Audit 388059

U.S. Department of Health and Human Services Pass-through Entity: North Carolina Department of Health and Human Services Program Name: Medical Assistance Federal Assistance Listing Number: 93.778 Material Weakness and Nonmaterial Noncompliance – Eligibility Finding 2025-001 Criteria or Specific Requirement: Per Section 200.303 of the Uniform Grant Guidance, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The County should have adequate documentation for each participant that supports each eligibility determination and the information entered into NCFAST. We noted several errors related to the following compliance criteria: a) Self-income conversion and calculation should be completed in accordance with policy manual and income calculated should agree to self-employment records or tax return and to the amount entered in NCFAST. b) The self-attestation wages should be compared to the information in NCFAST. c) The Caseworker should prepare and submit a DMA-5097 form in the case of incompatible income verification and self-attestation income as described in the Eligibility Review Document. d) For countable earned and unearned income, the income conversion and computation should be completed in accordance with policy manuals, and amounts should agree to NCFAST. e) Forced eligibility cases should maintain the proper documentation within NCFAST to support the determination for the required forced eligibility. Condition: There were 15 instances out of 60 program participants tested for control testing where the County did not remediate the errors identified within their internal review timely. The following are the results of nonmaterial noncompliance noted for each criteria listed above out of the 60 program participants selected for compliance testing: a) There was one instance where self-income calculation did not agree to self-employment records or amount entered into NCFAST. b) There were two instances where self-attestation of wages did not agree to wages entered into NCFAST. c) There was one instance where income was incompatible between the income verification and self-attestation income but no DMA-5097 was sent. d) There was one instance where countable earned income was not properly included in NCFAST. e) There were two instances where the support for forced eligibility was not properly maintained in NCFAST. Context: There were 3 out of 60 unique participants tested with the errors noted in the compliance testing. Questioned Costs: We noted no federal questioned costs for the County as the State of North Carolina makes all benefit payments to participants directly. Due to split eligibility determinations between the Counties and the State of North Carolina for Medicaid, we found $18,734 in benefit payments made by the State of North Carolina to ineligible participants based on an improper eligibility determinations at the County related to three individuals in condition above. Cause: County oversight was inadequate during application reviews. Effect: By not having the required documentation in the files or information being incorrectly documented, eligibility cannot be readily substantiated and there is a risk the County could provide funding to individuals who are not eligible. Recommendation: Although these issues will occur from time to time considering the volume of case files, the County should review their processes to ensure proper supporting documentation of eligibility is maintained within each case file. Additionally, the County should monitor compliance with policies requiring timely correction of identified documentation issues. Views of Responsible Officials: Management agrees with the finding and is implementing procedures to correct this which is further discussed in the Corrective Action Plan. Corrective Action Plan: See Corrective Action Plan prepared by the County.