2025-006 – Inadequate Controls Related to Summer EBT Program for Children Reporting State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 202424N117546, 202525N117546 Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Department of Children and Family Services (DCFS) did not ensure that controls were in place requiring a documented review of Summer Electronic Benefit Transfer (EBT) Program for Children monthly FNS-46 and FNS-388 reports prior to submission to United States Department of Agriculture - Food and Nutrition Service (FNS). For each of the 12 monthly reports for both FNS-46 and FNS-388 for fiscal year 2025, there was no evidence of review prior to submission to FNS. Criteria: 2 CFR 200.303(a) requires that recipients of federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: DCFS did not have a policy in place to document approval of Summer EBT Program for Children federal reports prior to submission. DCFS represented that a staff member, other than the person who submitted the report, performed a review for accuracy prior to the report being submitted. However, management was unable to provide evidence of the review. Effect: Although no exceptions were noted in the reports reviewed, failure to establish controls that include a documented review over data submissions to FNS could result in inaccurate information being included in the Summer EBT Program for Children reports. Recommendation: DCFS should document and maintain internal controls requiring evidence that monthly FNS-46 and FNS-388 reports are reviewed prior to submitting the reports to the federal agency. Management’s Response and Corrective Action Plan: Management concurred in part with the finding and provided a corrective action plan (B-10).
2025-007 – Inadequate Controls over Credit Cards and Bank Accounts State Entity: Road Home Corporation D/B/A Louisiana Land Trust (LLT) Award Years: 2006, 2008, 2013, 2016, 2018 Award Numbers: B-06-DG-22-0001, B-06-DG-22-0002, B-08-DG-22-0003, B-13-DS-22-0002, B-16-DL-22-0001, B-18-DP-22-0001 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Road Home Corporation d/b/a Louisiana Land Trust (LLT) does not have adequate controls in place to ensure that LLT credit card transactions and bank accounts are properly monitored and comply with its own policies and federal program regulations, increasing the risk of theft and fraud. In a review of credit card statements between April 2023 and July 2024, we noted the following: • In May 2023, there was a $110 charge to the credit card assigned to an employee whose employment ended with LLT in December 2016. • Between July 2023 and October 2023, $12,166 in charges were made to the credit card assigned to LLT’s Chief Financial Officer (CFO), of which $9,255 appeared to be non-business related. We found that the CFO concealed certain charges from the auditors and from the Office of Community Development-Disaster Recovery (OCD-DR), who LLT submits its reimbursement requests to. Other charges were marked as disputed; however, the CFO could not provide evidence of the dispute with the bank. After auditors informed LLT management of the apparent credit card misuse and requested LLTs original bank statements for fiscal year 2024, LLT management conducted a separate review of the statements between May 2021 and May 2025 and noted that the LLT CFO had concealed $162,210 in deposits and made unauthorized withdrawals totaling the same amount. The sources of the deposits included payments for mineral rights held by LLT, refunds from insurance and utility companies, and refunds of property taxes, all of which should have been recorded as revenues and/or a reduction of expenses and considered program income to the applicable grant program. LLT’s activities are exclusively supported by federal funds appropriated to the U.S. Department of Housing and Urban Development, from whom LLT receives grant funding for disaster recovery and sustainability programs through OCD-DR. The funds were associated with properties owned by LLT that had previously been acquired with federal grant funds. Criteria: Good internal control includes ensuring that accurate records are maintained to reconcile monthly credit card and bank statements. LLT’s credit card policy provides that credit cards may be used for Community Development Block Grant approved expenses and are not for personal use. LLT’s policy also requires the cardholder to reconcile purchases made during the monthly billing cycle by matching the purchases listed on the statement to actual receipts. The documentation must then be reviewed by the cardholder’s supervisor. LLT’s bank reconciliation policy provides that at the end of each month, the accounting specialist will be responsible for obtaining a month-end bank statement for each account used by LLT and reconciling it to the general ledger. Cause: Management is not ensuring its policies are followed. Effect: There is an increased risk of theft and fraud. Recommendation: Management should ensure established policies and procedures are followed, including segregation of duties, to ensure that LLT credit card transactions and bank accounts are properly monitored and comply with its own policies and program regulations. Management should pursue recoupment of misappropriated funds and continue to work with OCD-DR and the U.S. Department of Housing and Urban Development for the return of those funds to the federal grantor agency. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a corrective action plan (B-48).
2025-008 – Noncompliance and Control Weakness Over GEAR UP Scholarships State Entity: Student Tuition Assistance and Revenue Trust (START) Program Award Years: 2002–2015 Award Number: Unknown Compliance Requirement: Period of Performance Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Student Tuition Assistance and Revenue Trust (START) program currently maintains 3,266 START accounts totaling $2,668,155 that were originally created with scholarship funds awarded under the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) federal program, with no mechanism to ensure compliance with federal regulations over the redistribution and/or return of these scholarship funds that have gone unused by the scholarship recipient (account beneficiary) within the prescribed number of years. Criteria: Per 34 CFR 694.16, funds held in reserve that are not used by an eligible student within six years of the student's scheduled completion of secondary school may be redistributed by the grantee to other eligible students; however, any scholarship funds that are not used by eligible students within six years of the students’ scheduled completion of secondary school and not redistributed by the grantee to other eligible students, must be returned to the federal grantor within 45 days after the six-year period for expending the scholarship funds expires. Cause: START currently has no written policies or procedures in place to monitor or track the account beneficiary’s completion of secondary school, when a beneficiary’s funds become eligible for redistribution to other eligible students, or when the unused funds are required to be returned to the federal grantor. START relies on the account beneficiary to inform START if they are not going to use the funds in the account before START personnel redistribute the funds to the remaining active accounts. Effect: Noncompliance with program requirements has resulted in questioned costs totaling $2,668,155 that may need to be returned to the federal grantor. Recommendation: START should develop written policies and procedures in accordance with federal regulations and provide additional training to staff over the monitoring of account beneficiary’s completion of secondary school and status after secondary school to ensure compliance with federal regulations for the redistribution and/or return of GEAR UP funds. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-49).
