DEPARTMENT OF HEALTH ACTIVITIES ALLOWED/ALLOWABLE COSTS Material Weakness Material Noncompliance 2024-027 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) ALN Number(s) 10.557 - Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award 205MS707W5003 (10/1/2019 – 9/30/2021) 215MS707W5003 (10/1/2020 – 9/30/2022) 235MS704W1003 (10/1/2022 – 9/30/2023) 235MS704W1006 (10/1/2022 – 9/30/2023) 245MS704W1003 (10/1/2023 – 9/30/2024) 245MS704W1006 (10/1/2023 – 9/30/2024) PAN-WIC-ARPA-TECH-IMPL (5/23/2023 – 9/30/2027) Questioned Costs N/A Criteria The Code of Federal Regulations (2 CFR 200.430(8)(i)) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over allowable costs requirements for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Program as of June 30, 2024, the Department of Health (Department) was unable to provide documentation that payroll costs charged to the program were accurate. The auditor noted the following: • For 40 of 40 timesheets selected for testing, the Department was unable to provide documentation supporting that the recorded time and pay rates were appropriately charged to the grant. • For 40 of 40 employees, who worked 100% or less than 100% and charged to the grant, auditor was unable to obtain evidence supporting the predetermined allocation was appropriately charged to the grant. Cause The Department’s procedures and controls were not sufficient to ensure that time and effort reporting was accurately performed and documented, nor that employee time was properly allocated. Effect There is an increased risk of charging unallowed payroll costs to the program. Recommendation We recommend the Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH ELIGIBILITY Significant Deficiency Immaterial Noncompliance 2024-028 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program ALN Number(s) 10.557 - Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award 225MS704W1006 (10/1/2021 – 9/30/2023) 235MS704W1006 (10/1/2022 – 9/30/2023) 245MS704W1006 (10/1/2023 – 9/30/2024) Questioned Costs N/A Criteria Applicants for WIC program benefits are screened at WIC clinic sites to determine their WIC eligibility. Eligibility requirements include the following: a. Categorical – Eligibility is restricted to pregnant, postpartum, and breastfeeding women, infants, and children up to their fifth birthday. b. Identity and Residency – Except in limited circumstances, WIC applicants must be physically present for eligibility screenings and provide proof of identity and residency. An applicant also must meet the state agency’s residency requirements. c. Income – An applicant must meet an income standard established by the state agency or be determined to be automatically (adjunctively) income-eligible based on documentation of his/her eligibility, or certain family members’ eligibility, for the following federal programs: (1) Temporary Assistance for Needy Families; (2) Medicaid; or (3) Supplemental Nutrition Assistance Program (formerly the Food Stamp Program). State agencies also may determine an individual automatically income-eligible based on documentation of his/her eligibility for certain state-administered programs. d. Income Guidelines – The income standard established by the state agency may be up to 185 percent of the poverty income guidelines issued annually by HHS or state or local income guidelines used for free and reduced-price health care. However, in using health care guidelines, the income guidelines for WIC must be between 100 and 185 percent of the poverty income guidelines. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over eligibility requirements for the Special Supplemental Nutrition Program for Women, Infants, and Children program as of June 30, 2024, the Department of Health (Department) was unable to provide documentation that WIC participants met all eligibility criteria. The auditor noted the following: • For 2 of 40 timesheets selected for testing, the Department was unable to provide documentation that the participants met the income eligibility requirements.. • For 1 of 40 employees, the Department was unable to provide documentation that the participant met the residency requirement. Cause The Department’s procedures and controls were not sufficient to ensure that WIC participants met all eligibility criteria or that documentation of participants’ eligibility was maintained. Effect There is an increased risk of ineligible individuals receiving benefits under the program. Recommendation We recommend the Department review and update its procedures and controls to ensure that only eligible participants receive benefits under the program. Eligibility documentation should be maintained and readily available for audit. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH PERIOD OF PERFORMANCE Significant Deficiency Immaterial Noncompliance 2024-029 Strengthen Controls to Ensure Compliance with Period of Performance Requirements of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program ALN Number(s) 10.557 - Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award 205MS707W5003 (10/1/2019 – 9/30/2021) 215MS707W5003 (10/1/2020 – 9/30/2022) 235MS704W1006 (10/1/2022 – 9/30/2023) Questioned Costs $1,080,447 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Any costs incurred before the federal awarding agency or pass-through entity made the federal award must be authorized by the federal awarding agency or pass-through entity. A period of performance may contain one or more budget periods. