 H126A240015 2023 – 2024 Repeat Finding? No Condition We selected a non statistical sample of 60 participant case files, out of a population of 4,419 based on participants from two quarterly reports, for testing and noted the following: • One participant tested had discrepancies between the start date of employment in primary occupation per the case management system and per the supporting documentation. Criteria Pursuant to Rehabilitation Services Administration Policy Directive RSA PD 19 03 and 34 CFR 361.47, State Vocational Rehabilitation agencies are required to maintain supporting documentation (either hard copies or scanned copies) particularly regarding eligibility determinations, development of the individualized plan for employment, services period, and case closure in the service record or case management system. Data reported in the case management system must match the supporting documentation for data elements containing critical information. Effect Without the appropriate documentation to support the key data elements reported, the Department is unable to demonstrate its compliance with the reporting requirements. Cause and View of Responsible Officials Although the Department has policies and procedures in place to ensure that the supporting documents are maintained, there was a lack of diligence in complying with the policies and procedures. Recommendation We recommend the Department be more diligent in following its existing policies and procedures to ensure compliance with the Federal requirements.