Special Reporting – Federal Funding Accountability and Transparency Act Program Name: School Breakfast Program (Assistance Listing 10.553) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 244CT300N1099, 244CT300N1199, 254CT300N1099, and 254CT300N1199 Program Name: National School Lunch Program (Assistance Listing 10.555) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 244CT300N1099, 244CT300N1199, 254CT300N1099, and 254CT300N1199 Program Name: Special Milk Program for Children (Assistance Listing 10.556) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 244CT300N1099, 244CT300N1199, 254CT300N1099, and 254CT300N1199 Program Name: Summer Food Service Program for Children (Assistance Listing 10.559) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 244CT300N1099, 244CT300N1199, 254CT300N1099, and 254CT300N1199 Program Name: Fresh Fruit and Vegetable Program (Assistance Listing 10.582) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 244CT300L1603 and 254CT300L1603 Criteria Title 2 U.S. Code of Federal Regulations Part 170 Appendix A requires that states report any action that obligates $30,000 or more in federal funds for a subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the following month after making the obligation. As of March 8, 2025, FSRS was retired and all subaward reporting data and functionality are now on the System for Award Management (SAM.gov). Condition The State Department of Education (SDE) did not report its subawards for the Child Nutrition Cluster in FSRS or SAM.gov during the audited period. Context During the fiscal year ended June 30, 2025, SDE provided the following subawards: ALN Program Name Subawards 10.553 School Breakfast Program $50,932,018 10.555 National School Lunch Program $153,719,291 10.556 Special Milk Program for Children $65,417 10.559 Summer Food Service Program for Children $5,215,157 10.582 Fresh Fruit and Vegetable Program $3,379,356 Questioned Costs $0 Effect SDE decreased its public transparency regarding its spending of federal awards. Cause SDE informed us that it is still awaiting guidance from the United States Department of Agriculture on how it should report these awards. Prior Audit Finding We previously reported this as finding 2024-301 and in three prior audits. Recommendation The State Department of Education should continue to pursue guidance from the U.S. Department of Agriculture to ensure it complies with the Federal Funding Accountability and Transparency Act reporting requirements. Views of Responsible Officials “We agree with this finding. Following guidance from the U.S. Department of Agriculture, we have taken corrective actions to achieve compliance. Federal Funding Accountability and Transparency Act (FFATA) reporting has been completed for awards issued during fiscal years 2024 and 2025, with the exception of three entities that are currently experiencing delays in obtaining their respective Unique Entity Identifiers. FFATA reporting for fiscal year 2026 is currently underway, and reporting for fiscal years 2021, 2022, and 2023 will be completed as soon as all required data elements are obtained. We anticipate being fully compliant with past reporting by June 30, 2026.”
Eligibility Program Name: Summer Electronic Benefits Transfer Program for Children (Summer EBT) (Assistance Listing 10.646) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 244CT833N1175 Background The Department of Social Services (DSS) is the lead agency that administers the Summer EBT program and partners with the State Department of Education (SDE) to facilitate the program. DSS relies on the Integrated Management of Public Assistance for Connecticut (ImpaCT) system, the Connecticut Health Insurance Exchange (HIX) system, and third-party contractors when determining client eligibility. Additionally, SDE provides eligible client listings to DSS. DSS issues Summer EBT benefits to clients in multiple iterations. The department’s business systems and quality management divisions, and third-party contractors review the iterations. Each iteration requires a database change request prior to running the iteration. If the business systems division determines that it needs to make a change to the database change request, it will provide a formal approval. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Title 7 CFR Part 292.16(a)(5)(i) requires the state Summer EBT agency to establish a master issuance file which contains all information needed to identify eligible children, issue Summer EBT benefits, record the participation activity for each household, and supply all information necessary to fulfill reporting requirements. Condition Our inquiry about the Summer EBT client eligibility population disclosed that DSS did not track which agency was responsible for each client’s eligibility determination. The DSS business systems division did not approve four out of seven benefit iterations, totaling $993,840, and did not maintain sufficient documentation to support that it did not need to make a change to the database change request. Context DSS issued Summer EBT benefits in seven iterations totaling $30,362,441 during the fiscal year ended June 30, 2025. Questioned Costs $0 Effect DSS has reduced assurance over the accuracy and reliability of client eligibility determinations and oversight of Summer EBT benefit iterations. Cause The department’s current methods of combining multiple sets of Summer EBT issuance data files lacked sufficient controls to determine the source of client eligibility. The business systems division relied on quality management’s approval and did not maintain documentation to confirm that it made no changes to some database change requests. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to identify the agency responsible for each client’s eligibility determination and document benefit iteration approvals for the Summer Electronic Benefits Transfer Program for Children. Views of Responsible Officials “The Department disagrees with this finding. Condition #1: Eligibility for the Summer EBT program is established through multiple pathways: receipt of Supplemental Nutrition Assistance Program (SNAP) benefits, Temporary Family Assistance (TFA), or HUSKY A coverage, and through applying for and receiving an eligibility determination for either the National School Lunch Program or the Summer EBT program itself. Determining eligibility is a shared responsibility between DSS and the State Department of Education (SDE), and children qualify through multiple pathways simultaneously. DSS maintains a record within its eligibility system and compiles reports of all eligible children. When eligibility is established through any additional means, the child’s record is then analyzed against all previous issuances to ensure duplicate participation and double issuance does not occur. Title 7 CFR Part 292.16 (a)(5)(i) requires the Summer EBT agency to establish a master issuance file which contains all information needed to identify eligible children, issue Summer EBT benefits, record the participation activity for each household and supply all information necessary to fulfill reporting requirements. The agency is not required to specify which program(s) were used to determine eligibility, which is reasonable given that there may be multiple overlapping avenues of eligibility. The implication that DSS is somehow not compliant or able to identify the source of eligibility is inaccurate. DSS can identify this information on an individual basis through reviewing the child’s receipt of SNAP, TFA, HUSKY A, or through its ongoing coordination and communication with SDE. Condition #2: It is not a requirement of the business systems division to request approval for each issuance. Each year the Department issues benefits for this program in a consistent manner. Since there were no changes to the process during the audit period, approval was not sought for the issuances. Business systems would only seek approval if there was a change to the process.” Auditors’ Concluding Comments Eligibility data at the summary and individual levels are both critical for an effective and efficient review of the program. The department could not provide documentation to substantiate that it used existing database change request scripts and approval by the business systems division was not necessary.
Special Tests and Provisions – EBT Card Security Program Name: Summer Electronic Benefits Transfer Program for Children (Summer EBT) (Assistance Listing 10.646) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 244CT833N1175 Background The Department of Social Services (DSS) provides Summer Electronic Benefits Transfer (EBT) benefits through EBT cards. The department’s financial services division tracks the status of returned EBT cards. The department’s mailroom staff are responsible for EBT card destruction. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 7 CFR Part 292.16(h)(3)(i) requires the state Summer EBT agency to provide adequate security for EBT cards including secure storage, inventory control records, and periodic review and validation of inventory control records. Title 7 CFR Part 292.15(h)(1)(i) requires Summer EBT agencies to expunge Summer EBT benefits 122 calendar days after issuance. Condition Our review of the status of returned Summer EBT cards disclosed that DSS destroyed returned EBT cards and did not maintain a log to record client information, disposition date, and reason for destruction. Context DSS issued $7,243,933 in Summer EBT refunds during fiscal year 2025. The refund amount included lost, stolen, or damaged EBT cards as well as expunged benefits. DSS destroyed seven 500-card tubes of returned EBT cards. Questioned Costs We were unable to determine if there were questioned costs as DSS did not maintain disposition records for the returned EBT cards. Effect DSS has reduced assurance over the security and accountability of returned EBT cards. Cause DSS informed us that it did not maintain a log due to the large volume of returned EBT cards. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to ensure that it consistently secures, tracks, and records returned cards for the Summer EBT program. Views of Responsible Officials “The Department agrees with this finding. However, the Department believes that there are proper internal controls to ensure the security of returned cards. There was no log maintained by the Department but the controls in place reduced the risk of benefits being used incorrectly to an acceptable level. The returned cards were destroyed, and all unused benefits were expunged.” Auditors’ Concluding Comments DSS did not implement sufficient internal controls for the Summer EBT card program compared to the department's other federal EBT card programs. DSS was unable to provide documentation to support which EBT cards it destroyed and that it expunged benefits on all cards prior to destruction.
Eligibility Program Name: Continuum of Care Program (Assistance Listing 14.267) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: Various Background The Department of Mental Health and Addiction Services (DMHAS) utilizes private nonprofit providers and state operated local mental health authorities to provide its Continuum of Care (CoC) program services. Title 24 U.S. Code of Federal Regulations (CFR) Part 578.3 defines these CoC entities as the group organized to carry out the program’s responsibilities. It is composed of representatives of organizations, including nonprofit providers and mental health agencies, that serve homeless and formerly homeless persons and veterans to the extent these groups are represented within the geographic area and are available to participate. The program typically serves the chronically homeless, which the regulations define as homeless individuals with disabilities. However, in certain instances, disabled clients who are homeless, but not chronically homeless as defined in federal regulations, may enter the program if there are no other interested individuals who meet the eligibility criteria. DMHAS requires the entities to submit a Coordinated Access Network (CAN) Referral Form, which provides attestation the client entering the program was appropriate and there were no other interested clients higher on the priority list.Criteria Title 24 CFR Part 578.103(a) provides that the recipient must establish and maintain sufficient records to enable the United States Department of Housing and Urban Development to determine whether the recipient is meeting recordkeeping requirements. It also provides that recipients must maintain acceptable evidence of the participants’ homelessness status as defined in Title 24 CFR Part 576.500(b), which requires that the recipient must maintain and follow written intake procedures to ensure compliance with the homeless definition in Title 24 CFR Part 576.2. Title 24 CFR Part 578.77(c) provides that each program participant on whose behalf rental assistance payments are made must pay a contribution toward rent in accordance with Section 3(a)(1) of the U.S. Housing Act of 1937. The program participant’s income must be calculated in accordance with 24 CFR Parts 5.609 and 5.611(a). Recipients must initially examine a program participant’s income to determine their contribution toward the rental payment. They must annually reexamine the participants’ income in subsequent years. Condition Our review of eligibility for 40 clients receiving CoC rental assistance disclosed the following: • DMHAS did not properly and adequately document eligibility for two clients. DMHAS did not have sufficient documentation on file to support the clients’ reported homelessness history on the Homelessness Verification Form. • DMHAS overstated the housing assistance payments for three clients by $657 for the benefit months tested. Further review noted an additional $2,627 in overpayments during the audited period. Context During the fiscal year ended June 30, 2025, DMHAS processed 18,451 rental assistance payments totaling $24,992,830. We reviewed 40 rental assistance payments, totaling $194,548. We randomly selected 38 payments for clients that enrolled in the program during the state fiscal year 2025. We also randomly selected two clients that enrolled in the program during the state fiscal year 2024, but their payments did not start until state fiscal year 2025. The sample was not statistically valid. Questioned Costs We identified $1,850 in questioned costs for grant award CT0285L1E032308, $853 in questioned costs for grant award CT0172L1E052311, and $581 in questioned costs for grant award CT0054L1E052316. Effect The department may be providing housing assistance to ineligible clients. Program participants may not be contributing the required amounts toward their rental assistance payments.Cause DMHAS did not ensure its providers adequately documented client eligibility. Rental payments were inaccurate due to clerical or preparer errors where all applicable income was not included in the rent calculations and a lack of supervisory oversight.Prior Audit Finding We previously reported this as finding 2024-800 and in seven prior audits. Recommendation The Department of Mental Health and Addiction Services should strengthen internal controls to ensure providers maintain sufficient documentation to support participant eligibility and accurately calculate client income and rental assistance payments in the Continuum of Care Program.Views of Responsible Officials “We agree with this finding. In 2026, DMHAS will continue to conduct trainings on CoC Fiscal Requirements. As in the past, these trainings will be recorded and available for viewing on the Connecticut Balance of State Continuum of Care (CTBOS) website. DMHAS Housing and Homeless Services Unit staff conduct mandatory in-person and virtual Technical Assistance visits for the funded agencies to provide guidance and training on the United States Department of Housing and Urban Development (HUD) required eligibility regulations Income Calculation and Documentation. On November 1, 2023, DMHAS implemented a Microsoft Excel Workbook that is fully inclusive of the DMHAS required paperwork, including the income calculation, lease, contract, as well as initial and recertification which standardizes the documents for each participant. On December 19, 2025, the workbook was updated to enhance internal controls over the use of Rent Reasonableness forms and calculations of client income and rental assistance payments. The DMHAS Housing and Homeless Services Unit will continue to work with the DMHAS Fiscal Services Bureau to ensure payments are made accurately, correctly and on-time.”
Special Tests and Provisions – Rent Reasonableness Program Name: Continuum of Care Program (Assistance Listing 14.267) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: Various Background The Department of Mental Health and Addiction Services (DMHAS) utilizes private nonprofit providers and state operated local mental health authorities to provide its Continuum of Care (CoC) program services. Housing providers at these entities are responsible for determining the reasonableness of rental rates. Title 24 U.S. Code of Federal Regulations (CFR) Part 578.3 defines these CoC entities as the group organized to carry out the program’s responsibilities. It is composed of representatives of organizations, including nonprofit providers and mental health agencies, that serve homeless and formerly homeless persons and veterans to the extent these groups are represented within the geographic area and are available to participate. Criteria Title 24 U.S. Code of Federal Regulations Part 578.51(g) provides that the United States Department of Housing and Urban Development (HUD) will only provide rental assistance for a unit if the rent is reasonable. The recipient or subrecipient must determine whether the rent charged for the unit receiving rental assistance is reasonable in relation to rents charged for comparable unassisted units, considering the location, size, type, quality, amenities, facilities, and management and maintenance of each unit. Reasonable rent must not exceed the rent the same owner currently charges for comparable unassisted units. The HUD Exchange provides that recipients and subrecipients must establish their own written procedures for documenting comparable rents to establish transparency and consistency across all projects. In addition, recipients and subrecipients should have a procedure in place to ensure it documents compliance with rent reasonableness standards prior to executing the lease for an assisted unit. Recipients and subrecipients can check comparable rents by using a market study of rents charged for units of different sizes in different locations or by reviewing advertisements for comparable rental units. Providers must maintain documentation on file (e.g., unit rent/description, evidence the units share the same features, etc.). Condition Our review of reasonable rent certifications for ten rental assistance payments disclosed the following: • In two cases, DMHAS’ providers did not maintain sufficient documentation to support the reasonableness of rents paid. The providers did not preserve dated market studies, printouts of three comparable rents, and the units’ descriptions and features. • In two cases, DMHAS’ providers did not complete the clients’ rent reasonableness checklist and certification worksheets until 14 and 16 days after the move-in date. • In one case, DMHAS’ provider did not sign or date the client’s rent reasonableness checklist and certification worksheet. Context During the fiscal year ended June 30, 2025, DMHAS processed 18,451 rental assistance payments totaling $24,992,830. Of these payments, the department made 1,114 rental payments totaling $1,530,492 on behalf of 150 clients that enrolled in the program during the fiscal year ended June 30, 2025. We randomly selected ten clients from our eligibility testing who enrolled in the program during the fiscal year ended June 30, 2025. We randomly selected these clients from three of five providers. We selected three or four clients from each provider. The department paid $11,736 in rental assistance payments for these clients during the audited period. The sample was not statistically valid. Questioned Costs $0 Effect The department may be overpaying rental subsidies. Cause DMHAS did not ensure its providers maintained documentation to support rental rates or promptly approved rent reasonableness checklists and certification worksheets. Prior Audit Finding We previously reported this as finding 2024-801. Recommendation The Department of Mental Health and Addiction Services should strengthen internal controls to ensure providers maintain sufficient and current documentation to support the reasonableness of rent for the Continuum of Care Program. Views of Responsible Officials “We agree with this finding. DMHAS Housing and Homeless Services Unit verbally instructed providers that they must complete, prior to client move-in, accurately, sign and retain documentation regarding the comparable units when completing the Rent Reasonableness on December 17, 2024. On December 24, 2024 and December 19, 2025, these instructions were sent to the providers via email. On February 4, 2025 DMHAS updated the CoC Operations Guide with the full instructions for completing the Rent Reasonableness and the retention of supporting documentation. DMHAS will continue to randomly review a sample of Rent Reasonable documents throughout the year and will provide training and technical assistance to providers on the completion and retention of Rent Reasonableness documentation.”