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over eligibility requirements for the Special Supplemental Nutrition Program for Women, Infants, and Children program as of June 30, 2024, the Department of Health (Department) charged costs to federal grants that were after the end date of the grants’ allowable period of performance. The auditor noted the following: • the Department claimed $118,651 against a grant agreement that ended on September 30, 2021, and $938,319 against a grant agreement that ended on September 30, 2022. Three of forty samples tested for a total of $23,477 were incurred after the grant award end date. Cause The Department’s procedures and controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the awards’ period of performance. Effect Costs could be deemed unallowable by the awarding agency if funds are expended and/or obligated after the allowable period of performance. Recommendation We recommend the Department review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Material Noncompliance 2024-030 Strengthen Controls to Ensure Compliance with Procurement, Suspension and Debarment Requirements of the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program ALN Number(s) 10.557 - Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Federal Award 215MS707W5003 (10/1/2022 – 9/30/2022) 235MS704W1003 (10/1/2022 – 9/30/2023) 235MS704W1006 (10/1/2022 – 9/30/2023) 235MS704W5003 (10/1/2022 – 9/30/2024) 245MS704W1003 (10/1/2023 – 9/30/2024) 245MS704W1006 (10/1/2023 – 9/30/2024) Questioned Costs N/A Criteria The Code of Federal Regulations (2 CFR 200.317) Procurements by states, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Code of Federal Regulations (2 CFR 200.214) Suspension and Debarment, restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities Code of Federal Regulations (2 CFR 180.300) states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over procurement, suspension and debarment requirements for the special supplemental nutrition program for women, infants, and children (WIC) program as of June 30, 2024, The Department of Health (Department) was unable to provide documentation that it procured goods and services under the program in accordance with its established procurement policy nor that it ensured vendors were not suspended or debarred Cause The Department’s procedures and internal controls were not sufficient to ensure that it procured goods and services under the program in accordance with its established procurement policy nor that it ensured vendors were not suspended or debarred. Effect The Department did not follow its procurement policy, nor did it verify vendors’ suspension and debarment status prior to procuring services from the vendor. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program and/or the Department or with vendors who are ineligible to participate in the program. Recommendation We recommend the department review and enhance controls and procedures to ensure that it follows its procurement policy and federal suspension and debarment regulations for all applicable goods and services purchased for the program. Repeat Finding No. Statistically Valid Yes.
MISSISSIPPI DEVELOPMENT AUTHORITY REPORTING Significant Deficiency Immaterial Noncompliance 2024-008 Strengthen Controls with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. ALN Number 14.228 – Community Development Block Grant Federal Award No. B-17-DC-28-0001 - 2017 B-18-DC-28-0001 - 2018 B-19-DC-28-0001 - 2019 B-20-DC-28-0001 - 2020 B-21-DC-28-0001 - 2021 B-22-DC-28-0001 - 2022 B-23-DC-28-0001 - 2023 D-21-DZ-28-0001 - 2021 B-06-DG-28-0001 - 2006 B-06-DG-28-0002 – 2006 Questioned Costs N/A Criteria Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During Fiscal year 2024, subawards were obligated on February 20, 2024, should have been reported to FSRS by April 30, 2024. MDA could not provide support that required FFATA reporting was completed by April 30, 2024 per Sam.gov, ten of the ten subawards selected for testing were not reported to FSRS until July 31, 2024. TRANSACTIONS TESTED Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 10 0 10 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $5,371,619 $0 $5,371,619 $0 $0 Cause MDA cited that errors and data loss occurred during the transitions from FSRS to Sam.gov by the Federal government which resulted in MDA being required to re-upload the FFATA reporting in July 2024. Effect MDA did not timely file the reporting required by FFATA. Recommendation We recommend that MDA develop internal controls and procedures to ensure that all required subawards are reported to Sam.gov in accordance with FFATA reporting requirements. Repeat Finding No. Statistically Valid No.