2025-002 – Control Weakness and Noncompliance Related to Cost Allocation Process State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LATANF, 2501LATANF, SNAP - Letter of Credit Compliance Requirement: Allowable Costs/Cost Principles Repeat Finding: Yes (Prior Year Finding Nos. 2024-003, 2023-003) See Schedule of Findings and Questioned Costs for chart/table. Condition: The Department of Children and Family Services (DCFS) did not have adequate controls in place to ensure the correct allocation of expenditures in accordance with the Cost Allocation Plan (CAP), which assigns costs to federal programs. In a nonstatistical sample of 60 cost allocation forms out of a population of 1,019 forms, five (8%) forms either did not agree to supporting documentation, used the incorrect grant number, or used a federal program that was not included in the CAP, which resulted in the incorrect allocation of costs to various cost pools affecting multiple federal programs. These errors resulted in overbilling the Temporary Assistance for Needy Families program (TANF) by $19 and the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (SNAP) by $625. The amounts overbilled represent questioned costs. In addition, the following programs were underbilled: TANF by $312, Child Support Services by $937, and SNAP by $19. Criteria: 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Per 2 CFR 200.400(d), the accounting practices of the non-federal entity must be consistent with cost principles and support the accumulation of costs, as required, and must provide for adequate documentation to support costs charged to the federal award. Cause: These errors occurred because there was not an effective review process in place to identify amounts being charged incorrectly through the cost allocation process. Effect: Failure to adequately review cost allocation supporting documentation increases the risk that unallowable costs could be charged to federal programs. This is the third consecutive year we have reported to DCFS management exceptions with internal controls related to the cost allocation process. Recommendation: Management should strengthen internal controls over the cost allocation review process. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-6).
2025-011 – Control Weakness over Temporary Assistance for Needy Families Requirements State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LATANF, 2501LATANF Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: Department of Children and Family Services (DCFS) did not ensure that accurate and complete information was entered into the Louisiana Integrated Eligibility Project (LITE) system, which is used to determine if the applicant for TANF cash assistance is financially needy and determines the amount of eligible benefit. In a statistical sample of 40 out of 59,674 TANF - Family Independence Temporary Assistance Program and TANF - Kinship Care Subsidy Program cash assistance payments totaling $33,001,868, two (5%) recipient’s income calculation either did not include amounts from check stubs or did not include the Social Security income of all members of the household. Criteria: Per 45 CFR 260.20(a) one of the four purposes of the TANF program is to provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives. 45 CFR 263.2(b)(3) states that an “eligible family” must be financially eligible according to the appropriate income and resource (when applicable) standards established by the state and contained in its TANF plan. 2 CFR 200.303(a) requires that the recipient and subrecipient of federal awards establish, document, and maintain effective internal control that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: DCFS employees did not ensure all information needed to validate the applicant’s eligibility and determine financial need was included in the LITE system prior to providing financial assistance. Effect: Although these exceptions did not result in incorrect payments, it increases the risk that applicants may receive benefits to which they are not entitled and could result in DCFS having to repay the funds to the federal grantor. Recommendation: DCFS management should strengthen controls to ensure accurate and complete information is entered into LITE to support that financially needy families receive the TANF cash assistance as allowed by federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-8).
2025-012 – Noncompliance and Control Weakness over Temporary Assistance for Needy Families Child Support Cooperation Requirements State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LATANF, 2501LATANF Compliance Requirement: Special Tests and Provisions Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not timely and appropriately sanction individuals receiving TANF cash assistance payments for child support due to non-cooperation related to establishing paternity, or related to establishing, modifying, or enforcing a support order. In a nonstatistical sample of 40 cases out of a population of 577 cases referred to TANF caseworkers by the DCFS Child Support Enforcement (CSE) Division for non-cooperation, nine (23%) cases were put on hold (sanctioned) between six and 72 days after the date required by DCFS policy. For six of the nine cases, the client’s TANF cash assistance benefits were not denied, as required by federal regulations, for at least one month after the case was referred to a TANF caseworker. For these six cases, $3,116 in benefits were issued, which we consider to be questioned costs. Criteria: Based on 45 CFR 264.30(b) and (c), if CSE determines that an individual is not cooperating with child support enforcement requirements, and the individual does not qualify for a good cause or other exception, then CSE must notify the TANF caseworkers. The TANF caseworkers must then take appropriate action by deducting from the assistance an amount equal to not less than 25% of the amount of such assistance; or deny the family any assistance under the program. Based on 45 CFR 264.31(a), if the TANF caseworkers did not enforce the penalties against recipients required under 45 CFR 264.30(c), the federal grantor could impose a penalty on the state of not less than 1% and not more than 5% of the adjusted State Family Assistance Grant, which is a portion of TANF. DCFS policy requires analysts, within 10 days of receiving documentation of failure to cooperate with CSE, to send cash assistance clients notice of noncooperation. This notice will inform the client that their case will be closed upon expiration of the 13-day notice period unless the client ends their failure to comply prior to that time. Cause: TANF caseworkers did not ensure that individuals who had been reported as noncompliant by CSE were sanctioned timely or denied TANF benefits, if appropriate. Effect: Noncompliance with CSE cooperation requirements could result in penalties assessed on the state by the federal grantor. Recommendation: Management should strengthen internal controls to ensure compliance with CSE requirements, including timely sanctions and denial of assistance, as appropriate. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-12).
2025-014 – Noncompliance and Control Weakness Related to the Temporary Assistance for Needy Families Work Verification Plan State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LATANF, 2501LATANF Compliance Requirement: Special Tests and Provisions Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not ensure that all work activity supporting documentation for cash assistance recipients was accurate and maintained for hours worked under the TANF program. In a nonstatistical sample of 60 out of 41,893 work activity records in the job-tracking system for approximately 2,300 clients per month, seven (12%) work-eligible participant’s hours either did not agree to supporting documentation, or supporting documentation of work activities was not maintained, as required by federal regulations. Criteria: Per 45 CFR 261.61(a), a state must support each individual’s hours of participation through documentation in accordance with its Work Verification Plan. 45 CFR 261.10(a)(1) states, in part, a parent or caretaker receiving assistance must engage in work activities when the state has determined that the individual is ready to engage in work. Per 45 CFR 261.65(a)(2) and 45 CFR 262.1(a)(15), if determined that the state has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates, the federal grantor could impose a penalty to the state of not less than 1% and not more than 5% of the adjusted State Family Assistance Grant. Cause: DCFS employees did not adhere to requirements in the state’s work verification plan pertaining to maintaining and verifying supporting documentation for the hours worked by participants. Effect: This is the fourteenth consecutive year we have reported to DCFS management exceptions with internal controls and compliance related to this TANF requirement. Noncompliance could result in penalties assessed to the state by the federal grantor. Recommendation: DCFS management should ensure DCFS employees comply with existing policies and procedures regarding the state’s work verification plan. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-16).