Reporting – Financial Assessment Subsystem for Public Housing Program Name: Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 VO Program Name: Mainstream Vouchers (Assistance Listing 14.879) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 DVO Background The United States Department of Housing and Urban Development’s (HUD) Section 8 Housing Choice Vouchers Program provides rental assistance to help very low-income families afford decent, safe, and sanitary rental housing. The Mainstream Vouchers Program enables families to lease affordable private housing when the head, spouse, or co-head is a person with disabilities. Public housing agencies (PHA) are authorized to administer the programs locally and make housing assistance payments on behalf of eligible families directly to landlords for the lease of suitable program-eligible rental housing. In Connecticut, the programs are administered locally by over 40 public housing agencies and statewide by the Department of Housing (DOH) and its contracted vendor. DOH advances program funds to its contractor that disburses the funds to landlords and participants. Criteria Title 24 U.S. Code of Federal Regulations Part 5.801 requires PHAs to submit financial information (prepared in accordance with Generally Accepted Accounting Principles) annually. Unaudited financial statements are required 60 days after the PHA’s fiscal year end, and audited financial statements are then required no later than nine months after the PHA’s fiscal year end. The PHA should submit financial information through the HUD Financial Assessment Subsystem for Public Housing (FASS-PH). Condition Our review disclosed that DOH did not submit required financial information for the fiscal years ended June 30, 2020, 2021, 2022, 2023, and 2024. Context The department is unable to submit subsequent reports until HUD approves the prior year’s submission. In August 2025, DOH submitted audited information for the fiscal year ended June 30, 2019. Questioned Costs $0 Effect HUD uses financial information submitted through the FASS-PH to monitor and oversee the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs. Without the timely submission of information, HUD may not have the data necessary to make informed decisions about the programs. Cause The department has not devoted the resources necessary to complete the federal financial reports. Prior Audit Finding We previously reported this as finding 2024-729 and in eight prior audits. Recommendation The Department of Housing should promptly submit required financial information to the Department of Housing and Urban Development in accordance with Title 24 U.S. Code of Federal Regulations Part 5.801. Views of Responsible Officials “We agree with the finding. The Department of Housing (DOH) submitted its 2019 audit in August 2025 and is currently awaiting the Auditor’s approval. With the new stablished Section-8 Division, the additional support has made a great impact, and it has helped expedite this work. However, the process is time consuming because we cannot submit audits for subsequent years until the prior year’s audit is approved. Once the 2019 audit is approved, we will begin work on the 2020 audit and continue sequentially until we are fully up to date. Our goal is to be fully caught up by December 31, 2027. “
Subrecipient Monitoring Program Name: Crime Victim Assistance (Assistance Listing 16.575) Federal Award Agency: Department of Justice Award Years: Federal Fiscal Years 2021, 2022, and 2023 Federal Award Numbers: 15POVC-21-GG-00615-ASSI, 15POVC-22-GG-00715-ASSI, and 15 POVC-23-GG-00433-ASSI Background The Crime Victim Assistance program provides financial support and various services and resources to crime victims, including crisis counseling, criminal justice support and advocacy, shelter, and therapy. The Judicial Branch provides grants to subrecipients to provide these services. Title 28 U.S Code of Federal Regulations (CFR) Part 94.118 provides that subrecipients shall contribute not less than 20% of the total cost of each project. Subrecipients shall derive these contributions from non-federal sources. Each subrecipient shall maintain records that clearly show the source and amount of the matching contributions.Criteria Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 CFR Part 200.332(e) provides that the pass-through entity shall monitor subrecipient activities as necessary to ensure that they comply with federal statutes, regulations, and the terms and conditions of the subaward. Title 28 CFR Part 94.106 provides that the state administering agency shall conduct regular desk monitoring of all subrecipients as well as on-site monitoring of all subrecipients at least once every two years during the award period. The state shall maintain a copy of site visit results and other documents related to compliance. Title 2 CFR Part 200.306(b) provides that the pass-through entity must accept any cost sharing funds as part of the subrecipient’s contributions to a program when the funds are verifiable in the subrecipient’s records. Condition The Judicial Branch did not perform regular subrecipient desk reviews or site visits at least once every two years during the award period as required by federal regulations. The branch does not complete reviews until the award period ends. As a result, it did not promptly examine subrecipients’ underlying documentation such as invoices, timesheets, or support for expenditures or matching contributions. The branch’s monitoring process was limited to monthly reviews of budget-to-actual summaries. Context During the fiscal year ended June 30, 2025, the branch made $8,759,482 in reimbursements to 40 subrecipients.Questioned Costs $0Effect The Judicial Branch has limited assurance that subrecipients used federal funds for allowable activities and met the mandatory matching requirements. This could potentially lead to future disallowed costs and federal repayment obligations.Cause Due to a lack of adequate staffing, the Judicial Branch prioritized reviewing supporting documentation for prior award periods rather than the current period. Prior Audit Finding We have not previously reported this finding.Recommendation The Judicial Branch should strengthen internal controls to ensure it complies with federal subrecipient monitoring requirements for the Crime Victim Assistance program. Views of Responsible Officials “The Judicial Branch Office of Victim Services (OVS) agrees to strengthen its internal controls as described below to comply with federal subrecipient monitoring requirements for the Victims of Crime Act Assistance (VOCA) Program. In 2025, OVS performed site visits for four VOCA-funded programs and completed financial-desk reviews of monthly or quarterly financial reports for all programs. That year, OVS experienced personnel turnover in its three-employee Fiscal Services Unit, notably the separation from state service of a Program Manager and a Court Planner, who together performed OVS’ programmatic site visits of VOCA-funded programs. Also, there was a significant increase in workload resulting from OVS’ contributions to the 2024-2025 VOCA request-for-proposal process. In response, staff outside the unit contributed while managing other assigned duties, a Program Manager and Grants and Contract Specialist were hired to restore the unit to its three-employee configuration, the new employees received training on subrecipient monitoring policies and procedures, and a revised subrecipient site visit plan was developed and has begun being implemented. To strengthen internal controls, OVS has developed a revised site visit plan for the remaining VOCA-funded programs scheduled to receive site visits in 2025. April 15, 2026, is the anticipated date for OVS to complete the site visits. OVS has completed sending letters to the subrecipients operating the VOCA-funded programs. The letters request supporting documentation, which is programmatic and financial in nature, in accordance with OVS administrative policy and procedure. Also, the letters inform subrecipients that site visits will commence in accordance with a revised site visit plan.”
Allowable Costs/Cost Principles – Consultant Payments Program Name: Federal-State Partnership for Intercity Passenger Rail (Assistance Listing 20.326) Federal Award Agency: Department of Transportation Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 69A36524520310FSPCT Background The Department of Transportation (DOT) Consultant Design Administration Manual defines extra work as work the department orders beyond the scope of the agreement when such work is not reflected in the fee payments specified in the agreement. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.317 requires that when conducting procurement transactions under a federal award, a state must follow the same policies and procedures it uses for procurements with non-federal funds. Title 2 CFR Part 200.403(c) and (g) provides that to be allowable under federal awards, costs must be consistent with established policies and procedures and adequately documented. The DOT Consultant Design Administration Manual requires consultants to obtain written authorization from the department before they begin any extra work; otherwise, DOT is not obligated to compensate the consultant for that work. Condition Our review of 11 transactions totaling $46,543,994 disclosed that DOT made a $47,870 payment for extra work performed by a consultant that it did not authorize before work began. Context During the fiscal year ended June 30, 2025, non-payroll expenditures totaled $105,024,824. We randomly selected ten payments to review, as well as one manual journal adjustment. The sample was not statistically valid. Questioned Costs $47,870 Effect Failure to comply with DOT’s policies regarding extra work performed by consultants may result in unauthorized costs. Cause A lack of management oversight contributed to this condition. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Transportation should strengthen internal controls over consultant payments for extra work. Views of Responsible Officials “We agree with this finding.”
Special Tests and Provisions – Wage Rate Requirements Program Name: Highway Planning and Construction (Assistance Listing 20.205) Federal Award Agency: United States Department of Transportation Award Years: Various Federal Award Numbers: 693JJ22240000RPF4CT0015147, 693JJ22230000Y001CT0015147, 693JJ22230000Y001CT0951384, and 693JJ22430000Y001CT0032217 Background The Davis-Bacon and Related Acts require contractors and subcontractors working on federally funded contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works to pay their laborers and mechanics no less than the locally prevailing wages and fringe benefits for corresponding work. Criteria Title 29 U.S. Code of Federal Regulations Part 5.5(a)(3) requires the contractor or subcontractor to submit weekly certified payrolls and a statement of compliance to the Department of Transportation (DOT) for each week in which it performs any Davis-Bacon and Related Acts covered work. If the contractor or subcontractor fails to submit the required records, DOT may, after written notice to the contractor, suspend any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available, may be grounds for debarment action. The special provisions in every contract contain the requirements and instructions for the submission of certified payrolls and statements of compliance. The prime contractor is responsible for ensuring that all subcontractors furnish the required records for each project. The DOT Construction Manual prescribes that the department shall notify the contractor of deficiencies in a timely manner. First notification may be by telephone, email, or a noncompliance notice allowing the contractor 14 days to correct any deficiencies. If a second notification is required, the district should draft a letter to the contractor, alerting them to the deficiency and providing them with an additional 14 days to respond. The district should send a copy of the letter to the Division of Construction Operation. Condition Our review of 15 randomly selected construction projects totaling $75,757,182 disclosed that three subcontractors failed to submit certified payrolls and statements of compliance for the weeks in which they performed Davis-Bacon and Related Acts covered work. DOT did not promptly take corrective action when the subcontractors failed to submit the required records. Context During the fiscal year ended June 30, 2025, construction contract expenditures totaled $613,627,954. The sample was not statistically valid. Questioned Costs $0 Effect DOT has reduced assurance that contractors and subcontractors complied with prevailing wage laws on federally funded construction projects. Cause A lack of management oversight contributed to this condition. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Transportation should strengthen internal controls to ensure that contractors and subcontractors submit required payroll records when performing Davis-Bacon and Related Acts covered work and should promptly take corrective action when a contractor or subcontractor fails to submit the required records. Views of Responsible Officials “We agree with this finding. The actions identified in the Corrective Action Plan should improve the clarity of procedures to ensure compliance with the submission of payrolls in a timely manner. “
Special Tests and Provisions – National Student Loan Data System Reporting Program Name: Federal Pell Grant Program (Assistance Listing 84.063) Federal Award Agency: United States Department of Education Award Year: Federal Fiscal Year 2025 Federal Award Number: Western Connecticut State University – P063P241214 Program Name: Federal Direct Student Loans (Assistance Listing 84.268) Federal Award Agency: United States Department of Education Award Year: Federal Fiscal Year 2025 Federal Award Number: Western Connecticut State University – P268K251214 Background The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for federal student aid disbursed under Title IV of the Higher Education Act of 1965, as amended. Among other things, NSLDS monitors information for all instructional programs and the enrollment status of Title IV aid recipients. Criteria Title 34 U.S. Code of Federal Regulations (CFR) Parts 685.309(b) and 690.83(b)(2) require institutions to accurately report enrollment information under the Pell Grant and Direct Loan programs via the NSLDS. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS enrollment reporting process. Institutions should report published program length based on the definition of “normal time” to completion per Title 34 CFR Part 668.41(a) as follows: • If the institution has published in its catalog, on its website, or in any promotional materials, the length of the program in weeks, months, or years, the program length reported must be the same as the program length that the school has published. • If the school has not published a program length and the program is other than an associate or bachelor’s degree program, the program length is based on the school’s determination of how long, in weeks, months, or years, the program is designed for a full-time student to complete. Condition We randomly selected ten students who received $34,044 in Pell grants and $64,741 in Direct Loans. Our review disclosed that Western Connecticut State University did not accurately report the enrollment information for one student who received $20,284 in Direct Loans. The university reported the published program length for a master's degree as six years, instead of two years. Further inquiry revealed that the university reported the published program length for all advanced degree programs as six years and did not base them on actual published lengths or intended completion times. Context During the fiscal year ended June 30, 2025, there were 528 students with enrollment status changes who received $1,428,424 in Pell grants and $3,518,924 in Direct Loans for aid year 2024-2025. The sample was not statistically valid. Questioned Costs $0 Effect Failure to accurately report enrollment status changes to the NSLDS could impact student eligibility under the Pell Grant and Direct Loan programs. Cause The condition appears to be due to a lack of management oversight. Prior Audit Finding We previously reported this as finding 2024-656 and in one prior audit. Recommendation Western Connecticut State University should strengthen internal controls to ensure that it submits enrollment status changes to the National Student Loan Data System in accordance with federal regulations. Views of Responsible Officials “We agree with this finding.”
Eligibility Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background Title 45 U.S. Code of Federal Regulations (CFR) Part 260.30 defines commingled state Temporary Assistance for Needy Families (TANF) expenditures as expenditures of state funds made within the TANF program and commingled with federal TANF funds. A state should report an expenditure as commingled when it uses both federal award and maintenance of effort (MOE) funds for the benefit or service. Commingled funding of a benefit or service means that the expenditure is subject to all federal funding restrictions, TANF requirements, and (MOE) limitations, or the most restrictive of these if they conflict. Criteria Title 45 CFR Part 264.1(a)(1) provides that no state may use any of its federal TANF funds to provide assistance to a family that includes an adult head of household who has received federal assistance for a total of 60 cumulative months, whether or not consecutive. Section 8540.12 of the Department of Social Services (DSS) Uniform Policy Manual states that recipients that are not exempt from Temporary Family Assistance (TFA) time limits are subject to the 60-month time limit. Condition Our review of 40 TFA payments totaling $28,263 disclosed that DSS paid $685 in assistance for one month over the 60-month time limit for one non-exempt recipient. Context For the fiscal year ended June 30, 2025, DSS issued 67,383 federal claimable TFA payments totaling $43,574,745. DSS claimed TFA payments as commingled MOE on its federal financial reports. The sample was not statistically valid. Questioned Costs $685 Effect DSS did not comply with all restrictions, requirements, and limitations for TFA payments. A recipient received assistance beyond the program limits. Cause DSS eligibility workers did not create a TFA overpayment, and supervisory reviews did not identify the error. The department’s eligibility system controls did not prevent the payment. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to ensure that only eligible recipients receive temporary family assistance in accordance with federal laws and the Temporary Assistance for Needy Families State Plan. Views of Responsible Officials “The Department agrees with this finding. The error occurred due to a system issue that did not trigger the discontinuance of benefits for a household that had received 60 months of time-limited benefits. The Department will take action to correct the system functionality to ensure incorrect payments are not made to households that have received 60 months of time-limited benefits. An overpayment has been created, and the recovery of the error amount is in process.”