DEPARTMENT OF EMPLOYMENT SECURITY ELIGIBILITY Significant Deficiency Immaterial Noncompliance 2024-010 Strengthen Controls to Ensure Compliance with Eligibility Requirements for the Workforce Innovation and Opportunity Act Cluster (WIOA). ALN Number (s) 17.258, 17.259, 17.278 – Workforce Innovation and Opportunity Act Cluster Federal Award No. 23A55AA03525; 4/1/2022-6/30/2025 23A55AT000012; 7/1/2023-6/30/2026 23A55AY000006; 4/1/2023-6/30/2026 23A55AW000015; 7/1/2023-6/30/2026 Questioned Costs N/A Criteria The Code of Federal Regulations (20 CFR 680-683), state workforce agencies must ensure that individuals are eligible to participate in the program. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over eligibility requirements for the Workforce Innovation and Opportunity Act Cluster (WIOA) as of June 30, 2024, the Mississippi Department of Employment Security (MDES) was unable to provide documentation that the eligibility determinations for participants were performed in accordance with federal requirements and state policies and procedures. The auditor noted the following: • For 1 out of 60 samples tested, MDES could not provide documentation that the eligibility determination for the participant had been reviewed and approved. • For 2 out of 60 samples tested, the funding category in the system did not match the approved eligibility checklist. Cause Internal controls were not sufficient to ensure that documentation supporting participant eligibility was maintained or was reviewed and approved by a supervisor. Effect Failure to ensure that all eligibility documentation is maintained and properly reviewed and approved could result in ineligible individuals participating in the program. Recommendation MDES should review and enhance internal controls and procedures to ensure that participant eligibility documentation is properly reviewed and approved by a supervisor and is readily available for audit. Repeat Finding Yes, 2023-012. Statistically Valid No.
DEPARTMENT OF EMPLOYMENT SECURITY REPORTING Significant Deficiency Immaterial Noncompliance 2024-009 Strengthen Controls to Ensure Compliance with the Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. ALN Number (s) 17.258, 17.259, 17.278 – Workforce Innovation and Opportunity Act Cluster Federal Award No. 23A55AA03525; 4/1/2022-6/30/2025 23A55AT000012; 7/1/2023-6/30/2026 23A55AY000006; 4/1/2023-6/30/2026 23A55AW000015; 7/1/2023-6/30/2026 Questioned Costs N/A Criteria The Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over reporting requirements for the Workforce Innovation and Opportunity Act Cluster (WIOA) as of June 30, 2024, the Mississippi Department of Employment Security (MDES) could not provide adequate support that the subaward was reported in a timely manner to the Federal Funding Accountability and Transparency Act Subaward Reporting system (FSRS) in accordance with the Federal Funding Accountability and Transparency Act (FFATA). Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 6 0 6 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $17,766,110 $0 $17,766,110 $0 $0 Cause MDES cited that errors and data loss occurred during the transitions from FSRS to Sam.gov by the Federal government which resulted in the auditors being unable to verify the original submission dates. MDES did not maintain documentation of the original submission dates. Effect MDES was unable to provide documentation supporting the timely filing of the reporting requirements by FFATA. Recommendation We recommend that MDES develop internal controls and procedures to ensure that all required subawards are reported to Sam.gov in accordance with FFATA reporting requirements. Repeat Finding Yes, 2023-010. Statistically Valid No.