2025-013 – Noncompliance and Control Weakness Related to Subrecipient Monitoring Requirements State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LAFOST, 2401LATANF, 2501LAFOST, 2501LATANF Compliance Requirement: Subrecipient Monitoring Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not have adequate controls in place to ensure compliance with subrecipient monitoring requirements related to the TANF and Foster Care Title IV-E (Foster Care) programs. In a statistical sample of 38 TANF subrecipient payments from a population of 482 TANF subrecipient payments totaling $67,022,221, 29 (76%) payments made under 11 subrecipient agreements did not identify award information including federal award number, name of federal agency, and assistance listing title and number, as required by federal regulations. In addition, two of the 11 agreements did not state how DCFS would monitor the subrecipients, although reviews of financial and performance reports as well as site visits were performed. In a statistical sample of 16 Foster Care subrecipient payments from a population of 171 Foster Care subrecipient payments totaling $22,349,520, seven (44%) payments were made under four contracts that did not identify award information including federal award number and assistance listing title and number, as required by federal regulations. In addition, for TANF and Foster Care subrecipients evaluated, DCFS could not provide formal documentation that the required risk analyses were performed to evaluate each subrecipient’s fraud risk and risk of noncompliance with federal regulations and the terms of the subaward. Criteria: Per 2 CFR 200.332(b)(1-3), a recipient must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information: (1) Federal Award Identification; (2) All requirements of the subaward, including requirements imposed by federal statutes, regulations, and the terms and conditions of the federal award; and (3) Any additional requirements that the pass-through entity imposes on the subrecipient for the recipient to meet its responsibilities under the federal award. 2 CFR 200.332(c) requires recipients to evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward for purposes of determining the appropriate subrecipient monitoring. Per 2 CFR 200.332(e), a recipient must monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with federal statutes, regulations, and the terms and conditions of the subaward. In monitoring a subrecipient, a recipient must review financial and performance reports. Cause: In fiscal year 2025, DCFS made changes to certain subaward agreements. These changes removed certain language from the agreements, which caused them to be in noncompliance with federal requirements. In addition, DCFS failed to document required risk assessments. DCFS represented they performed evaluations over subrecipients through inquiry and observation, ensured good standing on the Louisiana Secretary of State’s website, and monitored audit reports for compliance. Effect: Failure to properly monitor and manage subrecipients, including documenting risk assessments, results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal grantor. Recommendation: DCFS should strengthen controls to ensure that all required information is included in the subaward documents and that risk assessments are performed and documented on all subrecipients in accordance with federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-14).
2025-016 – Noncompliance with and Control Weaknesses over Foster Care Requirements State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LAFOST, 2501LAFOST Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility, and Special Tests and Provisions Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not have adequate controls in place to ensure the allowability of payments or the eligibility of recipients for the Foster Care program. In a statistical sample of 60 out of 36,291 Foster Care payments totaling $19,228,858, we noted the following: • 20 (33%) cases, some of which had multiple exceptions, did not have proper authorizations related to housing eligibility requirements. 12 of the 20 cases did not have documentation of the fingerprint-based criminal records check or the State Central Registry check. 14 of the 20 cases did not have documentation supporting that the foster home, childcare institution, or child placing agency was certified/licensed during the service period tested. For 2 of the 20 cases, support for placement in a qualified residential treatment program was not provided. • 8 (13%) cases, some of which are noted above, had conflicting, unsupported, or inaccurate information on the eligibility determination forms. • For 5 (8%) cases, some of which are noted above, payment authorization forms were not approved by a supervisor prior to the payment. • For 1 (2%) case noted above, the support for financial need used to determine eligibility was not provided. • For 1 (2%) case noted above, there was no support for the special rate paid to the recipient. • For 1 (2%) case noted above, there was an overpayment of three days due to using an incorrect service start date. Criteria: To comply with 42 USC 671(a)(20), DCFS policy 1-1000, Criminal Record Clearance, requires DCFS personnel to complete the fingerprint-based, national criminal background clearances on adoptive parent applicants and adult household members. DCFS policy 9-400, Qualifications of the Foster and Adoptive Caregivers, requires adoptive caregivers to have an affirmative child abuse/neglect clearance and not be listed as a perpetrator of abuse or neglect on the State Central Registry. Also, DCFS policy, Section F - Eligibility Criteria IV-E, requires foster family homes to be certified and facilities to be licensed. 2 CFR 200.303(a) requires that recipients of federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: DCFS did not have a policy over retention of documentation associated with criminal records checks, as well as State Central Registry checks. In addition, DCFS employees did not follow DCFS policy to ensure payments were allowable, recipients were eligible, and proper rates were paid for services. Effect: Failure to implement proper controls over required documentation resulted in noncompliance with federal regulations and state policies. This noncompliance resulted in $66,597 in questioned costs. Recommendation: DCFS should strengthen internal controls to ensure Foster Care payments are allowable and recipients are eligible. In addition, rates paid to recipients should be supported and federal regulations and state policies should be followed. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-20).