Performance Reporting – ACF-199 TANF Data Report Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background States must complete the ACF-199 TANF Data Report and submit it quarterly to the Department of Health and Human Services (DHHS). The report provides work participation data which serves as the basis for DHHS to determine whether a state met work participation rates. Criteria Title 45 U.S. Code of Federal Regulations (CFR) Part 261.62 requires states to verify the accuracy of work participation data. Title 45 CFR Part 261.65 requires the state to maintain adequate documentation, verification, or internal control procedures to ensure the accuracy of data used in calculating work participation rates. Title 45 CFR Part 265.5 allows states to report data in the ACF-199 on all recipient families or on a sample of families using an acceptable sampling method approved by DHHS. The Department of Social Services (DSS) elected to report on a sample of families. The DSS TANF Work Verification Plan describes the department’s internal controls that ensure consistent measurement of work participation rates. According to the plan, DSS performs data validation and case reviews on each sampled case. Condition Our review of the ACF-199 for the quarters ended December 31, 2024, and June 30, 2025, and ten sampled cases disclosed that DSS did not perform data validation or case reviews for two cases for April 2025. Context DSS submitted four quarterly ACF-199 TANF Data Reports during the fiscal year ended June 30, 2025. DSS submitted data transmission files to DHHS that contained 838 and 793 sampled cases for the quarters ended December 31, 2024, and June 30, 2025, respectively. The sample was not statistically valid. Questioned Costs $0 Effect DHHS may be using inaccurate data for program analysis, penalties, and decisions. Cause DSS staff did not perform the required data validation. Supervisory reviews did not identify the error. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls over performance reporting to ensure it performs data validation and case reviews for all sampled cases for the ACF-199 Temporary Assistance for Needy Families (TANF) Data Report in accordance with federal laws and the TANF Work Verification Plan. Views of Responsible Officials “The Department agrees with this finding and will create a tracking mechanism and a follow-up process to ensure it performs data validation and case reviews for all sampled cases for the ACF-199 TANF Data Report.”
Special Reporting – ACF 204, Annual Report on State Maintenance-of-Effort (MOE) Programs Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Criteria Title 45 U.S. Code of Federal Regulations (CFR) Part 265.9 requires states to file an annual report containing information on its Temporary Assistance for Needy Families (TANF) program and the state's maintenance-of-effort (MOE) programs each fiscal year. TANF Program Instruction No. TANF-ACF-PI-2008-06 requires the total number of families served under the program with MOE funds on Line 8 of the Annual Report on State MOE Programs (Form ACF-204). Condition Our review of Form ACF-204 for federal fiscal year ended September 30, 2024, disclosed that the Department of Social Services (DSS) understated the number of families served under the Safety Net Services (SNS) program with MOE funds by 528 families. DSS incorrectly reported 655 families served on Line 8 of Form ACF-204. Context The department’s records showed that DSS served 1,183 unduplicated families under the Safety Net Services program in federal fiscal year 2024. Total state MOE expenditures under the Safety Net Services program totaled $1,421,943. Questioned Costs $0 Effect Underreporting families served by 45% gives interested parties an inaccurate perception of DSS’ efforts to assist families compared to the funds expended. Cause This condition resulted from a lack of management oversight. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to ensure accurate reporting on TANF Form ACF-204. Views of Responsible Officials “The Department agrees with this finding. The Department will strengthen internal controls to ensure accurate data is reported on the ACF-204. This will be done by adding a second reviewer of documentation received by each of the TANF agencies administering the program to confirm that all numbers entered on the ACF-204 match the numbers reported by the agency administering the program. The manager will also view the source documentation when reviewing the ACF-204 for accuracy before submission.”
Special Reporting – Federal Funding Accountability and Transparency Act Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background The Department of Social Services (DSS) is the designated single state agency to administer Temporary Assistance for Needy Families (TANF) in accordance with Title 45 U.S. Code of Federal Regulations (CFR) Part 205.100. Connecticut administers certain aspects of TANF through several state agencies including the Department of Children and Families (DCF). DSS and DCF have a memorandum of understanding (MOU) which specifies each agency's responsibilities for administering programs in the TANF State Plan. DSS claims the state's use of federal TANF funds for home and community-based services provided to DCF's TANF-eligible clients. DCF enters into agreements with these subrecipients and pays them quarterly advances. DCF's responsibilities in the MOU include complying with the requirements of the Federal Funds Accountability and Transparency Act of 2006 (FFATA) in accordance with the terms found in Title 2 CFR Part 170. DSS is the prime recipient of TANF grants and is responsible for submitting FFATA reports. Criteria Title 2 CFR Part 170 Appendix A requires states to report any action that obligates $30,000 or more in federal funds for a subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the following month after making the obligation. Recipients are to accurately report key data elements such as subaward amounts and obligation dates. As of March 8, 2025, FSRS was retired and all subaward reporting data and functionality are now on the System for Award Management (SAM.gov). Condition Our review of ten DCF TANF subawards, totaling $24,661,170, disclosed that DSS incorrectly entered the amounts for all ten subawards into FSRS/SAM. In addition, DSS reported five subawards 41 days late. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 10 0 5 10 0 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $24,661,170 $0 $23,586,427 $24,661,170 $0 Context During the fiscal year ended June 30, 2025, DCF reported five TANF subaward obligations of $4,298,968 to DSS. DSS submitted 39 TANF subaward obligation corrections to SAM totaling $64,070,222. We reviewed the five subaward obligations made during the fiscal year and the five largest subaward obligation corrections. The sample was not statistically valid. Questioned Costs $0 Effect DSS and DCF decreased public transparency regarding their spending of federal awards. Cause The departments did not have adequate internal controls over subaward reporting. DCF initially provided some incorrect obligation amounts to DSS. DSS relied on these inaccurate amounts. Prior Audit Finding We previously reported this as finding 2024-023 and in two prior audits. Recommendation The Department of Social Services and Department of Children and Families should strengthen internal controls to ensure compliance with the Federal Funding Accountability and Transparency Act reporting requirements. As the lead agency for the Temporary Assistance for Needy Families Program, the Department of Social Services should strengthen procedures to ensure that supporting state agencies fulfill their responsibilities in their memorandum of understanding and comply with all federal TANF requirements. Views of Responsible Officials Response provided by the Department of Children and Families: “DCF agrees with this finding and will continue to work the DSS to strengthen internal controls to ensure compliance with the Federal Funding Accountability and Transparency Act (TANF) reporting requirements.” Response provided by the Department of Social Services: “The Department agrees with this finding and the response provided by the Department of Children and Families. DSS will continue to work with DCF to strengthen internal controls and procedures to ensure compliance in fulfilling the responsibilities of the Federal Funding Accountability and Transparency Act reporting requirements.”
Subrecipient Monitoring Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background The Department of Social Services (DSS) is the designated single state agency to administer Temporary Assistance for Needy Families (TANF) in accordance with Title 45 U.S. Code of Federal Regulations (CFR) Part 205.100. Connecticut administers certain aspects of TANF through several state agencies including the Department of Children and Families (DCF). DSS and DCF have a memorandum of understanding (MOU) which specifies each agency's responsibilities for administering programs in the TANF State Plan. DSS claims the state's use of federal TANF funds for home and community-based services provided to DCF's TANF-eligible clients. DCF enters into agreements with these subrecipients and pays them quarterly advances. DCF makes payments to Youth Service Bureaus claimed under the TANF program. Criteria Title 2 CFR Part 200.332(g) requires the pass-through entity to verify that subrecipients met their audit requirements for the fiscal year. Condition Our review of subrecipient monitoring over ten subrecipients that received $6,672,958 in TANF funds disclosed that DCF did not complete four annual fiscal reviews to ensure that subrecipients met their audit requirements for the fiscal year. Two of the ten subrecipients and two of the four exceptions were Youth Service Bureaus. Further review disclosed that DCF lacked procedures to perform annual reviews for Youth Service Bureau subrecipients. Context During the fiscal year ended June 30, 2025, DSS claimed $52,557,463 in DCF expenditures for various home and community-based services provided to 132 subrecipients, including $3,785,630 in expenditures for 102 Youth Service Bureau subrecipients. The sample was not statistically valid. Questioned Costs $0 Effect DSS and DCF have limited assurance that federal funds were used for allowable activities. Cause DCF experienced staffing limitations and competing priorities. DCF lacked management oversight over Youth Service Bureau subrecipients. Prior Audit Finding We previously reported this as finding 2024-024 and in two prior audits. Recommendation The Department of Children and Families should develop procedures to monitor payments to Youth Service Bureaus and strengthen internal controls to ensure compliance with the federal regulations for monitoring subrecipients of the Temporary Assistance for Needy Families program. As the lead agency for TANF, the Department of Social Services should strengthen procedures to ensure that supporting state agencies fulfill their responsibilities in their memorandum of understanding and comply with all federal TANF requirements. Views of Responsible Officials Response provided by the Department of Children and Families: “DCF agrees with this finding and will improve its internal review process to include Youth Services Bureaus and capture all subrecipients' federal single audits.” Response provided by the Department of Social Services: “The Department agrees with this finding. As the lead agency for TANF, DSS will strengthen procedures by requiring DCF to complete and share activities that verify subrecipients meet their audit requirements each fiscal year. DSS worked with an outside agency to review and enhance its subrecipient monitoring procedures. The outcome of this collaboration included training for DSS staff on subrecipient monitoring requirements, communicating expectations to subrecipients about monitoring expectations, a standardized data request, and the creation of a subrecipient monitoring toolkit to be utilized by DSS and its partners.”
Special Tests and Provisions – Child Support Non-Cooperation Program Name: Temporary Assistance for Needy Families (TANF) (Assistance Listing 93.558) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTTANF and 2501CTTANF Background The Department of Social Services (DSS) Office of Child Support Services utilizes the Connecticut Child Support Enforcement System to issue sanctions to a non-cooperating parent. A child support investigator notifies the Temporary Family Assistance (TFA) Unit of the sanction. A TFA eligibility worker records the sanction and denies TANF benefits in the Integrated Management of Public Assistance for Connecticut (ImpaCT) system. The eligibility worker will reverse the sanction when the Office of Child Support Services notifies the TFA Unit that the parent complied with program requirements. Criteria Title 45 U.S. Code of Federal Regulations Part 264.30 provides that if a state agency administering TANF determines that an individual is not cooperating with child support requirements, the agency must deduct at least 25% of the amount of the assistance or deny the individual assistance. Section 8540.65 of the DSS Uniform Policy Manual specifies that individuals who request assistance must cooperate in securing support from legally liable relatives for all members of the assistance unit unless the assistance unit is exempt or has good cause for not complying with such requirements. If an individual does not cooperate without good cause, the entire assistance unit is ineligible to receive assistance. The TFA Office of Child Support Services Referral Guide states that Office of Child Support Services staff will notify TFA when it sanctions a client for non-cooperation and when it reverses a sanction upon compliance. Office of Child Support Services staff will email the appropriate TFA mailbox with the client’s name, identification number, case number, referral reason, TFA processing deadline, and attach a copy of the IV-A sanction notice. TFA staff will send a copy of the IV-A sanction notice to the DSS contractor for back scanning to ImpaCT upon completion of the sanction request. Condition DSS could not provide an accurate and complete universe of sanction notices for child support noncooperation. Our review of 15 sanction notices disclosed that TFA staff did not send seven notices to the DSS contractor for back scanning to ImpaCT. Context For the fiscal year ended June 30, 2025, TFA processed 16 sanction notices for noncooperation with child support requirements in ImpaCT. However, the Office of Child Support Services universe showed a total of 398 unique sanctions. The Office of Child Support Services could not distinguish between child support noncooperation sanctions and other sanction types without individually researching each case. DSS could not reconcile the differences between the Office of Child Support Services universe of sanctions and the number of sanction notices processed by TFA. We used both reports to select our sample. The sample was not statistically valid. Questioned Costs $0 Effect DSS lacks assurance that staff processed and documented all required sanctions. Clients could receive TANF benefits without complying with program requirements. Cause ImpaCT and the Connecticut Child Support Enforcement System are disparate systems. DSS developed a multi-step manual sanction process between two units without adequate internal controls. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls over sanctions to ensure compliance with Temporary Assistance for Needy Families child support enforcement requirements. Views of Responsible Officials “The Department agrees with the finding. DSS Economic Security and Office of Child Support Services implemented a new child support non-cooperation referral process on November 25, 2025. It is task based, assures an accurate and complete universe of sanction notices for child support non-cooperation are provided, and assures staff process and document all required sanctions.”
Special Reporting – Federal Funding Accountability and Transparency Act Program Name: Low-Income Home Energy Assistance Program (LIHEAP) (Assistance Listing 93.568) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTLIEA, 2401CTLIEI, 2501CTLIEA, and 2501CTLIEI Criteria Title 2 U.S. Code of Federal Regulations Part 170 Appendix A requires that states report any action that obligates $30,000 or more in federal funds for a subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the following month after making the obligation. As of March 8, 2025, FSRS was retired and all subaward reporting data and functionality are now on the System for Award Management (SAM.gov). Condition Our review of nine Low-Income Home Energy Assistance Program (LIHEAP) subawards, totaling $71,001,106, disclosed that the Department of Social Services (DSS) reported nine subawards 15 days late. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 9 0 9 0 0 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $71,001,106 $0 $71,001,106 $0 $0 Context During the fiscal year ended June 30, 2025, DSS obligated nine LIHEAP subawards totaling $71,001,106. Questioned Costs $0 Effect DSS delayed its public transparency of its spending of federal awards. Cause The department did not have adequate internal controls to ensure prompt subaward reporting. Prior Audit Finding We previously reported this as finding 2024-021 and in three prior audits. Recommendation The Department of Social Services should strengthen internal controls regarding prompt subaward reporting to ensure compliance with the Federal Funding Accountability and Transparency Act. Views of Responsible Officials “The Department agrees with this finding. DSS has an internal process in place to review Federal Funding Accountability and Transparency Act reporting obligations monthly for timely reporting.”