DEPARTMENT OF HEALTH ACTIVITIES ALLOWED/ALLOWABLE COSTS Material Weakness Material Noncompliance 2024-031 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of the Immunization Cooperative Agreements program ALN Number(s) 93.268 – Immunization Cooperative Agreements Federal Award NH23IP922605 (7/1/2019 – 6/30/2024) Questioned Costs N/A Criteria Code of Federal Regulations (2 CFR 200.430(8)(i)) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over allowable costs requirements for the Immunization Cooperative Agreements program as of June 30, 2024, the Department of Health (Department) was unable to provide documentation that payroll costs charged to the program were accurate. The auditor noted the following: • For 40 of 40 timesheets selected for testing, the Department was unable to provide documentation supporting that the recorded time and pay rates were appropriately charged to the grant. • For 40 of 40 employees, who worked 100% or less than 100% and charged to the grant, auditor was unable to obtain evidence supporting the predetermined allocation was appropriately charged to the grant. Cause The Department’s procedures and controls were not sufficient to ensure that time and effort reporting was accurately performed and documented, nor that employee time was properly allocated. Effect There is an increased risk of charging unallowed payroll costs to the program. Recommendation We recommend the Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH ACTIVITIES ALLOWED/ALLOWABLE COSTS Material Weakness Material Noncompliance 2024-032 Strengthen Controls to Ensure Compliance with Allowable Costs Requirements of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program ALN Number(s) 93.323 – Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award NU50CK000550 (8/1/2019 – 7/31/2026) Questioned Costs N/A Criteria Code of Federal Regulations (2 CFR 200.430(8)(i)) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over allowable costs requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program as of June 30, 2024, the Department of Health (Department) was unable to provide documentation that payroll costs charged to the program were accurate. The auditor noted the following: • For 40 of 40 timesheets selected for testing, the Department was unable to provide documentation supporting that the recorded time and pay rates were appropriately charged to the grant. • For 40 of 40 employees, who worked 100% or less than 100% and charged to the grant, auditor was unable to obtain evidence supporting the predetermined allocation was appropriately charged to the grant. Cause The Department’s procedures and controls were not sufficient to ensure that time and effort reporting was accurately performed and documented, nor that employee time was properly allocated. Effect There is an increased risk of charging unallowed payroll costs to the program. Recommendation We recommend the Department should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH PROCUREMENT, SUSPENSION AND DEBARMENT Material Weakness Material Noncompliance 2024-033 Strengthen Controls to Ensure Compliance with Procurement, Suspension and Debarment Requirements of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program ALN Number(s) 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award NU50CK000550 (8/1/2019 – 7/31/2026) Questioned Costs N/A. Criteria Code of Federal Regulations (2 CFR 200.317), Procurements by states, when procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. Code of Federal Regulations (2 CFR 200.214), Suspension and Debarment, restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Coder of Federal Regulations (2 CFR 180.300), states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over procurement, suspension and debarment requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program as of June 30, 2024, the Department of Health (Department) was unable to provide documentation that it procured goods and services under the program in accordance with established procurement policy nor that it ensured vendors were not suspended or debarred. The auditor noted the following: • For eight of eight contracts selected for testing, the Department was unable to provide documentation that they were issued in accordance with its procurement policy. • For six of six vendors selected for testing, the Department was unable to provide documentation that it had verified the vendors were not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Cause The Department’s procedures and controls were not sufficient to ensure that program purchases were made in accordance with its established procurement policy nor that suspension and debarment regulations were followed. Effect The Department did not follow its procurement policy, nor did it verify vendors’ suspension and debarment status prior to procuring services from the vendor. Failure to adhere to procurement and suspension and debarment policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program and/or the Department or with vendors who are ineligible to participate in the program. Recommendation We recommend the Department should review and enhance controls and procedures to ensure that it follows its procurement policy and federal suspension and debarment regulations for all applicable goods and services purchased for the program. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HEALTH REPORTING Material Weakness Material Noncompliance 2024-034 Strengthen Controls to Ensure Compliance with Reporting Requirements of the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program ALN Number(s) 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award NU50CK000550 (8/1/2019 – 7/31/2026) 19NU50CK00050DMODC3 (8/1/2019 – 7/31/2026) Questioned Costs N/A Criteria Grantees are required to submit annual and final SF-425 Financial Reports which report total funds obligated and expended. Annual financial reports are due within 90 days after the end of the budget period and final financial reports are due within 120 days after the end of the period of performance. Grantees are required to submit annual performance/progress reports within 90 days after the end of the budget period and final performance/progress reports within 120 days after the end of the period of performance. Code of Federal Regulations (2 CFR 200.303(a)), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During testwork performed over procurement, suspension and debarment requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program as of June 30, 2024, the Department of Health (Department) was unable to provide copies of all reports submitted to the