2024-002 Eligibility – METS Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ Social Security number and citizenship verification, as well as requirements of agencies to process applications within 45 days for most applicants, up to 60 days for certain applicants. Minnesota Statutes, Section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, METS, which is used by Watonwan County to support the eligibility determination process. In the case files tested for eligibility, not all documentation to support participant eligibility was updated or input correctly. The following exceptions were noted in the sample of 40 case files tested: • One participant’s Social Security number was entered incorrectly and not verified, and citizenship status was not verified. • One participant’s application was processed 199 days after receipt. Questioned Costs: Not applicable. Watonwan County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Watonwan County split the eligibility determination process. Generally, Watonwan County resolves eligibility issues when prompted by the system, while the State performs the initial review of the case files, including determining the information in METS is verified. Participants receive benefits from the State. The population consisted of 3,336 active METS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The improper input or updating of information in METS and lack of verification of key eligibility-determining factors increase the risk that program participants will receive benefits when they are not eligible. Delays in processing applications increase the risk that program benefits will not be provided to those eligible to receive them. Cause: Program personnel indicated one of the case files was transferred from another county and the supporting documentation was not included in the information provided, and one case file was overlooked by the program personnel responsible for processing the information. Recommendation: We recommend Watonwan County implement additional procedures to provide reasonable assurance that all documentation needed to resolve eligibility issues exists and program personnel properly process applications as well as input, update, or verify the documentation in METS. In addition, Watonwan County should consider providing further training to program personnel. View of Responsible Official: Acknowledge
2024-003 Eligibility – MAXIS Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ citizenship and asset verification. Minnesota Statutes, Section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Watonwan County to support the eligibility determination process. In the case files tested for eligibility, not all documentation to support participant eligibility was updated or input correctly. In a sample of 40 case files tested, two participants’ citizenship was not verified and one participants’ assets were not verified. Questioned Costs: Not applicable. Watonwan County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Watonwan County split the eligibility determination process. Pursuant to Minnesota statutes, Watonwan County performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The population consisted of 572 active MAXIS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of verification in MAXIS of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel responsible for resolving eligibility issues in MAXIS did not ensure all required information was verified. Recommendation: We recommend Watonwan County implement additional procedures to provide reasonable assurance that all documentation needed to support eligibility determinations exists, the program personnel properly input or update the documentation in MAXIS, and the program personnel follow up on issues in a timely manner. In addition, Watonwan County should consider providing further training to program personnel. View of Responsible Official: Acknowledge
2024-004 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For federal awards received from the Minnesota Department of Human Services (DHS), the County should establish and maintain internal control to provide assurance that program reports are completed in accordance with DHS reporting instructions. As part of Watonwan County’s federal award reporting requirements, the County submits the quarterly Local Collaborative Time Study (LCTS) Public Health Cost Schedule (DHS-3220.3) and the Annual Collaborative Report to DHS. Condition: The following exceptions were noted in the tested program reports: • Sampled DHS-3220.3 reports understated the federal funds cost pool by including state grant funds in the reported federal revenue offsets. In total, the two sampled reports understated the federal funds cost pool by $17,494. • The 2024 Annual Collaborative Report was submitted on July 2, 2025, which is after the due date of April 30, 2025. Questioned Costs: None. Context: DHS relies on accurate and timely reporting of program costs and activities to ensure that resulting grant funds paid to the County are for applicable federal program costs and activities as well as to provide detailed information necessary for maintaining proper oversight over federal programs. The population of program reports tested included four quarterly DHS-3220.3 reports; the sample was two quarterly DHS-3220.3 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Inaccurate reports and late submission of reports can impair the DHS’s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County’s controls over preparation of the reports were not sufficient to identify the reporting errors and ensure timely reporting. Recommendation: We recommend Watonwan County implement controls that ensure that all DHS reports are completed accurately and in accordance with DHS instructions. We also recommend the County revise and resubmit any DHS-3220.3 reports permitted with federal revenue offset activity reported incorrectly. View of Responsible Official: Acknowledge