Subrecipient Monitoring Program Name: Low-Income Home Energy Assistance Program (LIHEAP) (Assistance Listing 93.568) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2023, 2024, and 2025 Federal Award Numbers: 2301CTLIEA, 2301CTLIEE, 2401CTLIEA, 2401CTLIEI, 2501CTLIEA, and 2501CTLIEI Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.332 provides that the pass-through entity shall monitor subrecipient activities as necessary to ensure that they comply with federal statutes, regulations, and the subaward’s terms and conditions and ensure that they achieve performance goals and objectives. This includes a review of a pass-through entity’s required financial and performance reports. Condition Our review of subrecipient monitoring over nine Low-Income Home Energy Assistance Program (LIHEAP) subrecipients disclosed that the Department of Social Services (DSS) did not conduct annual fiscal reviews for one subrecipient. Context During the fiscal year ended June 30, 2025, DSS provided nine subrecipients with $75,417,156 of LIHEAP funds to administer the program. Questioned Costs $0 Effect DSS has limited assurance that federal funds were used for allowable activities. Cause Low staffing levels hindered the department. DSS lacks proper subrecipient monitoring procedures. Prior Audit Finding We previously reported this as finding 2024-022 and in one prior audit. Recommendation The Department of Social Services should strengthen internal controls to ensure it complies with federal subrecipient monitoring requirements for the Low-Income Home Energy Assistance Program. Views of Responsible Officials “The Department agrees with this finding and is in the process of hiring an additional staff member to assist with subrecipient monitoring. The LIHEAP unit is developing collaboration and cross-training by incorporating program liaisons to monitor portions of the financial requirements which coincide with program fuel slip monitoring reviews. The Department is creating a financial review tool to ensure consistency in the review of data to document in the financial report output.”
Subrecipient Monitoring Program Name: Social Services Block Grant (SSBG) (Assistance Listing 93.667) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2301CTSOSR, 2401CTSOSR, and 2501CTSOSR Background The Department of Social Services (DSS) is the designated single state agency in Connecticut for the allocation and administration of the Social Services Block Grant (SSBG) program. SSBG funds support programs of several state agencies including the Department of Housing (DOH). Criteria Title 2 U.S. Code of Federal Regulations Part 200.332 provides that the pass-through entity shall monitor subrecipient activities as necessary to ensure that they comply with federal statutes, regulations, and the subaward’s terms and conditions and ensure that they achieve performance goals and objectives. This includes a review of a pass-through entity’s required financial and performance reports. Condition Our review of subrecipient monitoring procedures over ten subrecipients that received $3,941,010 in SSBG funds disclosed the following: 1. DOH did not monitor four subrecipients for overdue programmatic reports, three for overdue client satisfaction surveys, five for overdue state single audits, and eight for overdue annual financial audits. 2. DOH did not adequately review expenditures in financial reports submitted by ten subrecipients. 3. DOH did not review state single audits for seven subrecipients. 4. DOH did not accurately complete administrative monitoring reports for three subrecipients. Context During the fiscal year ended June 30, 2025, DOH provided 26 subrecipients with $7,478,584 of SSBG funds to administer various programs for homeless individuals. The sample was not statistically valid. Questioned Costs $0 Effect DSS and DOH have limited assurance that federal funds were used for allowable activities. Cause The condition resulted from a lack of management oversight. Prior Audit Finding We previously reported this as finding 2024-025 and in ten prior audits. Recommendation The Department of Housing should strengthen internal controls to ensure compliance with federal requirements for monitoring subrecipients for the Social Services Block Grant program. As the lead agency for SSBG, the Department of Social Services should strengthen procedures to monitor how other state agencies address known deficiencies identified in Statewide Single Audit reports. Views of Responsible Officials Response provided by the Department of Housing: “DOH agrees with this finding. DOH did contract with a third-party entity to complete all programmatic monitoring and review of financial expenditures documented in the most recent financial report submitted by the provider to DOH and all agencies were monitored. Some agencies did not submit financial reports in a timely manner. DOH did reach out multiple times to get these reports from the providers by the due date but we were unsuccessful. Due to staffing constraints, DOH was not able to schedule in person monitoring visits to those entities that did not submit timely financial reports. During FY-2025, we successfully transitioned to CORE-Uniform Chart of Accounts (UCOA) financial reporting. This transition will help both the provider with submitting timely reports and DOH reviewing it. Currently, CORE doesn’t allow uploads of supported documentation. However, we are actively working with the Office of Policy and Management (OPM) on a solution and if successful, the task of financial review no longer needs to be outsourced to a third-party and it can be done internally.” Response provided by the Department of Social Services: “The Department agrees with this finding and with DOH’s proposed corrective action plan. The Department will schedule status meetings with DOH to ensure timely reporting in addition to the memorandum of agreement (MOA) year end reporting requirement. The Department will draft a corresponding quarterly report tracking tool to ensure reporting deliverable oversight and follow up of the DOH contractors.”
Eligibility Program Name: Children’s Health Insurance Program (CHIP) (Assistance Listing 93.767) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2023 and 2024 Federal Award Numbers: 2305CT3002 and 2405CT5021 Background The Department of Social Services (DSS) is the designated single state agency to administer medical assistance programs and the Children’s Health Insurance Program (CHIP). CHIP provides health insurance to eligible children. DSS uses several systems to administer CHIP. The Access Health Connecticut (AHCT) web portal is the primary system that maintains applications and determines eligibility for CHIP enrollees. The Integrated Management of Public Assistance for Connecticut (ImpaCT) system maintains client data and eligibility status for state and federal programs administered by DSS. The Medicaid Management Information System (MMIS) processes payments for medical services and provides financial reports used for federal reimbursement claims. AHCT interfaces with ImpaCT and ImpaCT interfaces with MMIS. Criteria Title 42 U.S. Code of Federal Regulations (CFR) Part 457.310(b)(2)(ii) states that, to be eligible for CHIP, a targeted low-income child must not be covered under a group health plan or health insurance. The CHIP State Plan also provides that if a child has other insurance coverage, the child is not eligible for CHIP. Title 42 CFR Part 457.320(a)(2) states that, to be eligible for CHIP, a targeted low-income child must be under, not including, the age of 19. Title 42 CFR Part 457.310(b)(1) states that a targeted low-income child is a child who has a household income at or below 200% of the federal poverty level for a family of the size involved or has a household income that exceeds the Medicaid applicable income level but not by more than 50%. Condition We reviewed 25 CHIP eligibility determinations. Our review included 15 CHIP eligibility determinations totaling $2,068, of which $1,344 was federally reimbursed and all paid claims for ten clients who had third-party insurance totaling $16,621, of which $10,804 was federally reimbursed. Our review disclosed the following: 1. MMIS improperly paid a $10 claim for one client when AHCT and ImpaCT determined this client was not eligible for CHIP. Furthermore, DSS paid an additional $1,808 in CHIP benefits for the ineligible client during fiscal year 2025. 2. The AHCT web portal improperly determined nine clients as eligible for CHIP when they had third-party insurance coverage at the time of enrollment. DSS paid $16,537 in benefits for these clients. Our analysis of CHIP data identified 326 clients who aged out of the program when they turned 19. DSS paid $531,670 in benefits for these clients who were no longer eligible for CHIP. Context During the fiscal year ended June 30, 2025, DSS claimed $74,165,152 in expenditures for CHIP clients, of which $48,207,349 was federally reimbursed. The sample was not statistically valid. Questioned Costs We computed $357,516 in questioned costs by applying the applicable federal financial participation rate to the unallowed expenditures. Effect DSS received federal reimbursement for unallowed expenditures. Cause During the audit period, DSS lacked controls to verify third-party insurance of clients enrolled in CHIP. Although DSS contracts with a healthcare technology organization to help identify third-party liability for medical expenditures and the corresponding collections, the contract does not include review of third-party insurance for existing CHIP clients. MMIS, AHCT, and ImpaCT did not consistently maintain time of service eligibility information for CHIP enrollees. DSS lacked internal controls to discontinue CHIP eligibility for clients that turned 19. Prior Audit Finding We previously reported this as finding 2024-019 and in five prior audits. Recommendation The Department of Social Services should strengthen internal controls to ensure that each Children’s Health Insurance Program recipient is eligible for the program according to the state plan and federal regulations. Views of Responsible Officials “The Department agrees with this finding. Condition #1: This was a processing error and was independently addressed. Condition #2: The findings were for cases that were granted prior to the implementation of the Department’s manual review process, which includes updating third-party information in the Health Insurance Exchange (HIX) system after verifying policy information. This process was officially started in May 2025. It is a post-enrollment function since it is permissible for clients to self-attest to having third-party liability (TPL) at the time of application. We expect to see a reduction in this type of error in future audits. There is an inevitable delay in DSS being notified of any discrepancies with TPL details due to the timing of that information being updated from carriers and then provided to DSS. With our new process, we can close these cases as soon as that information is available to us. Condition #3: There are multiple root causes related to this finding, including Premium Payment Module file transaction issues, reversing system functionality that was temporarily implemented during the COVID-19 Public Health Emergency which resulted in lingering enrollment issues, and staff processing errors. DSS regularly reviews age-out cases to take the necessary actions to close. Please note, the Department will not be returning the questioned costs associated with this finding. According to federal regulations, recoveries based on eligibility errors can only be pursued when identified by programs operating under Centers for Medicare and Medicaid Services’ (CMS) Payment Error Rate Measurement program, per section 1903(u) of the Social Security Act and regulations at Title 42 CFR Part 431, Subpart Q.”
Activities Allowed or Unallowed – Benefit Payments Program Name: Money Follows the Person Rebalancing Demonstration (MFP) (Assistance Listing 93.791) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 1LICMS300142 Background The Department of Social Services (DSS) is the designated single state agency to administer the Medicaid program in accordance with Title 42 U.S. Code of Federal Regulations (CFR) 431. Connecticut administers benefit payments for the Money Follows the Person Rebalancing Demonstration (MFP) program the same way it administers Medicaid benefit payments. Criteria Title 2 CFR Part 200.403 provides that to be allowable under federal awards, costs should be adequately documented. The DSS Provider Enrollment Agreement requires the medical provider to only submit claims for medical goods and services they provided to the MFP recipient. Condition Our review of 40 MFP benefit payments totaling $49,144, of which $36,858 was federally reimbursed, disclosed that one medical provider submitted a claim with $146 of services that the provider did not perform, of which $110 was federally reimbursed. Context During the fiscal year ended June 30, 2025, DSS processed $18,243,599 in MFP benefit payments and received $13,682,699 in federal reimbursement. The sample was not statistically valid. Questioned Costs We computed questioned costs of $110 by applying the applicable federal financial participation rate to the unallowed expenditures. Effect DSS received federal reimbursement for unallowed expenditures. Cause The medical provider billed for eight hours of services when they only performed two hours of services. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should conduct an audit of the medical provider in accordance with Section 17b-99 of the Connecticut General Statutes to ensure integrity of the Money Follows the Person Rebalancing Demonstration program. The Department of Social Services should recoup any improper payments issued to medical providers and refund the corresponding federal reimbursements to the Centers for Medicare and Medicaid Services. Views of Responsible Officials “The Department agrees with the finding. The improper payment has been recouped and the DSS Audit Division will open an audit of the provider.”
Activities Allowed or Unallowed – Individual Plans and Service Records Program Name: Money Follows the Person Rebalancing Demonstration (MFP) (Assistance Listing 93.791) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 1LICMS300142 Background The Department of Social Services (DSS) is the designated single state agency to administer the Money Follows the Person Rebalancing Demonstration (MFP) program. Connecticut administered certain aspects of MFP through several state agencies including the Department of Developmental Services (DDS). Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.403 provides that to be allowable under federal awards, costs should be adequately documented. Title 2 CFR Part 200.303 requires the non-federal entity to establish, document, and maintain effective internal controls over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Procedure No. I.C.1.PR.002.a. of the DDS Operation Manual states that DDS should obtain agreements and approvals for the individual plan during the planning process. The case manager should document who participated in the planning process and obtain signatures on the individual plan. Participants typically include the recipient, parent, guardian, advocate, case manager, support brokers, private agency designee, and other DDS staff. Condition Our review of 25 MFP benefit payments totaling $11,000, of which $8,250 was federally reimbursed, disclosed that DDS did not have signatures of agreement and approval for six individual plans. Additionally, DDS could not obtain service records from one medical provider to support one $46 payment, for which DSS received $35 in federal reimbursement. Context During the fiscal year ended June 30, 2025, DSS processed $4,978,654 in MFP benefit payments on behalf of 36 DDS recipients. DSS received $3,733,990 in federal reimbursement. The sample was not statistically valid. Questioned Costs $0 Effect The lack of signatures to indicate agreement and approval of an individual plan by relevant participants increases the risk of inadequate services for the recipient. DSS received federal reimbursement for an unallowed expenditure. Cause Lack of management oversight contributed to the condition. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Developmental Services should strengthen internal controls to ensure it obtains the required signatures for the individual plan for all Money Follows the Person Rebalancing Demonstration recipients. The Department of Social Services should conduct an audit of the medical provider in accordance with Section 17b-99 of the Connecticut General Statutes to ensure integrity of the Money Follows the Person Rebalancing Demonstration program. Views of Responsible Officials Response provided by the Department of Developmental Services: “DDS agrees with the finding. The errors were attributed to current manual processes and case management oversight regarding documenting signatures when individual plan (IP) meetings are held remotely rather than in-person. Most of the deficiencies (5 of 6) were isolated to one case manager. The MFP division is small with 3-4 case managers, causing a higher error rate when extrapolated against the sample size. The missing support service records have been forwarded to the Department of Administrative Services for research. There are plans to improve the individual plan process to enhance internal controls through automation. In the interim, case managers and case manager supervisors will be reminded of the IP signature requirements.” Response provided by the Department of Social Services: “The Department agrees with this finding and the response provided by the Department of Developmental Services. Additional research is needed to determine whether the missing documentation was the provider's responsibility or was due to a billing issue. The Department of Developmental Services is coordinating with the Department of Administrative Services to research this further.”