Centers for Disease Control (CDC) through its reporting portal, nor were they able to provide documentation that reports had been reviewed and approved prior to submission. The auditor noted the following: • Five quarterly progress reports, five quarterly financial progress reports, and one annual performance/progress report were selected for testing. The Department did not retain copies of all reports submitted to the CDC through their reporting portal and auditors were unable to verify that reports were submitted accurately, completely, and timely. In addition, the Department was unable to provide documentation that reports had been reviewed and approved prior to submission. Cause The Department’s procedures and internal controls were not sufficient to ensure that reports were reviewed and approved prior to submission, nor that copies of submitted reports were retained Effect The accuracy, completeness and timeliness of financial and programmatic/progress reports could not be verified. A lack of review and approval of reports could allow reporting errors to go undetected and impact the CDC’s ability to monitor the program. Recommendation We recommend the Department should review and enhance controls and procedures to ensure that financial and programmatic/progress reports are reviewed and approved prior to submission. Copies of all reports should be retained and be readily available for audit. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HUMAN SERVICES ELIGIBILITY Material Weakness Material Noncompliance 2024-035 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Temporary Assistance for Needy Families (TANF) Program. ALN Number(s) 93.558 Temporary Assistance for Needy Families (TANF) Federal Award All Current Active Grants Questioned Costs $2,592 Criteria Per the Mississippi Department of Human Services TANF Policy Manual, “Current immunization is a condition of eligibility for TANF children from birth through age 17. Therefore, verification is mandatory.” Per the Mississippi Department of Human Services TANF Policy Manual, “A 25% sanction of the monthly TANF benefit will be imposed after the 30-day notification period has expired and the caretaker has failed without good cause to obtain the recommended immunizations for the children in their care. The sanction will remain in place until verification of compliance/good cause is provided for all noncompliant children in the assistance budget.” Per the Mississippi Department of Human Services TANF Policy Manual, “The age limit for a dependent child to receive a TANF benefit is 18. The child will no longer be eligible beginning with the month after his/her 18th birthday, unless the date of birth falls on the first of the month. The child must be under 18 at least one day of the month to be eligible. The date of birth must be verified for each child in the TANF assistance unit.” Per the Mississippi Department of Human Services TANF Policy Manual, “The procedures for authorization are: 1. All authorization for initial certification and subsequent determinations of eligibility and access to and availability of benefits, will be accomplished through the Authorization of Supervisor (AUSP) screen in MAVERICS. 2. The county director and his/her designee will authorize changes in eligibility and amount of benefits.” Per the Mississippi Department of Human Services TANF Policy Manual, “The monthly work stipend amount will be determined on a case-by-case basis, based on the scheduled hours per week the participant is scheduled to participate.” Per the Mississippi Department of Human Services TANF Policy Manual, “When a work stipend is authorized on TSAU, the case manager will request a full or partial payment. JAWS keeps track of the total scheduled hours range and all payments issued for the benefit month. When the case manager authorizes a payment, JAWS will calculate the appropriate payment amount based on the total scheduled hours range, deduct any previous payments for that benefit month, and pay the balance due.” Code of Federal Regulations (45 CFR 206.10(a)(1)(ii)) states the agency shall require a written application, signed under a penalty of perjury, on a form prescribed by the State agency, from the applicant himself, or his authorized representative, or, where the applicant is incompetent or incapacitated, someone acting responsibly for him. Per the Mississippi Department of Human Services TANF Policy Manual, “The appropriate application for TANF transitional services (TCC or TT) must be received within 30 days after the TANF case closes due to earned income.” Per the Mississippi Department of Human Services TANF Policy Manual, “The individual must provide documentation to verify continued employment and attendance hours as requested by the case manager, but no less than quarterly. The case manager will send a request for continued employment verification no later than the eighteenth day of the last month in the projection period.” Condition During testwork performed over eligibility requirements for the Temporary Assistance for Needy Families (TANF) Program as of June 30, 2024, the auditor tested 160 TANF payments and noted the following: • Four instances (or 3 percent) in which a child’s current immunization status was not verified within 30 days. Full TANF benefits were paid to the recipients, resulting in overpayments. • One instance (or 1 percent) in which TANF benefits were not reduced promptly once a dependent child reached 18 years old, resulting in an overpayment. • Two instances (or 1 percent) in which a TANF benefit payment was approved by an unknown authorizer. • One instance (or 1 percent) in which a transportation work stipend was overpaid based on the recipient’s scheduled hours. • Four instances (or 3 percent) in which transitional work stipends were paid to recipients without completed applications on file. • Four instances (or 3 percent) in which transitional work stipend amounts paid to recipients were incorrect based on attendance records. Two of those instances were overpayments based on hours worked while the other two instances lacked any attendance records. Cause MDHS did not have adequate internal controls to ensure compliance with eligibility requirements. Effect Failure to comply with eligibility requirements could result in ineligible beneficiaries being determined eligible, resulting in questioned costs and the possible recoupment of funds by the federal granting agency. Recommendation We recommend MDHS strengthen controls to ensure compliance with eligibility requirements of the Temporary Assistance for Needy Families (TANF) Program. Repeat Finding No. Statistically Valid Yes.