2025-017 – Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency Act State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LAFOST, 2401LATANF, 2501LAFOST, 2501LATANF Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements during fiscal year 2025 for the following federal programs: • For the Foster Care program, DCFS did not enter subaward information into the FFATA Subaward Reporting System (FSRS) or the System for Award Management (SAM), as applicable, for any of the 17 different subrecipients. DCFS disbursed approximately $22.3 million in expenditures to those subrecipients during fiscal year 2025. • For the TANF program, DCFS did not enter subaward information into FSRS or SAM, as applicable, for any of the 59 different subrecipients. DCFS disbursed approximately $66.6 million in expenditures to those subrecipients during fiscal year 2025. Criteria: 2 CFR Part 170, Appendix A(I)(a) and (b) requires the recipient to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to an entity into FSRS or SAM, as applicable, no later than the end of the month following the month in which the obligation was made. Cause: Management represented that the cause for this noncompliance is due to procedural changes that were being reviewed before the changes were implemented. Effect: This is the fourth consecutive year we have reported to DCFS management exceptions with compliance related to FFATA reporting. Not reporting obligating actions to FSRS or SAM, as applicable, prevents the public from having access to accurate information on how DCFS is obligating federal funds. Recommendation: DCFS should strengthen internal controls to ensure that appropriate personnel are timely and accurately entering the required award information for FFATA reporting in accordance with federal requirements. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-22).
2025-015 – Noncompliance with and Control Weakness over Adoption Assistance Eligibility Requirements State Entity: Department of Children and Family Services (DCFS) Award Years: 2024, 2025 Award Numbers: 2401LAADPT, 2501LAADPT Compliance Requirement: Eligibility Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: DCFS did not maintain certain eligibility documentation or obtain signatures timely on certain adoption forms, as required by federal regulation and state policy. In a statistical sample of 60 out of 104,052 Adoption Assistance payments totaling $43,111,539, two (3%) cases tested did not have documentation of the fingerprint-based criminal records check or the State Central Registry check. In addition, two (3%) other cases tested did not have the adoption assistance agreement form signed on or before the day of the final decree of adoption. Criteria: To comply with 42 USC 671(a)(20), DCFS policy 1-1000, Criminal Record Clearance, requires DCFS personnel to complete the fingerprint-based, national criminal background clearances on adoptive parent applicants and adult household members. DCFS policy 9-400, Qualifications of the Foster and Adoptive Caregivers, requires adoptive caregivers to have an affirmative child abuse/neglect clearance and not be listed as a perpetrator of abuse or neglect on the State Central Registry. Also, per DCFS policy 8-740, Special Adoption Subsidy Situations, the adoption subsidy agreement must be completed and approved before the final decree (of adoption) is issued. 2 CFR 200.303(a) requires that recipients of federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: DCFS did not have a policy over retention of documentation associated with criminal records checks, as well as State Central Registry checks. In addition, DCFS employees did not follow DCFS policy to ensure adoption assistance agreements were signed within the required timeframe. Effect: Failure to implement proper controls over adoption assistance eligibility documentation resulted in noncompliance with federal regulations and state policies. Noncompliance with the criminal records check and State Central Registry check resulted in $921 in questioned costs. Recommendation: DCFS should strengthen internal controls to ensure adoption assistance eligibility documentation is maintained. These internal controls should also ensure adoption assistance agreements are signed and in effect before the final decree of adoption. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-18).
2025-009 – Inadequate Controls over and Noncompliance with Activities Allowed and Unallowed Requirements State Entity: Capital Area Human Services District (CAHSD) Award Year: Unknown Award Number: Unknown Compliance Requirement: Activities Allowed or Unallowed Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The Capital Area Human Services District (CAHSD) did not have adequate controls in place to ensure that activities charged to the Block Grants for Prevention and Treatment of Substance Abuse (SAPT) federal program were allowed per SAPT program regulations. A nonstatistical sample of 40 expenditures, from a population of 1,568 payroll and non-payroll transactions, identified that CAHSD inappropriately charged an employee’s salary to the SAPT program, resulting in $103,594 of questioned costs due to an unallowed activity. Criteria: 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 45 CFR Part 96, Subpart L provides the appropriate uses of the SAPT program. Cause: CAHSD did not have adequate controls in place to review employees’ job functions to ensure compliance with the purpose of the SAPT program and allowability under grant requirements. Effect: Failure to adequately review expenditures for proper coding increases the risk that unallowable activities are charged to the SAPT program. Recommendation: Management should strengthen its internal controls over the expenditure review process to ensure all charges are allowed per the SAPT program regulations. Management’s Response and Corrective Action Plan: Management partially concurred with the finding and provided a corrective action plan (B-2).
2025-010 – Inadequate Controls over and Noncompliance with Earmarking Requirements State Entity: Capital Area Human Services District (CAHSD) Award Year: Unknown Award Number: Unknown Compliance Requirement: Matching, Level of Effort, Earmarking Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: CAHSD did not have adequate controls in place to ensure that expenditures charged to the Block Grants for Prevention and Treatment of Substance Abuse (SAPT) federal program met the earmarking requirements. CAHSD did not comply with the required threshold of expending at least 20% of funding for primary prevention programs, only expending 16.75% of CAHSD’s SAPT funds for primary prevention programs. Also, in a nonstatistical sample of 40 expenditure transactions out of 1,568, five (13%) transactions were not coded to the correct statistical internal order number within the LaGov accounting system. Criteria: 2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish, document, and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 45 CFR 96.124(b)(1) requires the state to expend not less than 20% for primary prevention programs for individuals who do not require treatment for substance abuse. CAHSD is required by the Louisiana Department of Health – Office of Behavioral Health to code these program expenditures to specific LaGov statistical internal order numbers to ensure the appropriate tracking of expenditures. Cause: The noncompliance occurred because of inadequate controls in place to review and track amounts expended on primary prevention programs. Effect: Failure to adequately review expenditure transactions for proper coding and track overall amounts expended for primary prevention programs increases the risk that earmarking compliance requirements will not be met. Recommendation: Management should strengthen internal controls over the review of expenditure transactions and develop internal controls over the tracking of primary prevention program expenditures through a periodic review of actual costs incurred to ensure the earmarking requirements are met. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-4).