Eligibility Program Name: Money Follows the Person Rebalancing Demonstration (MFP) (Assistance Listing 93.791) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 1LICMS300142 Background The Department of Social Services (DSS) uses several systems to administer the Money Follows the Person Rebalancing Demonstration (MFP) program. The My Community Choices web portal is the primary system that maintains data about MFP applicants and participants, including client start and end dates. The DSS eligibility management system maintains client eligibility determinations for the program. The Medicaid Management Information System (MMIS) processes medical services payments and provides financial reports for federal reimbursement claims. Since the My Community Choices web portal does not interface with other systems, DSS staff must manually input client MFP program start and end dates into the DSS eligibility management system. The DSS eligibility management system interfaces with MMIS daily. Criteria Section 6071(b)(2) of Public Law 109-171 defines an eligible individual for the MFP demonstration project as a person who, immediately before beginning participation in the MFP demonstration project, resides in an inpatient facility, receives Medicaid benefits for inpatient services, continues to require the level of care provided in an inpatient facility, and who resides in a qualified residence beginning on the initial date of participation in the demonstration project. Section 6071(b)(7) of Public Law 109-171 defines qualified expenditures by the state under its MFP demonstration project as home and community-based long-term care services for an eligible individual participating in the MFP demonstration project. However, this is only with respect to services furnished during the 12-month period beginning with the individual's discharge date from an inpatient facility. Title 2 U.S. Code of Federal Regulations (CFR) Part 200.403 provides that to be allowable under federal awards, costs should conform to any limitations or exclusions set forth in the federal award. Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal controls over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Title 42 CFR Part 431.420 requires the state to comply with the terms and conditions of the MFP demonstration project. MFP terms and conditions require the state to ensure the availability of adequate resources for implementation and monitoring of the demonstration project including tracking participant enrollment, maintaining eligibility systems, and administering effective transition coordination. MFP terms and conditions require the state to develop and amend an operational protocol that details how the state will adhere to statutory and program requirements. Section B of the MFP Operational Protocol includes the following policies and procedures. • Determining MFP eligibility includes ensuring an individual’s annualized cost of care in the community is equal to or less than the annualized rate paid for residing in an institution. • The state will not provide an administrative hearing to an applicant for denied services due to the applicant’s care plan exceeding the allowable cost of care in the community. • The state will suspend MFP participation and services during any inpatient stay. Suspended MFP participants may continue MFP participation upon discharge from the inpatient facility. Condition We reviewed 40 MFP claims, totaling $49,144, of which $36,858 was federally reimbursed, to determine if DSS properly granted eligibility. Our review disclosed the following: 1. DSS did not terminate MFP participation for two clients. DSS processed $918 for the selected claims for these clients. DSS processed $184,088 in additional claims in fiscal year 2025 and $270,274 in claims in prior fiscal years for periods when these clients were no longer eligible under the MFP program. DSS should have ended participation on April 5, 2018, and July 30, 2020, respectively. 2. DSS processed $7,724 of ineligible MFP expenses for two clients during inpatient hospital or nursing facility stays ranging from 14 to 21 days. DSS did not properly track MFP participation dates for these clients in its systems. Additionally, DSS did not properly track participation dates for a third client for seven days of hospitalization. 3. DSS approved two applicant care plans that exceeded the cost of institutional care by $1,530 (19%) and $3,507 (39%) per month. 4. DSS did not perform or document a comparative cost analysis for one client to demonstrate that care plan costs did not exceed nursing facility costs. Context During the fiscal year ended June 30, 2025, DSS processed $18,243,599 in payments on behalf of 824 MFP clients and received $13,682,699 in federal reimbursement. The sample was not statistically valid. Questioned Costs We computed questioned cost of $347,253 by applying the applicable federal financial participation rate to the ineligible expenditures. Questioned costs were $144,548 for fiscal year 2025 and $202,705 for prior fiscal years. Effect DSS provided MFP benefits to ineligible individuals. DSS received federal reimbursement for unallowed expenditures. Cause The My Community Choices web portal did not interface with DSS eligibility and financial systems. DSS relied on staff to manually input client participation start and end dates in multiple systems. Management oversight did not identify input errors of client participation dates. DSS management overrode applicant care plan costs. The MFP Operational Protocol has no written procedures to override program policies or federal regulations. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to ensure that only eligible recipients receive Money Follows the Person Rebalancing Demonstration services in accordance with federal laws, award terms and conditions, and the Money Follows the Person Operational Protocol. Views of Responsible Officials “The Department agrees in part with this finding. Condition #1: DSS agrees that participation end dates were not updated timely due to cross-system manual entry limitations. Reconciliation procedures and supervisory oversight will be strengthened. Condition #2: DSS agrees that participation suspensions were not consistently reflected across systems due to timing delays. Monitoring and real-time reconciliation controls will be enhanced. Condition #3: DSS agrees approved costs exceeded institutional thresholds in limited cases. Variances were clinically justified, reviewed, and authorized. DSS will strengthen documentation and internal protocols to ensure clearer policy alignment. Condition #4: DSS agrees that the documentation was incomplete in one instance. Internal review standards will be reinforced to ensure comparative cost analyses are consistently documented. Please note, the Department will not be returning the questioned costs associated with this finding. According to federal regulations, recoveries based on eligibility errors can only be pursued when identified by programs operating under Centers for Medicare and Medicaid Services’ (CMS) Payment Error Rate Measurement program, per section 1903(u) of the Social Security Act and regulations at Title 42 CFR Part 431, Subpart Q.” Auditors’ Concluding Comments The Department of Social Services should amend its MFP Operational Protocol and seek approval from the Centers of Medicare and Medicaid Services if the department plans to continue to use management overrides of care plan costs.
Performance Reporting – Semi-Annual Progress Report and Special Reporting – MFP Work Plan Program Name: Money Follows the Person Rebalancing Demonstration (MFP) (Assistance Listing 93.791) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 1LICMS300142 Criteria The Money Follows the Person (MFP) Rebalancing Demonstration federal award requires the state to provide programmatic reports in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200.301. Title 2 CFR Part 200.301 requires the state to correlate financial data to performance accomplishments of the federal award. The state should also measure performance in a way that will help the United States Department of Health and Human Services (DHHS) and other non-federal entities to improve program outcomes, share lessons learned, and spread the adoption of promising practices. Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal controls over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. MFP terms and conditions require the state to submit a work plan that documents its progress on the use of initiatives designed to increase the use of home and community-based services rather than institutional long-term services and supports. MFP terms and conditions require the state to submit semi-annual progress reports that present the state’s analysis and the status of various operational areas in reaching the objectives of the demonstration. The semi-annual progress report documents the state’s progress in meeting MFP operational procedures and processes, transition benchmarks, and program goals for expanding and enhancing home and community-based services. Title 2 CFR Part 200.334 requires the state to retain financial and programmatic records to support reported information for three years from the date of submission. Condition Our review of the MFP work plan and semi-annual progress report for July 1 to December 31, 2024, disclosed that the Department of Social Services (DSS) did not maintain MFP program data to support figures reported for seven performance objectives in the work plan and 11 performance measures in the semi-annual progress report. Context DSS submitted two semi-annual progress reports and two work plans to DHHS during fiscal year 2025. The sample was not statistically valid. Questioned Costs $0 Effect DSS may have submitted an inaccurate work plan and progress report. DHHS may be using unreliable data to identify promising practices and make future federal program decisions. Cause DSS lacked adequate controls to document and retain MFP data. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls over performance and special reporting for the Money Follows the Person Rebalancing Demonstration to ensure it maintains data to support figures reported to the Department of Health and Human Services. Views of Responsible Officials “The Department agrees with this finding and is taking steps to strengthen internal controls over performance monitoring and special reporting for the Money Follows the Person (MFP) Rebalancing Demonstration. DSS is implementing a secure SharePoint repository to centrally maintain, organize, and track all documentation supporting the MFP Work Plan and the MFP Semi-Annual Report.”
Cash Management Program Name: HIV Care Formula Grants (Ryan White HIV/AIDS Program Part B) (Assistance Listing 93.917) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: 6 X07HA00022-34-01 Background The Department of Public Health (DPH) receives rebates for pharmaceuticals and records them as revenue for the Ryan White HIV/AIDS Program Part B to reduce the program’s cash needs. DPH uses a drawdown tool to determine the timing and amount of its federal drawdowns. Criteria Title 31 U.S. Code of Federal Regulations (CFR) Part 205.11(a) provides that a state must minimize the time elapsing between the transfer of funds from the United States Treasury and the state's payout of funds for federal assistance program purposes, whether the transfer occurs before or after the payout of funds. Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal control over federal awards that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reviewed DPH’s drawdown tool and determined that it was not effective in monitoring the department’s cash needs. The tool understated expenditures by $29,208,717. As a result, the cash-on-hand amounts were not reliable. Context DPH drew down $8,881,530 for expenditures during the audited period. Questioned Costs $0 Effect Ineffective monitoring of cash needs increases the risk that federal drawdowns will not occur in accordance with the department’s immediate cash requirements to administer the program. Cause A lack of management oversight contributed to the condition. Prior Audit Finding We previously reported this as finding 2024-200. Recommendation The Department of Public Health should strengthen internal controls over cash management to ensure that federal drawdowns align with the immediate cash needs to administer the program. Views of Responsible Officials “We agree with this finding. The Fiscal Department, in collaboration with Management Assurance, has implemented enhanced internal controls to strengthen oversight of cash management activities. Together, the teams developed and formalized enhanced control measures within the Drawdown Tool. These enhancements include daily transaction-level monitoring, integration of rebate offsets, application of a multi-SID tiered allocation structure, and the addition of 90-day liquidation period. The controls have been clearly documented to address identified gaps in operational effectiveness and ensure a balanced approach between automation and manual oversight. This framework provides increased transparency and reliability in managing the timely and accurate drawdown of Ryan White Part B funds while ensuring strong standards and best practices.”
Subrecipient Monitoring Program Name: HIV Care Formula Grants (Ryan White HIV/AIDS Program Part B) (Assistance Listing 93.917) Federal Award Agency: United States Department of Health and Human Services Award Year: Federal Fiscal Year 2024 Federal Award Numbers: 5 X07HA00022-33-00 and 6 X07HA00022-34-01 Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.332(e) provides that the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subrecipient used the subaward for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward and ensure that they achieve performance goals. This includes reviewing financial and performance reports required by the pass-through entity. The Ryan White HIV/AIDS Program Part B Manual requires an annual on-site financial review of all subrecipients to ensure compliance with federal and state requirements and the terms and conditions of the department’s contract. Condition Our review of the Department of Public Health (DPH) monitoring procedures for six not-for-profit and one for-profit subrecipients disclosed that the department did not conduct annual on-site financial review visits for any of the six not-for-profit subrecipients. Context During the fiscal year ended June 30, 2024, DPH provided $4,262,325 to six not-for-profit subrecipients and $21,633,283 to a for-profit subrecipient for AIDS health care and support services. We selected all seven fiscal year 2024 subrecipients for review as DPH had not completed the monitoring site visits for fiscal year 2025 funds. During the fiscal year 2025, the department provided $13,216,793 to subrecipients. Questioned Costs $0 Effect DPH had reduced assurance that its subrecipients used federal funds for allowable activities. Cause The department did not complete the financial reviews for fiscal year 2024 because staff lacked proper training, which was necessary due to new federal compliance requirements and DPH’s recent implementation of new audit software. Prior Audit Finding We previously reported this as finding 2024-201 and in one prior audit. Recommendation The Department of Public Health should strengthen internal controls to ensure compliance with federal requirements for monitoring subrecipients of the Ryan White HIV/AIDS Program Part B. Views of Responsible Officials “We agree with this finding. With the implementation of the new auditing software, Management Assurance will create a comprehensive, trackable financial review program and will ensure the reviews are completed in accordance with Federal guidance. We anticipate having the software fully implemented and the financial review program operational by March 01, 2026; the financial reviewer will be trained on the software and the program requirements no later than May 01, 2026. The financial reviews will begin as soon as possible after the reviewer completes their training; we intend to have a completed financial review for all Ryan White regional leads by year-end 2026.”
Cash Management – Excessive Drawdown Program Name: Block Grants for Prevention and Treatment of Substance Use (Assistance Listing 93.959) Federal Award Agency: United States Department of Health and Human Services Award Year: Federal Fiscal Year 2024 Federal Award Number: 1B08TI087029-01 Criteria Title 31 U.S. Code of Federal Regulations (CFR) Part 205.33(a) provides that a state must minimize the time between the drawdown of federal funds from the federal government and their disbursement for federal program purposes. The timing and amount of funds transferred must be as close as is administratively feasible to a state's actual cash outlay for direct program costs and the proportionate share of any allowable indirect costs. Condition The Department of Mental Health and Addiction Services (DMHAS) drew down $2,531,132 of excess cash. Context During the fiscal year ended June 30, 2025, DMHAS drew down federal funds for the reimbursement of program expenditures three times totaling $10,233,553 from the federal award number 1B08TI087029-01 grant. For this grant, we calculated a running balance of expenditures and drawdowns within the period of performance and found that the $3,993,693 drawdown on September 25, 2024 exceeded program expenditures by $2,531,132. The department recorded $2,531,132 in program expenditures the following month. Questioned Costs $0 Effect DMHAS did not comply with cash handling requirements and drew down more federal funds than they expended on program activities. Cause When DMHAS drew down federal funds on September 25, 2024, it did not account for funds it previously drew down on September 4, 2024. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Mental Health and Addiction Services should strengthen internal controls over cash management to ensure federal funds it draws down for the Block Grant for Prevention and Treatment of Substance Use program are supported by expenditures. Views of Responsible Officials “We agree with this finding and are committed to ensuring that all future drawdowns are handled accurately and in accordance with federal guidelines. To address this issue and prevent its recurrence, management is implementing the following corrective actions: 1. Enhanced Reconciliation Procedures: The Department will strengthen the monthly and pre-drawdown reconciliation process to ensure that all draw requests are fully supported by corresponding program expenditures before submission. This revised process will help prevent errors in future drawdowns and ensure compliance with cash handling requirements. 2. Updated Written Procedures: Written procedures for drawdowns will be updated to clearly define drawdown eligibility criteria, documentation requirements, and approval responsibilities. These revisions will provide clear guidance to staff involved in the drawdown process. 3. Training and Staff Development: Management will conduct training for all relevant staff members involved in the drawdown and reconciliation process. This training will focus on the importance of compliance with federal requirements, internal controls, and the proper documentation needed for drawdowns.”
Reporting – Federal Funding Accountability and Transparency Act Program Name: Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Assistance Listing 97.036) Federal Award Agency: United States Department of Homeland Security Award Years: Federal Fiscal Years 2020 - 2025 Federal Award Numbers: 4087DRCTP00000001, 4500DRCTP00000001, and 4820DRCTP00000001 Background The Disaster Grants – Public Assistance program provides funding to state and local governments and certain types of private nonprofit organizations so that communities can quickly respond to and recover from presidentially declared disasters and emergencies. The Department of Emergency Services and Public Protection (DESPP) is the primary recipient for the State of Connecticut and is responsible for working with the Federal Emergency Management Agency (FEMA) throughout the disaster response and recovery process. In coordination with FEMA, DESPP receives and distributes funding to subrecipients for all projects within the state. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 CFR Part 170 Appendix A requires that states report any action that obligates $30,000 or more in federal funds for a subaward to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the following month after making the obligation. Recipients are to accurately report key data elements such as subaward numbers, amounts, and obligation dates. As of March 8, 2025, FSRS was retired and all subaward reporting data and functionality are now on the System for Award Management (SAM.gov). Condition DESPP did not establish effective internal controls over Federal Funding Accountability and Transparency Act (FFATA) reporting. The same individual entered subawards into FSRS and SAM.gov and reviewed the entries for accuracy and completeness. There was no documented management review process to verify the accuracy, completeness, and timeliness of FFATA reporting. We randomly selected ten subawards of $30,000 or more, totaling $12,224,700, and identified the following conditions: • DESPP entered two subawards, totaling $435,831, into FSRS 18 and 580 days late. • DESPP did not maintain adequate documentation to support the date it reported two subawards, totaling $9,556,735. As a result, we could not determine if DESPP reported the subawards on time. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 10 0 2 0 0 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $12,224,700 $0 $435,831 $0 $0 Context During the fiscal year ended June 30, 2025, DESPP made 68 subawards of $30,000 or more, totaling $38,215,595. The sample was not statistically valid. Questioned Costs $0 Effect There is an increased risk for inaccurate, incomplete, and untimely FFATA reporting. Additionally, DESPP decreased its public transparency regarding its spending of federal awards. Cause Management did not adequately monitor the internal control system or promptly remediate internal control deficiencies identified during prior audits, which contributed to the identified conditions. Prior Audit Finding We previously reported this as finding 2024-350 and in three prior audits. Recommendation The Department of Emergency Services and Public Protection should strengthen internal controls and promptly report subawards in compliance with the Federal Funding Accountability and Transparency Act. Views of Responsible Officials “DESPP does not agree with this finding. DESPP utilizes the federally designated FFATA reporting system (SAM.gov) for all FFATA reporting. This system does not possess the capability for any layered review or approval of information prior to upload or post submission. The system has no reporting mechanism to review information input into this system. Further, the system does not maintain capability to track the dates of changes and it records over upload dates at future submission timeframes. These issues have been repeatedly brought to the attention of both SAM.gov administrators at the federal level and DESPP’s FEMA funding agencies. In response to a similar finding by FEMA, DESPP provided the attached information, after which FEMA closed the DESPP finding. DESPP will continue to attempt to work with SAM.gov administrators to advocate for modifications to the FFATA reporting system to address these concerns, but is unable to address them unilaterally without federal agency intervention.” Auditors’ Concluding Comments DESPP should maintain sufficient documentation outside of SAM.gov to demonstrate compliance with reporting requirements and approvals by agency personnel.