DEPARTMENT OF HUMAN SERVICES SUBRECIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2024-038 Strengthen Controls over On-Site Monitoring for the Temporary Assistance for Needy Families (TANF) Program. ALN Number(s) 93.558 Temporary Assistance for Needy Families (TANF) Federal Award All Current Active Grants Questioned Costs N/A Criteria The auditor evaluated MDHS’s compliance with subrecipient monitoring requirements based on written policies and procedures designed by MDHS’s Division of Program Integrity – Division of Monitoring (DM) to satisfy during-the-award monitoring requirements. DM procedures require: an on-site monitoring/desk reviews of all MDHS subgrants annually for programmatic and fiscal compliance. Monitoring tools/checklists are used during each on-site monitoring review to provide guidance and to document a review was performed. The on-site monitoring workpapers are reviewed and approved by DM supervisory personnel prior to issuance of a written report. The Division of Monitoring will issue an Initial Findings Letter within thirty (30) calendar days after the exit conference. The monitoring report will provide a description of each finding of noncompliance, identified questioned costs, and any required corrective action(s) to be taken by the subgrantee. The subgrantee is required to provide a written response to the Division of Monitoring within thirty (30) calendar days of receipt of the Initial Findings Letter. The written response must include a statement of whether the subgrantee agrees with the finding or not, a detailed plan of how the subgrantee will correct each individual finding, and be signed by the Authorized Official or designee. Additionally, The Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Manual specifies that a satisfactory control environment is only effective when there are adequate control activities in place. Effective control activities dictate that: the agency perform appropriate multi-level reviews over the monitoring process and the agency ensures timely communication from the subgrantees and timely resolution of findings in order to prevent; detect; and deter fraud, waste, and abuse or the misuse of federal funds. Condition When performing testwork over subrecipient on-site monitoring for state fiscal year 2023, we noted one instance out of ten subrecipients tested (or ten percent) in which the Mississippi Department of Human Services did not issue the Initial Findings Letter within 30 calendar days after the exit conference. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect MDHS programmatic funding divisions rely upon DM monitoring procedures to verify compliance with program regulations and to identify potential problem areas needing corrective action. Failure to properly monitor subrecipients in an effective manner could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in unresolved questioned costs. Recommendation We recommend the Mississippi Department of Human Services’ Division of Program Integrity – Division of Monitoring (DM) strengthen controls over subrecipient monitoring. We also recommend the Mississippi Department of Human Services’ Office of Compliance - Division of Monitoring perform monitoring reviews over subrecipients as prescribed by the Code of Federal Regulations and MDHS’ monitoring policies and procedures. Repeat Finding Yes, 2023-017, 2022-017, and 2021-013. Statistically Valid Yes.