2025-020 – Noncompliance with and Inadequate Controls over Subrecipient Monitoring Requirements State Entity: Louisiana Department of Health (LDH) Award Years: 2022–2025 Award Numbers: B08TI083534, B08TI083942, B08TI084581, B08TI085807, B08TI087039, B08TI088106 Compliance Requirement: Subrecipient Monitoring Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: The LDH Office of Behavioral Health (OBH) did not comply with subrecipient monitoring requirements for the Block Grants for Prevention and Treatment of Substance Abuse (SAPT) program for the fiscal year ending June 30, 2025. SAPT program expenditures totaled $39.3 million during fiscal year 2025, with approximately $28.4 million provided to 10 subrecipients. While OBH identified the SAPT award name and assistance listing number to its subrecipients via an Interagency Transfer Agreement, the letter did not address all applicable requirements. In addition, OBH was unable to provide documentation of reviews performed to evaluate each subrecipient’s risk of noncompliance. Finally, OBH did not adequately monitor subrecipients to ensure expenditures were for allowable activities, allowable costs, and within the period of performance. Criteria: 2 CFR 200.303 requires non-federal entities receiving federal awards to establish, document, and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Subpart D of 45 CFR 75.352 requires pass-through entities to monitor activities of subrecipients. 2 CFR 200.332(b) requires the pass-through entity to clearly identify subawards to the subrecipient and convey certain required federal award information including requirements imposed by federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.332(c) requires the pass-through entity to evaluate each subrecipient’s risk of noncompliance. 2 CFR 200.332(e) requires the pass-through entity to monitor the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Cause: OBH did not have an adequate system of internal controls to ensure compliance with subrecipient monitoring requirements. Effect: Failure to perform adequate monitoring impairs OBH’s ability to ensure that program funds passed through to subrecipients are spent in accordance with program regulations and increases the risk of improper payments. Recommendation: OBH management should develop and strengthen its system of internal controls to ensure that subrecipients are provided with all required information, an evaluation is performed and documented to determine a subrecipient’s risk of noncompliance, and that all subrecipients are adequately monitored to ensure compliance with federal statutes, regulations, and the terms and conditions of the subaward. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-32).
2025-022 – Noncompliance with Earmarking Requirements State Entity: Louisiana Department of Health (LDH) Award Years: 2021, 2023 Award Numbers: B08TI083942, B08TI085807 Compliance Requirement: Matching, Level of Effort, Earmarking Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: LDH, OBH exceeded certain earmarking requirements for the SAPT program. In our review of the four SAPT grants that ended during fiscal year 2025, two of the four grants exceeded the 5% maximum amount allowed to be expended related to intervention services for the HIV disease, resulting in federal questioned costs of $341,408. Criteria: 42 USC 300x-24(b)(4)(B) requires that states obligate and expend no more than 5% of the award to carry out one or more projects to make available to individuals early intervention services for HIV disease at the sites where the individuals are undergoing treatment. Cause: OBH did not effectively monitor the HIV expenditures to ensure earmarking requirements were not being exceeded. Effect: The HIV earmarked limit was exceeded by $341,408, resulting in federal questioned costs. Recommendation: OBH should strengthen its system of internal controls to ensure that earmarking requirements are not being exceeded for each SAPT grant awarded. Management’s Response and Corrective Action Plan: Management partially concurred with the finding and provided a corrective action plan (B-37). Auditor’s Additional Comments: Although management acknowledged expenditures exceeded the HIV set-aside limit, management did not concur with the total amount of questioned costs. Management responded that $157,111 of the $341,408 questioned costs was not applicable due to Substance Abuse and Mental Health Services Administration’s decision to terminate the Substance Use Prevention, Treatment, and Recovery Services American Rescue Plan Act Supplement grant for cause, which removed the obligation to meet requirements for those services. At the time of termination, the 5% maximum amount based on the grant allotment had already been exceeded. In addition, no documentation was provided to support the earmarking requirement was no longer applicable for this grant.
2025-025 – Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency Act State Entity: Louisiana Department of Health (LDH) Award Year: 2025 Award Number: B08TI088106 Compliance Requirement: Reporting Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: LDH, OBH did not comply with FFATA reporting requirements for the SAPT program. As of June 30, 2025, OBH had not entered subaward information into the Federal system for 10 subawards of $30,000 or more totaling $23,457,985. Criteria: 2 CFR Part 170, Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FFATA Subaward Reporting System no later than the end of the month following the month in which the obligation was made. 2 CFR 200.303 requires non-federal entities receiving federal awards to establish, document, and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: OBH did not have an adequate system of internal controls to ensure compliance with FFATA reporting requirements. Effect: Noncompliance with FFATA reporting requirements prevents the public from having access to accurate and timely information regarding the administration of federal awards. Recommendation: OBH should develop and strengthen its system of internal controls to ensure that appropriate personnel are timely entering the required award information for FFATA reporting in accordance with federal requirements. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-43).
2025-005 – Noncompliance with Subrecipient Monitoring Requirements State Entity: University of Louisiana at Lafayette (UL Lafayette) Award Years: 2019, 2022, 2024 Award Numbers: 1920858, 2119688, 2418434, 80NSSC21M0333, 80NSSC24K0865, U19AI142636 Compliance Requirement: Subrecipient Monitoring Repeat Finding: Yes (Prior Year Finding Nos. 2024-008, 2023-008, 2022-007, 2021-010) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the fifth consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster Programs. In a nonstatistical sample of seven subawards out of a population of 49 subawards, it was noted that for six (86%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipient’s fraud risk and risk of noncompliance with federal regulations and the terms of the subaward. For three (43%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the financial and performance reports required by the subaward agreements were obtained and reviewed by UL Lafayette. For two (29%) of the subrecipients evaluated, the subaward documents did not contain the federal award date, as required by federal regulations, and additionally in one (14%) of these two noted subawards, the subaward did not contain the period of performance. For one (14%) of the subrecipients reviewed, UL Lafayette was unable to provide documentation that ensured the subrecipient obtained the required audit and that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Criteria: Note: Auditor determined that all subawards selected for testing were issued prior to October 2024 and continued to apply the previous version of 2 CFR 200 (Compliance Supplement Part 3.1). 2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. 2 CFR 200.332(d)(1) requires that pass-through entities monitor the activities of the subrecipient including reviewing financial and performance reports required by the pass-through entity. Per 2 CFR 200.332(a)(1)(iv) and 2 CFR 200.332(a)(1)(v), all pass-through entities must ensure that every subaward includes the federal award date and subaward period of performance start and end date. 2 CFR 200.332(f) requires pass-through entities to verify that every subrecipient is audited as required by 2 CFR 200 Subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501 of $750,000. Cause: UL Lafayette did not have sufficient controls in place to adequately monitor subrecipients, as required by federal regulations. Effect: Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency. Recommendation: UL Lafayette should strengthen controls for subrecipient monitoring to ensure that risk assessments are performed and documented on all subrecipients, that all required financial and performance reports are obtained and reviewed, that required information is included in the subaward documents, and that all required subrecipient audit reports are obtained and reviewed in order to evaluate the impact of any findings noted by the audit and issue management decision letters, if applicable. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-53).
