Federal Agency: U.S. Department of Agriculture
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP)
Assistance Listing Number: 10.561
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our testing, we noted the following three instances of noncompliance in the sample of forty case files tested:
• One MAXIS case files did not have a renewal application on file.
• One MAXIS case file did not have a signed application on file.
• One MAXIS case file did not have documentation matching the income on file.
In addition, the County does not have a formalized supervisory case file review process in place to ensure accuracy and completeness of inputs into the eligibility determination system, MAXIS.
Questioned costs: None
Context: The State of Minnesota Department of Human Services (DHS) contracts with county social
services departments to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the State maintains the MAXIS and METS systems, which determine eligibility. Participants receive benefit payments from the state. The eligible individuals consist of one population, and a total of 40 enrolled persons were selected from the MAXIS system. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 40 selections, errors were noted in three of the cases (see condition section above for more detail).
Cause: The County relied on DHS case file reviews as a control over accuracy and completeness of eligibility inputs into MAXIS.
Effect: Although not found during our testing, benefits paid for participants in the program by the State of Minnesota may have paid for ineligible participants or paid the incorrect amount.
Recommendation: We recommend the County strengthen internal controls over inputs used to determine eligibility to ensure they are correctly entered and the information required by the contract is retained in the County’s records.
Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Medical Assistance Program
Assistance Listing Number: 93.778
Federal Award Identification Number and Year: 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 - 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our testing, we noted the following instance of noncompliance in the sample of sixty case files tested:
• One MAXIS case file did not have a renewal application on file.
In addition, the County does not have a formalized supervisory case file review process in place to ensure accuracy and completeness of inputs into the two eligibility determination systems, MAXIS and METS.
Questioned costs: None
Context: The State of Minnesota Department of Human Services (DHS) contracts with county social
services departments to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the State maintains the MAXIS and METS systems, which determine eligibility. Participants receive benefit payments from the state. The eligible individuals consist of two populations, and a total of 60 enrolled persons were selected, 49 from the MAXIS system and another 11 from the METS system. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 60 selections, errors were noted in one of the cases (see condition section above for more detail).
Cause: The County relied on reinstatement of program renewal requirements by DHS as a control over eligibility. In 2024, the County designed but did not fully implement a formalized case file review process.
Effect: Although not found during our testing, benefits paid for participants in the program by the State of Minnesota may have paid for ineligible participants or paid the incorrect amount.
Repeat Finding: Yes, 2023-007.
Recommendation: We recommend the County strengthen internal controls over inputs used to determine eligibility to ensure they are correctly entered and the information required by the contract is retained in the County’s records.
Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP)
Assistance Listing Number: 10.561
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our testing, we noted the following three instances of noncompliance in the sample of forty case files tested:
• One MAXIS case files did not have a renewal application on file.
• One MAXIS case file did not have a signed application on file.
• One MAXIS case file did not have documentation matching the income on file.
In addition, the County does not have a formalized supervisory case file review process in place to ensure accuracy and completeness of inputs into the eligibility determination system, MAXIS.
Questioned costs: None
Context: The State of Minnesota Department of Human Services (DHS) contracts with county social
services departments to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the State maintains the MAXIS and METS systems, which determine eligibility. Participants receive benefit payments from the state. The eligible individuals consist of one population, and a total of 40 enrolled persons were selected from the MAXIS system. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 40 selections, errors were noted in three of the cases (see condition section above for more detail).
Cause: The County relied on DHS case file reviews as a control over accuracy and completeness of eligibility inputs into MAXIS.
Effect: Although not found during our testing, benefits paid for participants in the program by the State of Minnesota may have paid for ineligible participants or paid the incorrect amount.
Recommendation: We recommend the County strengthen internal controls over inputs used to determine eligibility to ensure they are correctly entered and the information required by the contract is retained in the County’s records.
Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Medical Assistance Program
Assistance Listing Number: 93.778
Federal Award Identification Number and Year: 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 - 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our testing, we noted the following instance of noncompliance in the sample of sixty case files tested:
• One MAXIS case file did not have a renewal application on file.
In addition, the County does not have a formalized supervisory case file review process in place to ensure accuracy and completeness of inputs into the two eligibility determination systems, MAXIS and METS.
Questioned costs: None
Context: The State of Minnesota Department of Human Services (DHS) contracts with county social
services departments to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the State maintains the MAXIS and METS systems, which determine eligibility. Participants receive benefit payments from the state. The eligible individuals consist of two populations, and a total of 60 enrolled persons were selected, 49 from the MAXIS system and another 11 from the METS system. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 60 selections, errors were noted in one of the cases (see condition section above for more detail).
Cause: The County relied on reinstatement of program renewal requirements by DHS as a control over eligibility. In 2024, the County designed but did not fully implement a formalized case file review process.
Effect: Although not found during our testing, benefits paid for participants in the program by the State of Minnesota may have paid for ineligible participants or paid the incorrect amount.
Repeat Finding: Yes, 2023-007.
Recommendation: We recommend the County strengthen internal controls over inputs used to determine eligibility to ensure they are correctly entered and the information required by the contract is retained in the County’s records.
Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.
Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services
Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF)
Assistance Listing Number: 10.561; 93.778; 93.558
Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024
Pass-Through Agency: Minnesota Department of Human Services
Award Period: January 1, 2024 – December 31, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter
Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
(ii) Be incorporated into the official records of the non-Federal entity;
(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;
(v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and
(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.
(viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:
(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;
(B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and
(C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.
Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter.
Questioned costs: None
Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters.
Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota.
Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.