Allowable Costs/Cost Principles – Assistance Payments Program Names: COVID-19 Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 VO Program Name: Mainstream Vouchers (Assistance Listing 14.879) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 DVO Background The United States Department of Housing and Urban Development’s (HUD) Section 8 Housing Choice Vouchers Program provides rental assistance to help very low-income families afford decent, safe, and sanitary housing. Section 3202 of the American Rescue Plan Act of 2021 provided for new incremental Emergency Housing Vouchers. Office of Public and Indian Housing (PIH) notice PIH 2021-25 provides that public housing agencies (PHA) should report Emergency Housing Vouchers under the Section 8 Housing Choice Vouchers Program. The Mainstream Vouchers Program enables families to lease affordable private housing when the head, spouse, or co-head is a person with disabilities. Public housing agencies are authorized to administer the programs locally and make housing assistance payments on behalf of eligible families directly to landlords for the lease of suitable program-eligible rental housing. In Connecticut, the programs are administered locally by over 40 public housing agencies and statewide by the Department of Housing (DOH) and its contracted vendor. DOH advances program funds to its contractor that disburses the funds to landlords and participants. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 24 CFR Part 982.158 provides that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a prompt and effective audit. Title 24 CFR Part 982.305 provides that the PHA must execute a HAP contract no later than 60 calendar days from the beginning of the lease term. The PHA must not pay any housing assistance payment to the owner until it has executed the contract. If the PHA executes the HAP contract during the period of 60 calendar days from the beginning of the lease term, it will pay housing assistance payments after the execution of the HAP contract. Any HAP contract executed after the 60-day period is void, and the PHA may not pay any housing assistance payment to the owner. Title 24 CFR Part 982.503 requires the PHA to adopt a payment standard schedule that establishes voucher payment standard amounts for each fair market rent area in the PHA jurisdiction. For each fair market rent area, the PHA must establish payment standard amounts for each unit size. Unit size is measured by the number of bedrooms. Title 24 CFR Part 982.505 states that a payment standard is used to calculate the monthly housing assistance payment for a family. The payment standard for the family is the lower of the payment standard amount for the family unit size or the payment standard amount for the size of the dwelling unit rented by the family. Title 24 CFR Part 982.516 requires the PHA to conduct a reexamination of family income and composition at least annually. The PHA must obtain and document in the tenant file third-party verifications of reported family annual income, the value of assets, expenses related to deductions from annual income, and other factors that affect the determination of adjusted income, or must document why third-party verification was not available. At the effective date of a regular or interim reexamination, the PHA must make appropriate adjustments in the HAP. Title 24 CFR Part 982.517 requires the PHA to maintain a utility allowance schedule for all tenant-paid utilities (except telephone), for tenant supplied refrigerators and ranges, and for other tenant paid housing services (e.g., trash collection). The utility allowance schedule must be determined based on the typical cost of utilities and services paid by energy-conservative households that occupy housing of similar size and type in the same locality. The PHA must review its schedule each year and must revise its allowance for a utility category if there has been a change of ten percent or more in the utility rate since the last time the utility schedule was revised. Condition Our review of 60 housing assistance payments and utility reimbursements, totaling $99,286 and $2,813, respectively, disclosed that in 14 cases, payments were incorrectly calculated. Some cases had multiple errors. • In two cases, the PHA incorrectly calculated the tenant’s total annual adjusted income. • In eight cases, the PHA incorrectly calculated the tenant’s total annual income. • In three cases, the PHA did not use the correct payment standard. • In two cases, the PHA incorrectly calculated the utility allowance or did not use the correct utility allowance schedule. These errors resulted in $1,211 in housing assistance and utility reimbursement overpayments and $49 in underpayments for the tested benefit months. Further review noted an additional $8,495 in housing assistance and utility reimbursement overpayments, and $379 in underpayments during the audited period. We also noted that in two cases, the PHA paid $37,233 under housing assistance payment contracts that were void because they were not executed within 60 calendar days from the beginning of the lease term. Context During the fiscal year ended June 30, 2025, housing assistance payment transactions and utility reimbursements for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs totaled $127,656,361. The sample was not statistically valid. Questioned Costs Our review identified questioned costs totaling $41,491 for the Section 8 Housing Choice Vouchers program. Effect DOH has reduced assurance of the accuracy of housing assistance payments and utility reimbursements. Cause The conditions are due to a lack of management oversight. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Housing should strengthen internal controls to ensure that it properly calculates Section 8 Housing Choice Vouchers and Mainstream Vouchers housing assistance and utility benefit payments. Views of Responsible Officials “We agree with the finding. DOH did contract with a third-party entity to provide these services; however, DOH retains overall responsibility for the program. Recently, DOH established a Section 8 division within DOH to provide more oversight over the program and the contactor. We are working closely with the contractor to strengthen their internal control, develop policies and procedures. DOH will continue collaborating with the contractor to enhance system controls and minimize the risk of future issues. All identified errors in this finding have been corrected including the questionable cost, and the software now includes a new feature designed to prevent similar problems going forward. DOH remains committed to continuous improvement and effective oversight of the program and contractor.”
Eligibility Program Names: COVID-19 Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 VO Program Name: Mainstream Vouchers (Assistance Listing 14.879) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 DVO Background The United States Department of Housing and Urban Development’s (HUD) Section 8 Housing Choice Vouchers Program provides rental assistance to help very low-income families afford decent, safe, and sanitary housing. Section 3202 of the American Rescue Plan Act of 2021 provided for new incremental Emergency Housing Vouchers. Office of Public and Indian Housing (PIH) notice PIH 2021-25 provides that public housing agencies (PHA) should report Emergency Housing Vouchers under the Section 8 Housing Choice Vouchers Program. The Mainstream Vouchers Program enables families to lease affordable private housing when the head, spouse, or co-head is a person with disabilities. Public housing agencies are authorized to administer the programs locally and make housing assistance payments on behalf of eligible families directly to landlords for the lease of suitable program-eligible rental housing. In Connecticut, the programs are administered locally by over 40 public housing agencies and statewide by the Department of Housing (DOH) and its contracted vendor. DOH advances program funds to its contractor that disburses the funds to landlords and participants. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 24 CFR Part 982.158 provides that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a prompt and effective audit. Title 24 CFR Part 5.233 requires PHAs to use the Enterprise Income Verification system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations of family compositions and income. Office of Public and Indian Housing (PIH) notice PIH 2018-18 provides that PHAs maintain the report and documentation of any follow up in the tenant file. The PHAs are also required to maintain copies of the Enterprise Income Verification income and Income Validation Tool reports used to confirm family reported income within 120 days of the Inventory Management Public and Indian Housing Information Center submission date. Office of Public and Indian Housing (PIH) notice PIH 2012-28 provides that PHAs adopt procedures at admission and at annual recertification/reexamination to prevent lifetime registered sex offenders from receiving federal housing assistance. If the tenant or a member of the tenant’s household engages in criminal activity (including sex offenses) while living in HUD-assisted housing, the PHA should pursue eviction or termination. Condition Our review of 60 housing assistance payments and utility reimbursements, totaling $99,286 and $2,813, respectively, disclosed the following: · In four cases, the PHA did not have Income Validation Tool reports on file to support tenant employment and income. · In two cases, the PHA did not receive all required source documents prior to completing the initial/annual reexaminations. · In one case, the PHA did not verify the tenant’s employment and income noted on the Income Validation Tool. · In one case, the PHA did not verify household members were not lifetime registered sex offenders or check their criminal record during the annual reexamination. Context During the fiscal year ended June 30, 2025, housing assistance payment transactions and utility reimbursements for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs totaled $127,656,361. The sample was not statistically valid. Questioned Costs $0 Effect There is an increased risk that DOH provides financial assistance to ineligible individuals. Cause The conditions are due to a lack of management oversight. Prior Audit Finding We previously reported this as finding 2024-727 and in two prior audits. Recommendation The Department of Housing should properly monitor its contractor to ensure that it only awards benefits to eligible recipients. Views of Responsible Officials “We agree with the finding. DOH did contract with a third-party entity to provide these services. The contractor has been experiencing technical difficulties accessing the HUD system. We are aware of this current situation, and we are working with HUD to resolve this issue as soon as possible. “
Special Tests and Provisions – Housing Assistance Payments Program Names: COVID-19 Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Section 8 Housing Choice Vouchers (Assistance Listing 14.871) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 VO Program Name: Mainstream Vouchers (Assistance Listing 14.879) Federal Award Agency: United States Department of Housing and Urban Development Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Number: ACC CT 901 DVO Background The United States Department of Housing and Urban Development’s (HUD) Section 8 Housing Choice Vouchers Program provides rental assistance to help very low-income families afford decent, safe, and sanitary housing. Section 3202 of the American Rescue Plan Act of 2021 provided for new incremental Emergency Housing Vouchers. Office of Public and Indian Housing (PIH) notice PIH 2021-25 provides that public housing agencies (PHA) should report Emergency Housing Vouchers under the Section 8 Housing Choice Vouchers Program. The Mainstream Vouchers Program enables families to lease affordable private housing when the head, spouse, or co-head is a person with disabilities. Public housing agencies are authorized to administer the programs locally and make housing assistance payments on behalf of eligible families directly to landlords for the lease of suitable program-eligible rental housing. In Connecticut, the programs are administered locally by over 40 public housing agencies and statewide by the Department of Housing (DOH) and its contracted vendor. DOH advances program funds to its contractor that disburses the funds to landlords and participants. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 24 CFR Part 982.158 provides that the PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a prompt and effective audit. Title 24 CFR Part 982.516 requires the PHA to conduct a reexamination of family income and composition at least annually. The PHA must obtain and document in the tenant file third-party verifications of reported family annual income, the value of assets, expenses related to deductions from annual income, and other factors that affect the determination of adjusted income, or must document why third-party verification was not available. At the effective date of a regular or interim reexamination, the PHA must make appropriate adjustments in the HAP. Condition Our review of ten housing assistance payments and utility reimbursements totaling $17,721 and $351, respectively, disclosed that in one case, the PHA incorrectly calculated the payment. The PHA incorrectly calculated the tenant’s total annual income and total allowance/deductions. These errors resulted in an overpayment of $49 for the tested benefit month. Context During the fiscal year ended June 30, 2025, housing assistance payment transactions and utility reimbursements for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs totaled $127,656,361. The sample was not statistically valid. Questioned Costs Our review identified questioned costs totaling $49 for the Section 8 Housing Choice Vouchers program. Effect DOH has reduced assurance of the accuracy of housing assistance payments and utility reimbursements. Cause The condition was due to a lack of management oversight. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Housing should strengthen internal controls to ensure that it properly calculates and supports Section 8 Housing Choice Vouchers and Mainstream Vouchers housing assistance and utility benefit payments. Views of Responsible Officials “We agree with the finding. DOH did contract with a third-party entity to provide these services; however, DOH retains overall responsibility for the program. Recently, DOH established a Section 8 division within DOH to provide more oversight over the program and contactor. We are working closely with the contractor to strengthen their internal control, develop policies and procedures. DOH will continue collaborating with the contractor to enhance system controls and minimize the risk of future issues. All identified errors in this finding have been corrected including the questionable cost. DOH remains committed to continuous improvement and effective oversight of the program and contractor. “
Allowable Costs/Cost Principles – Evidence of Services Provided by Part-Time and Extension Credit Lecturers Program Name: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing 21.027) Federal Award Agency: Department of the Treasury Award Year: Federal Fiscal Year 2025 Federal Award Number: N/A Background The Office of Policy and Management (OPM) was designated as the primary state agency responsible for overseeing the Coronavirus State and Local Fiscal Recovery Funds and reporting to the federal government. OPM allocated funds to the CT State Community College and other state agencies to assist with carrying out the program’s objectives. CT State Community College contracts with part-time and extension credit lecturers who teach a term or class at a flat rate. The college pays them in equal installments based on the terms of individual contracts. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 CFR Part 200.430(g) provides that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with the established accounting policies and procedures of the recipient. Sections 3-117(b) and 3-119(a) of the Connecticut General Statutes require state entities to certify services are received and documented before paying contractors and state employees. Condition CT State Community College made $70,175,519 in salary and fringe benefit payments for 2,796 part-time and extension credit lecturers without verifying the lecturers provided the contractual services or documenting supervisory approval. Context During the fiscal year ended June 30, 2025, CT State Community College charged $70,624,749 in payroll and fringe benefit costs to Coronavirus State and Local Fiscal Recovery Funds, of which $70,175,519 was attributed to contracted faculty members. Questioned Costs $0 Effect CT State Community College could pay part-time and extension lecturers for services they did not provide. Cause CT State Community College lacks policies and procedures to ensure compensation for part-time and extension credit lecturers is contingent on fulfillment of contractual obligations. Prior Audit Finding We previously reported this as finding 2024-400. Recommendation CT State Community College should strengthen internal controls to ensure that part-time and extension credit lecturer payroll and fringe benefits costs are based on actual time worked and are properly approved. Views of Responsible Officials Response provided by CT State Community College: “Management agrees with this finding and work towards a viable long-term solution for workload review at the campus level is underway. As noted in previous audits, controls were implemented in Banner as part of the Payroll Exception review process that was initiated by the Audit Advisory Committee. These reports are currently unavailable due to limitations that will be resolved soon. Once resolved, the reports will be shared with the appropriate academic reviewer for confirmation of services received.” Views of Responsible Officials Response provided by the Office of Policy and Management: “The Office of Policy and Management has no additional response beyond that offered by the CT State Community College.”