2025-003 – Noncompliance and Weakness in Controls with Special Tests and Provisions Requirements State Entity: Louisiana State University Health Sciences Center – Shreveport (LSUHSC-S) Award Years: 2021–2024 Award Numbers: 80NSSC21K0273, 80NSSC22M0030, P20GM121307, R00HL145131, R01CA240496, R01CA271714, R01NS126273, R33AT010637, R56AI159672 Compliance Requirement: Special Tests and Provisions Pass-Through Entities: University of Massachusetts Chan Medical School, Washington University Repeat Finding: Yes (Prior Year Finding Nos. 2024-004, 2023-029, 2022-034, 2021-069, 2020-061, 2019-036) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the seventh consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a nonstatistical sample of 16 federal Research and Development (R&D) Cluster awards from a population of 83 awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2025. We noted that for two of 18 awards (11%), LSUHSC-S did not have adequate documentation to show that the key personnel maintained the required level of effort, and there was also no evidence of prior approval from the federal grantor for a disengagement or change in key personnel, as required. In addition, we noted that during the period July 1, 2024, through December 31, 2024, LSUHSC-S’s controls were not effectively designed to ensure prior approval was obtained for changes in effort by key personnel, as required by federal regulations, specifically relating to disengagement from a project for more than three months or a 25% reduction in effort. Beginning with the quarter ending March 31, 2025, LSUHSC-S implemented quarterly time and effort monitoring. We tested the quarterly time and effort monitoring control for the period January 1, 2025, through June 30, 2025, and noted that, for eight of 18 awards (44%), LSUHSC-S did not complete the quarterly monitoring forms timely. Criteria: 2 CFR 200.308(f) states that a recipient or subrecipient must request prior written approval from the federal agency or pass-through entity for the following program and budget-related reasons: • Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval). • Change in key personnel (including employees and contractors) that are identified by name or position in the federal award. • The disengagement from a project for more than three months, or a 25% reduction in time and effort devoted to the federal award over the course of the period of performance, by the approved project director or principal investigator. Cause: From July 1, 2024, through December 31, 2024, LSUHSC-S’s biannual time and effort certification was not effectively designed to ensure prior approval was obtained for changes in effort by key personnel, as required by federal regulations, specifically relating to disengagement from a project for more than three months or a 25% reduction in effort. As noted above, LSUHSC-S implemented quarterly time and effort monitoring in the third quarter of fiscal year 2025; however, this process was not fully implemented. Effect: Failure to implement controls over key personnel requirements increases the risk that federal programs are not performed as authorized and could result in noncompliance with Special Tests and Provisions requirements. Recommendation: Management should monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management should also ensure the time and effort monitoring forms are completed timely to ensure compliance with Special Tests and Provisions requirements. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-45).
2025-004 – Control Weakness and Noncompliance with Special Tests and Provisions Requirements State Entity: University of Louisiana at Lafayette (UL Lafayette) Award Years: 2019, 2023, 2024 Award Numbers: 15PJDP22GG03096COIP, 20237043838714, 2327452, DEEE0009716, M19AC00015, M23AC00008, NYLTS0022-21, R01AI172539, R01AI179317, R01DK131476, U54AG063546 Compliance Requirement: Special Tests and Provisions Pass-Through Entities: Brown University (via Trustees of Indiana University), Second Harvest Food Bank of Greater New Orleans and Acadiana, Texas Biomedical Research Institute, The Research Foundation for the State University of New York, University of Pittsburgh of the Commonwealth System of Higher Education Repeat Finding: Yes (Prior Year Finding Nos. 2024-006, 2023-007, 2022-006, 2021-009) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the fifth consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a nonstatistical sample of 22 federal R&D Cluster awards from a population of 212 awards for the fiscal year ending June 30, 2025. We noted that for nine (41%) of 22 federal R&D awards, key personnel were not involved in the project at the level required by the federal award or proposal submissions, and UL Lafayette did not obtain prior approval for such changes in effort from the federal grantor agency or pass-through entity. In addition, we noted that for two (9%) of 22 federal awards, UL Lafayette did not have time and effort certifications for key personnel and could not verify that the required effort was met. Criteria: 2 CFR 200.308(f) states that a recipient or subrecipient must request prior written approval from the federal agency or pass-through entity for the following program and budget-related reasons: • Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval). • Change in key personnel (including employees and contractors) that are identified by name or position in the federal award. • The disengagement from a project for more than three months, or a 25% reduction in time and effort devoted to the federal award over the course of the period of performance, by the approved project director or principal investigator. Cause: UL Lafayette did not have adequately-designed controls in place to monitor key personnel to ensure that the required level of effort was met and to ensure prior written approvals were obtained when needed. UL Lafayette implemented effort certifications in Banner with reporting cycles covering January 1, 2024, through December 31, 2024, and January 1, 2025, through June 30, 2025. Annual and semiannual certifications are not sufficient to timely detect changes in key personnel effort and to ensure prior approvals are obtained when applicable. Additionally, UL Lafayette represented that principal investigators (PIs) are responsible for their required level of effort and should communicate any significant changes in level of effort to UL Lafayette’s Office of Research and Sponsored Programs; however, there is no mechanism to ensure that PIs are timely fulfilling their responsibilities to communicate such changes. Effect: Failure to implement adequately designed controls over key personnel requirements increases the risk that federal programs are not performed as authorized and could result in noncompliance with Special Tests and Provisions requirements. Recommendation: Management should develop controls to ensure the required key personnel level of effort is met and to anticipate the need to seek prior approval for key personnel reductions in effort or disengagement from the project when required. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-50).