Eligibility – Verification Process – Care 4 Kids Program Program Names: Child Care and Development Block Grant (Assistance Listing 93.575) COVID-19 Child Care and Development Block Grant (Assistance Listing 93.575) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2021, 2023, and 2024 Federal Award Numbers: 2101CTCDC6, 2301CTCCDD, and 2401CTCCDD Program Name: Child Care Mandatory and Matching Funds of the Child Care and Development Fund (CCDF) (Assistance Listing 93.596) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2401CTCCDM, 2401CTCCDF, 2501CTCCDM, and 2501CTCCDF Criteria The Office of Early Childhood (OEC) administers the Care 4 Kids Child Care Assistance Program (CCAP) in accordance with Title 45 U.S. Code of Federal Regulations Part 98. This program provides financial assistance for childcare to low-income families. OEC contracted with a third party for eligibility processing. Sections 17b-749a through 17b-749l of the General Statutes and corresponding Regulations of Connecticut State Agencies (RCSA) govern CCAP. RCSA 17b-749-02(b)(1) requires parents and providers to supply all requested forms, information, and verification needed to determine eligibility and calculate the amount of benefits within 15 days of the initial request or the date specified by the department. RCSA 17b-749-05(d) requires gross income calculations to be based on the best estimate of the income the family is expected to receive. Income is annualized based on the amount received in the four-week period immediately prior to the date of the income calculation. If income is received regularly according to a schedule, the income is annualized based on such schedule. OEC has a policy which requires eligibility caseworkers to verify pay stubs for the most recent month. RCSA 17b-749-13(f)(1) states, in part, that the parent shall be responsible for all costs not reimbursed by the CCAP on behalf of the parent. In addition, families with employment earnings shall be responsible for paying a portion of the authorized cost of care based on a monthly sliding fee scale. OEC utilizes the State’s Integrated Management of Public Assistance for Connecticut (ImpaCT) system to process eligibility determinations and maintain client case files. Condition We reviewed 25 cases with expenditures of $19,647 and identified the following errors: Income Verification/Calculation In five cases, we could not verify the gross income calculations, or the calculations did not agree with supporting paystubs. Family Fee In six cases, we could not verify the family cost share (family fee) due to lack of supporting documentation, or the fee did not agree with existing support documentation. These errors resulted in $139 in overpayments and $360 in underpayments for the tested benefit months. Context The audit universe consisted of $269,292,104 in subsidy payments. The sample was not statistically valid. Questioned Costs Errors resulted in $139 of questioned costs for the tested benefit months. Further review noted an additional $616 in questioned costs during the audited period. We could not determine the amount of questioned costs associated with each grant award. Effect There is reduced assurance that case workers determining client eligibility properly obtained and verified applications, parent provider agreements, and supporting documentation and that OEC charged clients correct family fees. Cause OEC did not adequately ensure that caseworkers followed proper eligibility determination procedures due to a lack of management oversight. Prior Audit Finding We previously reported this as finding 2024-776 and in five prior audits. Recommendation The Office of Early Childhood should strengthen internal controls over its program eligibility verification process to ensure compliance with all federal and state regulations. Views of Responsible Officials “We agree with this finding. The Office of Early Childhood (OEC) agrees in the five selected cases--under income verification/calculation--the gross income calculations could not be verified (or the calculations did not agree with the supporting paystubs). Under family fee, OEC agrees in the six selected cases, the family cost share (family fee) could not be verified due to lack of supporting documentation or the fee did not agree with the existing support documentation. To ensure that case workers follow proper eligibility determination procedures, during the Fall of 2020, the OEC and the contractor’s Care 4 Kids Program Quality Assurance (QA) staff implemented a real-time monthly case review process. Two dedicated QA staff reviewed the 23 cases from Report 823 (The Administration for Children and Families (ACF) Improper Payments) to identify any error trends and develop action plans to address the errors. The process also includes monthly meetings between the OEC and the contractor’s team to discuss the reviews. These regular meetings allowed the OEC and the contractor’s team to work closely to streamline business processes to assist in reducing case processing errors. The contractor’s review team continued the real-time review process but took a pause in March 2024 to conduct the 2023-2024 federal improper payments review. The real-time review resumed in November 2025 (it had been noted during the 2023-2024 federal improper payments review cycle that despite the processes that have been implemented eligibility staff were still making errors with calculation of income resulting in incorrect family fees). To strengthen internal controls over the Care 4 Kids program eligibility verification process, identify error trends, and to ensure compliance with all federal and state regulations, the contractor has its own internal QA process; however, the OEC has added real time case reviews and an ongoing second layer monthly review to this process. The following corrective action measures have been approved and implemented by the OEC to better identify, prevent, and remedy these errors: 1. The QA Team uses a randomizer to select 10 cases completed by the Eligibility Service Specialists in the last 30 days. These cases consist of applications, redeterminations and supporting documents. The data elements reviewed focus on income and family fee calculation to identify error trends. The error trends are tracked and a quarterly report submitted to the OEC. The quarterly reports will identify the reasons for the errors, which will inform tools that can be made readily available to mitigate the errors, and provide more frequent staff training. 2. The QA Team reviews 13 sample cases from Report 823 (ACF Improper Payment Report), the similar process of the Federal Improper Payment review.”
Allowable Costs/Cost Principles – Cost Allocation Plan – Allocation Statistics Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Program Name: Children’s Health Insurance Program (CHIP) (Assistance Listing 93.767) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2305CT3002 and 2405CT5021 Program Name: State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) (Assistance Listing 10.561) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: Various Background The Department of Social Services (DSS) administrative costs are allocable to federal and state programs as specified in the DSS federally approved cost allocation plan (CAP). DSS allocates administrative costs to programs based on allocation statistics. Most allocation statistics are based on the number of staff hours spent supporting programs DSS administers. CAP Schedule .4 details the administrative cost allocations and the applicable allocation statistics. Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200.405(a) states that costs are allocable to a federal award or other cost objective if the cost is assignable to that federal award or cost objective in accordance with relative benefits received. Title 45 CFR Part 95.507 requires a state's CAP to contain procedures used to identify, measure, and allocate all costs to each of the programs operated by the state agency. Condition Our review of the Schedule .4 and supporting data for the quarter ended March 31, 2025, disclosed that DSS did not accurately allocate quality control unit costs to three federal awards. Federal Award Error Amount Medicaid Understated $ 48,461 Children’s Health Insurance Program (CHIP) Overstated 114,533 Supplemental Nutrition Assistance Program (SNAP) Understated 66,072 Total Error $ 229,066 Context The department’s quality control unit ensures fiscal and programmatic integrity of DSS programs including payment error rate measurement reviews. DSS incurred $4,271,925 in administrative costs for the quality control and payment error rate measurement unit during the fiscal year ended June 30, 2025. The sample was not statistically valid. Questioned Costs We computed questioned costs of $74,446 in CHIP funds by applying the applicable federal financial participation rate to the unallowed expenditures. Effect DSS received excess federal reimbursement for CHIP and underclaimed federal reimbursement for Medicaid and the Supplemental Nutrition Assistance Program. Cause Clerical errors went unnoticed during the supervisory review process. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should strengthen internal controls to ensure that it allocates costs to the appropriate federal award in accordance with federal regulations. The Department of Social Services should return federal reimbursements for unallowable costs that it claimed to Children’s Health Insurance Program federal awards. Views of Responsible Officials “The Department agrees with this finding. The Department will review internal controls to identify possible corrective actions.”
Eligibility Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Criteria Title 42 U.S. Code of Federal Regulations (CFR) Part 435.603 requires the state Medicaid agency to determine a household’s financial eligibility for Medicaid based on the sum of the modified adjusted gross income (MAGI) of every individual in the household. Title 42 United States Code Section 1396b(v) provides that aliens who meet certain requirements are eligible for Medicaid only if such care and services are necessary for the treatment of an emergency medical condition. Title 2 CFR Part 200.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The CFR requires the non-federal entity to take prompt action when it identifies instances of noncompliance, including noncompliance identified in audit findings. Condition We reviewed 60 Medicaid cases to determine if the Department of Social Services (DSS) properly granted eligibility. Our review included 40 MAGI cases totaling $12,386, of which $6,367 was federally reimbursed and 20 non-MAGI cases totaling $41,480, of which $21,029 was federally reimbursed. Our review disclosed that DSS granted Medicaid eligibility to one MAGI recipient upon denial of their renewal application in June 2023. DSS improperly continued eligibility for 30 months until notification of our review. DSS paid $7 in Medicaid benefits for the selected claim. Furthermore, our review disclosed that DSS paid an additional $10,587 in Medicaid benefits for the ineligible recipient during fiscal year 2025. We reviewed the status of prior audit findings to determine if DSS took appropriate steps to resolve and prevent identified conditions. Our review of 18 non-qualified aliens who received non-emergency medical services in prior audits disclosed that DSS issued $12,443 in payments for non-emergency medical services provided to one non-qualified alien who was ineligible to receive services in fiscal year 2025. Context DSS provided us with a detailed listing of fee-for-service benefit payments issued during the fiscal year ended June 30, 2025. We stratified the data into two eligibility determination groups based on MAGI and non-MAGI determinations (e.g., Aged, Blind and Disabled). During the fiscal year ended June 30, 2025, DSS issued $5,978,762,480 in payments on behalf of 2,379,288 MAGI recipients and received $3,038,953,956 in federal reimbursement. In addition, DSS issued $5,158,976,619 in payments on behalf of 772,464 non-MAGI recipients and received $2,598,909,828 in federal reimbursement. We further stratified the payment data for recipients without a Social Security number who were over three years old. DSS issued $91,099,447 in payments on behalf of 20,125 MAGI recipients and received $46,371,061 in federal reimbursement. In addition, DSS issued $36,001,833 in payments on behalf of 7,812 non-MAGI recipients and received $18,046,253 in federal reimbursement. Of these 27,937 recipients, we could not determine the number of non-qualified aliens without reviewing each case. The samples were not statistically valid. Questioned Costs We computed $11,518 in questioned costs by applying the applicable federal financial participation rate to the benefit payments associated with the ineligible recipients. Effect DSS received federal reimbursement for unallowed expenditures. Cause DSS implemented system overrides during COVID-19 that prevented case closure for recipients determined ineligible after the pandemic. DSS eligibility workers granted eligibility to a non-qualified alien without proper documentation or authority. Prior Audit Finding We previously reported this as finding 2024-012. Recommendation The Department of Social Services should strengthen internal controls to ensure that only eligible recipients receive Medicaid services in accordance with federal laws and the Medicaid State Plan. Views of Responsible Officials “The Department agrees with this finding. The Department identified cases where overrides that were applied during the public health emergency were not removed. This resulted in individuals remaining enrolled inappropriately. Our Business Systems Division is implementing a tiered resolution approach, beginning with individuals enrolled in the Medicare Savings Program and HUSKY-C coverage. Please note: The Department will not be returning the questioned costs associated with this finding. According to federal regulations, recoveries based on eligibility errors can only be pursued when identified by programs operating under CMS’ Payment Error Rate Measurement program, per section 1903(u) of the Social Security Act and regulations at Title 42 CFR Part 431, Subpart Q.”
Financial Reporting Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Program Name: Children’s Health Insurance Program (CHIP) (Assistance Listing 93.767) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2305CT3002 and 2405CT5021 Background The Department of Revenue Services (DRS) collects healthcare related taxes and summarizes revenues. The Department of Social Services (DSS) records healthcare related tax revenues on Medicaid federal financial reports. Criteria Title 42 U.S. Code of Federal Regulations (CFR) Part 430.30 requires the state to submit the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program (Form CMS 64) to the Centers for Medicare and Medicaid Services (CMS). Form CMS 64 is the state's accounting of actual recorded Medicaid expenditures. Title 42 CFR Part 431.1002(a) requires states to return the federal share of Medicaid overpayments to CMS in accordance with Section 1903(d)(2) of the Social Security Act and related regulations included in Title 42 CFR Part 433 Subpart F. Part 433.320 requires the state to return the federal share of Medicaid overpayments that are subject to recovery to CMS through a credit on Form CMS 64. Title 42 CFR Part 457.630(c) requires the state to submit the Quarterly Statement of Expenditures for CHIP (Form CMS 21) to CMS. Form CMS 21 is the state's accounting of actual recorded CHIP expenditures. Title 42 CFR Part 431.1002(b) requires states to return to CMS the federal share of CHIP overpayments in accordance with Section 2105(e) of the Social Security Act and related regulations included in Title 42 CFR Part 457 Subpart B. Part 457.232 requires the state to return the federal share of CHIP overpayments that are subject to recovery to CMS through a reduction on Form CMS 21. Title 45 CFR Part 75.303 requires the non-federal entity to establish and maintain effective internal control over the federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The CFR requires the non-federal entity to take prompt action when it identifies instances of noncompliance, including noncompliance identified in audit findings. Title 42 (CFR) Part 433.74 requires each state to submit to CMS quarterly summary information on healthcare related taxes collected. State reports must be complete and accurate. Condition 1. DSS understated non-disproportionate share hospital supplemental payments by $35,091 on Line 8 of the CMS 64 Financial Report for the quarter ended December 31, 2024. 2. DSS reported $3,563 in provider overpayments identified through recovery audit contractor (RAC) audits as Collections on Line 9D of the CMS-64 Financial Report for the quarter ended June 30, 2025. DSS should have netted the $2,385 in paid RAC contingency fees to the recovered provider overpayments and reported $1,178 in RAC Collections on Line 9E. 3. DSS accounted for the return of the federal share of CHIP and state funded medical assistance program overpayments to CMS on the CMS 64 Financial Report. DSS should have accounted for the return of CHIP overpayments on the CMS 21 Financial Report which includes a higher federal financial participation rate. Furthermore, DSS should have returned state funded overpayments to the state’s General Fund. 4. DSS did not include previously reported overpayments to providers certified as bankrupt or out of business when it reported total overpayment adjustment amounts on Line 10C of the CMS 64 Financial Report. 5. DSS overstated healthcare related fees by $648,723 for the quarter ended December 31, 2024, and understated healthcare related taxes by $5,448 for the quarter ended September 30, 2024, on the CMS 64 Financial Report. Context The amount on Line 8 of the CMS 64 Financial Report is the summary of Medicaid other expenditures. DSS reported $443,431,530 on Line 8 for the fiscal year ended June 30, 2025. The department’s Medicaid recovery audit contractor conducted four complex dental audits and identified $40,586 in overpayments during the fiscal year ended June 30, 2025. The Recoveries on Line 9C1 of the CMS 64 Financial Report identifies fraud, waste, and abuse recoveries credited from Medicaid program integrity activities, such as quality assurance audits of medical providers. DSS reported recoveries of $4,667,752 during the fiscal year ended June 30, 2025. In our review of 15 medical provider audits, we noted that the Office of Quality Assurance issued final audit reports with $1,264,692 in overpayments. DSS audited transactions paid with Medicaid, CHIP, and state funded medical assistance program funds. Six of the provider audits included reviews of non-Medicaid transactions. Two of these provider audits contained non-Medicaid exceptions that a statistician extrapolated to determine the amount of overpayment. The Overpayment Adjustment on Line 10C of the CMS 64 Financial Report is a calculation of total current Medicaid receivables net of prior quarter’s Medicaid receivables and any deduction for write-off of previously reported overpayments to providers certified as bankrupt or out of business. In prior audits, we reported that the department’s Medicaid receivable balances were inconsistent and not fully supported from one quarter to another. DSS duplicated write-offs, reported write-offs in different quarters, and presented them in one quarter but not the others. The department stopped including previously reported overpayments to bankrupt or closed providers until it addresses the condition from prior audit findings. DSS recorded $907,407,365 in revenue from healthcare related taxes, fees, and assessments during the fiscal year ended June 30, 2025. The samples were not statistically valid. Questioned Costs Due to the department’s lack of procedures to stratify overpayments by applicable federal and state programs, we cannot determine questioned costs for condition #3. There were no questioned costs for the remaining conditions. Effect Inaccurate federal financial reports could affect the budgeting and federal grant awarding process. The State of Connecticut is not receiving its share of medical provider overpayments. CMS could not analyze the effectiveness of the recovery audit contractor program. Cause Clerical errors went unnoticed during the supervisory review process. The quarter ended June 30, 2025, was the first time DSS reported contingency fees and Medicaid RAC overpayment collections on the CMS 64 Financial Report. DSS does not stratify medical provider audit overpayments by program. The department tracks, reports, and refunds CHIP and state funded medical assistance program overpayments as Medicaid overpayments. DSS informed us that multiple issues caused the conditions in Medicaid receivables and write-offs. The department has not developed a solution. Prior Audit Finding We previously reported this as finding 2024-013 and in 19 prior audits. Recommendation The Department of Social Services should strengthen internal controls to ensure that it accurately reports and adequately reviews revenues, expenditures, collections, and contingency fees prior to submitting Form CMS 64. The Department of Social Services should strengthen internal controls to ensure that it tracks, reports, and returns the federal share of overpayments to corresponding federal and state medical assistance programs. The Department of Social Services should resolve the issues affecting the Medicaid receivable balances and file the proper adjustment to correct the errors, unsupported amounts, and corresponding federal reimbursements on Form CMS 64. Views of Responsible Officials “The Department agrees with this finding. The Department will review internal controls to identify possible corrective actions.”