2025-018 – Inadequate Controls over Billing for Behavioral Health Services State Entity: Louisiana Department of Health (LDH) Award Years: 2024, 2025 Award Numbers: 2405LA5021, 2405LA5MAP, 2505LA5021, 2505LA5MAP Compliance Requirement: Activities Allowed or Unallowed Repeat Finding: Yes (Prior Year Finding Nos. 2024-023, 2023-021, 2022-025, 2021-055, 2020-046, 2019-022) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the seventh consecutive year, the Louisiana Department of Health (LDH), the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Grants to States for Medicaid program (Medicaid) and Children’s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2025, we identified approximately $15.8 million in encounters for services between July 1, 2024, and June 30, 2025, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH’s encounter coding requirements and/or approved fee schedules. Our analysis identified the following instances of billing errors: Providers were paid $10,851,041 for 155,873 encounters that were billed using incorrect procedure and modifier codes. Providers were paid $4,937,407 for 50,574 encounters that exceeded LDH’s specialized behavioral health services fee schedules. Criteria: LDH’s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained. The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule. Cause: In following its corrective action plan from fiscal year 2022, LDH contracted with the External Quality Reviewer (EQR) to validate a representative sample of encounters against the Medicaid fee schedule on file at the time of service delivery, inclusive of modifier utilization. Implementation of this protocol began in fiscal year 2023 and has continued through fiscal year 2025. However, auditors noted that for the third year in a row the EQR’s analysis did not review the use of location modifiers in encounters. The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed. Effect: Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate. Because LDH does not currently maintain a list of these providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed. It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General’s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month (PMPM) rates for the MCOs. Recommendation: LDH management should ensure that agency personnel are adequately monitoring the EQR contract and that the proper validations are being conducted to ensure encounters are coded correctly. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-26).
2025-019 – Inadequate Internal Controls over Eligibility Determinations State Entity: Louisiana Department of Health (LDH) Award Years: 2020–2025 Award Numbers: 2005LA5MAP, 2105LA5MAP, 2205LA5MAP, 2305LA5MAP, 2405LA5021, 2405LA5MAP, 2505LA5021, 2505LA5MAP Compliance Requirements: Activities Allowed or Unallowed, Eligibility Repeat Finding: Yes (Prior Year Finding Nos. 2024-026, 2023-024, 2022-028, 2021-060, 2020-051) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the sixth consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid program and CHIP program for the fiscal year ending June 30, 2025. From a population of 43,233,730 Medicaid PMPM and Fee-For-Service (FFS) payments totaling $8.9 billion, a nonstatistical sample of 60 Medicaid payments was selected, and the corresponding beneficiary’s eligibility was tested to ensure compliance with eligibility federal regulations. Discrepancies related to the beneficiary’s case records regarding eligibility determination and redetermination were identified for 20 (33%) of the 60 payments tested. The following errors were noted for Medicaid: • For one payment, inadequate or incorrect documentation was included in the case record to support the eligibility redetermination. • For 12 payments, LDH personnel did not accurately perform all required eligibility determinations before renewing the beneficiary. • For seven payments, LDH personnel did not accurately perform all required eligibility determinations before enrolling or renewing the beneficiary, resulting in the beneficiary being invalidly enrolled. In addition, from a population of 3,078,556 CHIP PMPM and FFS payments totaling $293 million, a nonstatistical sample of 60 CHIP payments were selected, and the corresponding beneficiary’s eligibility was tested to ensure compliance with eligibility federal regulations. Discrepancies related to the beneficiary’s case records regarding eligibility determination and redetermination were identified for 23 (38%) out of 60 payments tested. The following errors were noted for CHIP: • For three payments, inadequate or incorrect documentation was included in the case record to support the eligibility redetermination. • For 10 payments, LDH personnel did not accurately perform all required eligibility determinations before renewing the beneficiary. • For 10 payments, LDH personnel failed to accurately perform all required eligibility determinations before enrolling or renewing the beneficiary, resulting in the beneficiary being invalidly enrolled. Finally, an audit report issued in May of 2025 by the Louisiana Legislative Auditor’s Performance Audit Services (PAS) titled Progress Report: Medicaid Residency, concluded that LDH had not improved its processes to identify Medicaid beneficiaries who no longer reside in Louisiana and therefore no longer qualify for the Louisiana’s Medicaid program. As a result, LDH failed to discontinue coverage for three Medicaid beneficiaries who moved out of state. Criteria: 42 CFR 431, 42 CFR 435, and 42 CFR 457 require that, in order to be considered eligible, a beneficiary must meet all eligibility factors, and the beneficiary case record must include facts to support the agency’s eligibility decision. 42 CFR 435 and 42 CFR 457 also require annual renewal of eligibility. LDH has outlined eligibility criteria and documentation to support determinations and renewals in their Medicaid Eligibility Manual. Cause: LDH did not adhere to established control procedures to ensure case records support eligibility determination and redeterminations per the federal regulations and the Medicaid Eligibility Manual. Effect: Proper eligibility determination and redetermination are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures. Questioned costs totaling $410,184 in federal funds in relation to the Medicaid beneficiaries who moved out of state, were invalidly enrolled, or whose renewal determination resulted in an erroneous certification of eligibility. Questioned costs totaling $13,224 in federal funds in relation to the CHIP beneficiaries who were invalidly enrolled or whose renewal determination resulted in an erroneous certification of eligibility. We did not note any questioned costs related to the other errors. Recommendation: LDH should ensure its employees follow procedures and federal regulations relating to eligibility determinations and redeterminations in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions. Management’s Response and Corrective Action Plan: Management concurred in part with the finding and provided a corrective action plan (B-28). Auditor’s Additional Comments: LDH noted in their response they did not concur with the errors noted for the Medicaid and CHIP renewals related to the Supplemental Nutrition Assistance Program (SNAP) not being properly documented. The errors noted relate to a weakness in internal controls as the system errors noted in the case records resulted in inadequate documentation to support the eligibility redetermination. LDH also did not concur with one Medicaid error for which there was no documentation of school enrollment for a beneficiary over age 18 on a Children’s Choice Waiver. The LDH Medicaid Eligibility Manual states that participants who reach age 18 and remain enrolled in school may continue to receive waiver services until their 21st birthday; participants currently receiving waiver services who reach age 18 and choose to no longer attend school may transition to a Supports Waiver. Therefore, documentation of school enrollment is necessary to determine the appropriate waiver services. For two of the CHIP errors, LDH did not concur that not all active income found in interfaces was counted in determining eligibility as LDH policy is to utilize the highest income reported by Louisiana Workforce Commission (LWC) at the time of processing. However, use of the policy without consideration of other available information may result in noncompliance. In the cases noted, the use of the highest income reported by LWC resulted in the use of incomplete or older returned income data, which affected the eligibility determinations.
2025-021 – Noncompliance with Disproportionate Share Hospital Payments State Entity: Louisiana Department of Health (LDH) Award Year: 2025 Award Number: 2505LA5MAP Compliance Requirement: Activities Allowed or Unallowed Repeat Finding: Yes (Prior Year Finding No. 2024-028) See Schedule of Findings and Questioned Costs for chart/table. Condition: LDH exceeded the federally-allocated 2020 Disproportionate Share Hospital (DSH) funding limit by $3,162,186, resulting in federal questioned costs of $2,114,237. This is the second consecutive year that LDH exceeded a federally-allocated DSH funding limit. LDH makes payments for uncompensated costs to qualifying hospitals that serve a large number of Medicaid and uninsured individuals. These payments are known as DSH payments. Criteria: Section 1923 of the Social Security Act and LDH's State Plan Amendment 4.19 limit DSH payments on a state-wide basis to the annual DSH allotments. The allotment is capped and represents the maximum federal matching payments a state is permitted to claim. The allotment does not have to be spent in the specific allotment year but can be applied indefinitely until completely utilized. Cause: The overage occurred due to an inadequate reconciliation between the agency’s actual DSH expenditures and the federal allotment. LDH failed to consider additional payments previously made and federally reimbursed during their calculation of the remaining 2020 DSH federal allotment. Effect: The 2020 DSH funding limit was exceeded by $3,162,186, resulting in federal questioned costs of $2,114,237. Recommendation: LDH should ensure an adequate review of their calculations to verify that all federal payments are included to prevent the department from exceeding the federal DSH allotment in the future. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-35).
2025-023 – Noncompliance with Fee-for-Service Provider Revalidation Requirements State Entity: Louisiana Department of Health (LDH) Award Years: 2024, 2025 Award Numbers: 2405LA5021, 2405LA5MAP, 2505LA5021, 2505LA5MAP Compliance Requirement: Special Tests and Provisions Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table. Condition: LDH did not timely perform revalidations as required by federal regulations for all Medicaid and CHIP fee-for-service (FFS) providers. LDH contracted with Gainwell Technologies, LLC. (Gainwell) to revalidate providers. In our review of portal system reports for all providers required to be revalidated during the fiscal year ending June 30, 2025, we noted the following: • 134 (100%) of 134 Durable Medical Equipment providers that were required to be revalidated during or prior to fiscal year 2025 did not have a revalidation completed within the required three-year timeframe. Providers were revalidated between 21 and 161 days late. • 3 (75%) of 4 other providers that were required to be revalidated during or prior to fiscal year 2025 did not have a revalidation completed within the five-year timeframe. Providers were revalidated between 515 and 791 days late. Criteria: 42 CFR 424.57(g) requires that providers of durable medical equipment, prosthetics, orthotics and supplies revalidate their application for billing privileges every three years after billing privileges are first granted. 42 CFR 455.414 requires the State Medicaid agency to revalidate the enrollment of all providers regardless of provider type at least every five years. Cause: LDH did not adequately monitor their contractor, Gainwell, to ensure revalidations were being completed timely. Effect: Improper provider revalidation could prevent the state from timely identifying ineligible providers that should be rejected or excluded from participation in the program. Recommendation: LDH should adequately monitor the contractor to ensure all providers are revalidated within the required timeframe in accordance with federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-39).
2025-024 – Noncompliance with Managed Care Provider Enrollment and Screening Requirement State Entity: Louisiana Department of Health (LDH) Award Years: 2024, 2025 Award Numbers: 2405LA5021, 2405LA5MAP, 2505LA5021, 2505LA5MAP Compliance Requirement: Special Tests and Provisions Repeat Finding: Yes (Prior Year Finding Nos. 2024-029, 2023-026, 2022-029, 2021-061, 2020-052, 2019-030, 2018-028) See Schedule of Findings and Questioned Costs for chart/table. Condition: For the eighth consecutive year, LDH did not enroll and screen all Healthy Louisiana managed care providers and dental managed care providers, as required by federal regulations. In our review of the 15,219 providers paid during fiscal year 2025, it was determined that 950 (6%) of managed care and dental managed care providers were not enrolled and screened in accordance with federal regulations. Criteria: 42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process includes providing the Medicaid agency with the provider’s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally-required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers. Cause: In July 2021, LDH launched the enrollment portal created by Gainwell, the state’s current provider enrollment vendor. Although the enrollment portal was launched in fiscal year 2022 for existing providers as of March of 2022, new providers were not invited to enroll, as this required an amendment to the contract with Gainwell and additional costs. An amendment to the contract was approved in October of 2024 and required Gainwell to maintain compliance with the 21st Century Cures Act and ensure all Medicaid health care providers are enrolled with the State Medicaid Agency, subject to a risk-based screening, and revalidated every five years. LDH began the process of inviting providers to the portal in October of 2024 but did not complete sending invitations until March 2025. Therefore, not all of the Healthy Louisiana managed care providers and dental managed care providers that received payments in fiscal year 2025 were enrolled and screened prior to June 30, 2025. Effect: LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. Recommendation: LDH should ensure all providers are screened and enrolled as required by federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-41).