Special Tests and Provisions – Long-Term Care Facility Audits Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Background The Department of Social Services (DSS) contracts with a public accounting firm to perform field audits and desk reviews of long-term care facilities (LTCF). DSS and the public accounting firm develop an annual plan of LTCF field audits based on risk stratification. The plan requires them to perform field audits of low-risk LTCF at least every four years. Criteria Title 42 U.S. Code of Federal Regulations Part 447.253 requires that the state Medicaid agency pay for long-term care facility services using rates that are reasonable and adequate to meet the costs incurred by efficiently and economically operated providers. The state Medicaid agency must provide for the filing of uniform cost reports for each participating provider. The state uses these cost reports to establish payment rates. The state Medicaid agency must provide for the periodic audit of financial and statistical records of participating providers. The State Medicaid Plan should establish the specific audit requirements. The LTCF audit requirements provide that DSS must determine the established per diem LTCF payment rate by a desk review of the submitted annual report, which field auditors must subsequently verify and authenticate using procedures approved by the United States Department of Health and Human Services. Generally, the accounting firm should conduct biennial audits of the facilities. This audit cycle may change based on audit experience. Condition Our review of 15 LTCF field audits disclosed that DSS did not perform two biennial field audits. DSS had not audited one facility in eight years and seven months and one facility in ten years and nine months. Context During the fiscal year ended June 30, 2025, the state had 250 LTCF that provided services to Medicaid clients. A public accounting firm performed 45 LTCF field audits for DSS. The sample was not statistically valid. Questioned Costs $0 Effect DSS has reduced assurance that it uses appropriate rates to pay for LTCF services. Cause The department informed us that it operated with limited resources. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should comply with the long-term care facility auditing procedures in the State Medicaid Plan. Views of Responsible Officials “The Department agrees with this finding. With more than 1,200 long-term care and boarding home providers, the Department is unable to audit every facility on a biennial basis. Facilities are primarily chosen for audit based on the risk of misstatement. The Department operates with limited resources and while it is neither possible nor feasible to conduct a field examination for every facility, the benefit of utilizing the desk review process must be considered when discussing the risk of incorrect payments. The Department ensures that a desk review is conducted on each facility's cost report annually. During the desk review process the auditors submit requests to providers for additional information to resolve questions which arise from significant risk areas identified and follow up on prior year findings. These procedures are conducted to mitigate and reduce the risk of incorrect payments.” Auditors’ Concluding Comments The department should comply with the audit requirements of the State Medicaid Plan for long-term care facilities or amend the state plan to an appropriate audit frequency.
Special Tests and Provisions – Provider Health and Safety Standards Program Names: State Survey and Certification of Health Care Providers and Suppliers (Medicare, Title XVIII) (Assistance Listing 93.777) COVID-19 Medicaid Assistance Program (Medicaid, Title XIX) Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Background The Department of Social Services (DSS) is the designated single state agency to administer the Medicaid program in accordance with Title 42 U.S. Code of Federal Regulations (CFR) Part 431. Connecticut administered certain aspects of the Medicaid program through several state agencies including the Department of Public Health (DPH) as the state survey agency. The Automated Survey Processing Environment (ASPEN) Complaints and Incidents Tracking System tracks, processes, and reports on complaints and incidents against healthcare providers and suppliers regulated by the Centers for Medicare and Medicaid Services (CMS). The system manages all processes from intake and investigation through final disposition. Criteria Title 42 CFR Part 488.308 requires a survey process of skilled nursing and intermediate care facilities to assess whether they provide adequate quality of care to clients as intended by law and regulations. The state survey agency must conduct a survey no later than 15 months after the last day of the previous survey. Facilities must meet certain federal requirements to participate in Medicare and Medicaid programs. Section 7316 of the CMS State Operations Manual requires the state survey agency to forward a letter and Form CMS-2567, Statement of Deficiencies and Plan of Correction, within ten working days after the last day of the survey. The letter notifies the facility of cited deficiencies, compliance expectations, plan of correction requirements, and possible civil money penalties and/or denial of payment for new admissions. Section 7317 of the CMS State Operations Manual requires the state survey agency to conduct an onsite revisit when a facility’s survey finds deficiencies that constitute substandard quality of care, harm, or immediate jeopardy. The revisit should occur between the last correction date on the plan of correction and 60 days from the survey date. Section 5075.9 of the CMS State Operations Manual requires an onsite investigation within 45 calendar days of receipt of a non-immediate jeopardy medium priority (NIJ-M) complaint or incident. Condition Our review of survey documentation for 25 facilities disclosed the following: • DPH conducted recertification surveys for 16 facilities between four and 17 months late. • DPH sent a notification letter and Form CMS-2567 to 17 facilities between one and 31 days late. • DPH conducted follow-up visits at 12 facilities between two and 232 days late. Our review of 15 investigations for NIJ-M complaints or incidents disclosed that DPH did not initiate three surveys for complaints or incidents reported on July 8, 2024, through March 7, 2025. Context The state paid 283 facilities $1,578,896,064 for medical services during the fiscal year ended June 30, 2025. DPH received 3,857 complaints and incidents against facilities during the fiscal year ended June 30, 2025. The samples were not statistically valid. Questioned Costs $0 Effect The health and safety of nursing home residents may be at risk. Cause Staffing levels, volume of findings, and other time-sensitive activities requiring DPH response impacted the timing of survey activities. This included preparing for planned labor actions in facilities. It is not uncommon for a survey to have ten or more deficiencies, which takes time to process. Prior Audit Finding We previously reported this as finding 2024-017 and in one prior audit. Recommendation The Department of Public Health should strengthen internal controls to ensure compliance with federal Medicare and Medicaid survey requirements. Views of Responsible Officials Response provided by the Department of Public Health: “DPH agrees with this finding. While the interval between recertification surveys exceeded the 15.9-month interval at 16 facilities, each of these facilities were surveyed during the period for other reasons (e.g. complaint surveys, follow-ups, monitoring visit and/ or focused infection control survey). Recertification survey activity slowed during the transition to a new database in 2025 and during preparations for strike monitoring. Currently, approximately 80% of facilities have had a recertification survey within 15.9 months, although almost all facilities with an overdue recertification survey have been surveyed for other reasons (e.g. complaints). DPH has surveyed 99% of facilities within this timeframe, even if it was not a recertification survey. Previously, DPH hired another supervisor to support the creation of an additional team to perform recertification surveys. Subsequent vacancies and leaves of absence impacted the ability to consistently staff and support another team and to perform timely follow-ups. The current vacancy rate across provider types is approximately 10% and DPH is actively training and recruiting additional surveyors. The mandatory training and certification process requires approximately six months of training before a surveyor can sit for the required federal certification exam. As with other professions, it can take several more months for surveyors to build additional skill and competency through experience. Surveys continue to have a high number of deficiencies and serious findings requiring increased time to review and send out survey findings. Each survey finding is reviewed by a trained supervisor, who also participates in surveys and provides on-site staff supervision and support. The Facility Licensing and Investigations Section (FLIS) receives a large volume of complaints and previously reorganized to address the most serious complaints and hired a complaint manager. FLIS continues to investigate Immediate Jeopardy (IJ) and non-IJ high priority complaints on time. During this period FLIS utilized Temporary Worker Retirees who assisted with complaints and implemented a complaint project. Through the complaint project, which is ongoing, FLIS has been able to investigate approximately 300 additional nursing home complaints. Previously, FLIS reorganized to enhance the tracking of follow up surveys. In addition to conducting follow ups for substandard quality of care, harm, or immediate jeopardy level deficiencies, DPH conducts follow-up surveys for all findings where CMS requires a plan of correction be submitted. Additionally, in cases where there is immediate jeopardy, facilities must implement a plan to address the jeopardy situation, which is verified by DPH staff prior to the follow-up survey. DPH planned to outsource portions of the complaint work, but the agency received a challenge from labor unions, stating that complaint investigations are “bargaining unit work”. DPH also considered using the state contracting board but aborted this option for similar reasons. In lieu of outsourcing, DPH attempted to catch up by authorizing overtime for complaint investigations, but FLIS was still unable to keep up with the demand.” Response provided by the Department of Social Services: “The Department agrees with this finding and the response provided by the Department of Public Health.”
Special Tests and Provisions – Medicaid Recovery Audit Contractor Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Criteria Title 42 U.S. Code of Federal Regulations Part 455 Subpart F provides for the establishment of a recovery audit contractor program to promote integrity of the Medicaid program. States must enter a contract with a recovery audit contractor to identify overpayments and underpayments and recoup overpayments. States must determine the contingency fee paid to the contractor based on a percentage of the overpayment recovered. The state must only pay contingency fees from overpayment amounts recovered. The state must determine at what stage in the audit process, after it recovered an overpayment, that the state will pay the contractor the contingency fees. Federal reimbursement is not available for contingency fees paid to the contractor. Condition Our review of the department’s Medicaid recovery audit contract disclosed that it obligated DSS to pay contingency fees based on the overpayment amounts identified in the contractor’s final audit report rather than the overpayment amounts recovered. Context The department’s Medicaid recovery audit contractor conducted four complex dental audits and identified $40,586 in overpayments during the fiscal year ended June 30, 2025. The sample was not statistically valid. Questioned Costs $0 Effect DSS could experience a loss of funds by paying the contractor contingency fees prior to recovery of medical provider overpayments. Cause DSS structured the timing of the contingency fee payment and collection of overpayments like other Medicaid integrity programs. DSS paid contingency fees through the contractor’s monthly billing invoice. DSS collected overpayments from medical providers through a single payment or payment plan. Prior Audit Finding We have not previously reported this finding. Recommendation The Department of Social Services should amend the contract with its Medicaid recovery audit contractor to comply with federal regulations. Views of Responsible Officials “The Department agrees with this finding. The Department will review the payment methodology at the next contract renewal.”
Special Tests and Provisions – Controls Over Income and Eligibility Verification System Related to Date of Death Matches Program Names: COVID-19 Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Medical Assistance Program (Medicaid, Title XIX) (Assistance Listing 93.778) Federal Award Agency: United States Department of Health and Human Services Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: 2405CT5MAP and 2505CT5MAP Program Name: Supplemental Nutrition Assistance Program (SNAP) (Assistance Listing 10.551) Federal Award Agency: United States Department of Agriculture Award Years: Federal Fiscal Years 2024 and 2025 Federal Award Numbers: Various Criteria Title 42 United States Code Section 1320b-7 requires that the state have an Income and Eligibility Verification System (IEVS) in effect for the Medicaid and SNAP programs. The IEVS matches Department of Labor wage information, Social Security Administration wage and date of death files, and Internal Revenue Services unearned income files. Title 7 U.S. Code of Federal Regulations Part 273.12(c)(3)(iii) requires a state that receives match information from a deceased matching system to follow up with the SNAP household with a notice of match results. If the household fails to respond to the notice or refuses to provide sufficient information, the state must remove the individual and their income from the household and adjust benefits accordingly. Condition The Department of Social Services (DSS) did not sufficiently review Income and Eligibility Verification System alerts related to client date of death for the Medicaid and SNAP programs. Our review of 25 alerts generated from a State Data Exchange report of client death dates disclosed nine exceptions. DSS did not record the date of death for five client cases, did not close four client cases, and did not recoup $8,147 in overpayments for nine client cases. This included $564 in Medicaid and $7,583 in SNAP benefits issued in the fiscal year ended June 30, 2025. For four single-member household SNAP clients, we noted that unauthorized persons used $6,015 of the deceased client’s SNAP benefits after the client’s death. Context During the fiscal year ended June 30, 2025, DSS received 1,329 IEVS alerts related to client date of death matches for Medicaid and SNAP. As of July 10, 2025, eligibility workers processed 998 alerts, and the ImpaCT system processed 171 alerts. DSS assigned each alert to a specific due date generated by the ImpaCT system that ranged from July 11, 2024, to June 28, 2025. The sample was not statistically valid. Questioned Costs We computed $7,865 in questioned costs by applying the related federal financial participation rate to benefit payments associated with ineligible clients. These questioned costs included $282 in Medicaid and $7,583 in SNAP funds for the fiscal year ended June 30, 2025. Effect DSS paid benefits that clients were not eligible to receive. Deceased client cases remained open, which created opportunities for medical providers and other unauthorized persons to misuse their Medicaid and SNAP benefits. Cause DSS designed the ImpaCT system to mark IEVS alerts as complete when the department does not address them within a predetermined number of days. DSS lacked access to state death data for its staff to promptly verify and match dates of death. Prior Audit Finding We previously reported this as finding 2024-018 and in 28 prior audits. Recommendation The Department of Social Services should provide the necessary resources and institute procedures to ensure that it uses all information from eligibility, income, and death matches to ensure that it correctly issues benefits to or on behalf of eligible clients. DSS should return federal reimbursements for unallowable expenditures claimed under Medicaid and SNAP. Views of Responsible Officials “The Department agrees with this finding. DSS staff is in the development phase of implementing new automated procedures to ensure timely and accurate action is taken to discontinue benefits of deceased clients when date of death information is received and matched to the Connecticut Department of Public Health’s State Vital Records Office. Action has been taken to correct the errors cited, including discontinuing the benefits of the individuals that were verified as deceased, and recouping the overpayments as appropriate.”