DEPARTMENT OF HUMAN SERVICES REPORTING Material Weakness Material Noncompliance 2024-037 Strengthen Controls to Ensure Compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. ALN Number(s) 93.558 Temporary Assistance for Needy Families (TANF) 93.568 Low-Income Home Energy Assistance Program (LIHEAP) Federal Award All Current Active Grants Questioned Costs N/A Criteria The Code of Federal Regulations (2 CFR 170, Appendix A((I)(a)(2)(ii)) states a subaward must be reported in FSRS by the last day of the month following the obligation date, which is defined as the date the subaward is signed. The Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the U.S. Government Accountability Office Standards for Internal Control in the Federal Government (Green Book) specifies that a satisfactory control environment is only effective when control activities exist. This includes but is not limited to the entity determining which laws and regulations apply to the entity and setting objectives that incorporate these requirements. Condition When performing testwork related to Federal Funding Accountability and Transparency Act (FFATA) Reporting as of June 30, 2024, the auditor noted the following exceptions: • One instance (or 8 percent) for Temporary Assistance for Needy Families (TANF) in which the subaward amount reported on SAM.gov did not match the total award amount listed on the subgrant agreement. • Eight instances (or 62 percent) for Temporary Assistance for Needy Families (TANF) and six instances (or 100 percent) tested for Low-Income Energy Assistance Program (LIHEAP) in which the reports were not submitted within the required timeframe. 14 instances total shown below. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 20 0 14 1 0 Dollar Amount Tested For Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $30,263,515 $0 $26,209,720 $445 $0 Cause MDHS personnel did not ensure timely submission of FFATA reporting. Effect Failure to report any applicable awards and subawards in a timely manner resulted in MDHS being in noncompliance with federal reporting requirements. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with Federal Funding Accountability and Transparency Act (FFATA) Reporting Requirements. Repeat Finding Yes, 2023-016, 2022-019, and 2021-010. Statistically Valid Yes.
DEPARTMENT OF HUMAN SERVICES MATCHING, LEVEL OF EFFORT, EARMARKING Material Weakness Material Noncompliance 2024-036 Strengthen Controls to Ensure Compliance with Earmarking Requirements of the Child Care Development Fund. ALN Number(s) 93.489, 93.575, and 93.596 Child Care Development Fund (CCDF) Federal Award 2101MSCCDF Questioned Costs $138,329 Criteria The Code of Federal Regulations (45 CFR 98.50) states that no less than three percent shall be used to carry out activities at 98.53(a)(4) as such activities relate to the quality of care for infants and toddlers. Condition When performing testwork related to earmarking as of June 30, 2024, the auditor noted Infant and Toddler quality expenditures fell below the three percent earmarking requirement. Cause Staff were either unaware or did not follow identified policies and procedures for earmarking requirements. Effect Failure to comply with earmarking requirements could result in questioned costs and potential recoupment of funds by the federal grant agency, as well as could lead to a reduction in federal award funding in future fiscal years. Recommendation We recommend the Mississippi Department of Human Services strengthen controls to ensure compliance with earmarking requirements of the Child Care Development Fund. Repeat Finding No. Statistically Valid No.
DEPARTMENT OF HUMAN SERVICES SUBRECIPIENT MONITORING Significant Deficiency Immaterial Noncompliance 2024-039 Strengthen Controls over Subrecipient Monitoring to Ensure Compliance with Uniform Guidance Auditing Requirements. ALN Number(s) 93.558 Temporary Assistance for Needy Families (TANF) 93.489, 93.575, 93.596 Child Care Development Fund (CCDF) 93.568 Low Income Household Energy Assistance Program (LIHEAP) Federal Award No. All Current Active Grants Questioned Costs N/A Criteria Code of Federal Regulations (2 CFR 200.512(a)(1)) states the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Code of Federal Regulations (2 CFR 200.332(d)(2)) states all pass-through entities must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. Code of Federal Regulations (2 CFR 200.332(f)) states all pass-through entities must verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 200.501. Condition When performing testwork related to OMB Single Audit Monitoring as of June 30, 2024, the auditor noted the following: • Four instances (or 33.33 percent) in which there was no documentation of communication between the agency and the subrecipient regarding audit reports that had not been received within nine months of the subrecipients fiscal year-end. • One instance (or 8 percent) in which there was no documentation that a corrective action plan was provided. Cause Staff were either unaware or did not follow identified policies and procedures for monitoring requirements. Effect Failure to properly monitor subrecipients could allow noncompliance with federal regulations to occur and go undetected, potentially resulting in fraud, waste, and abuse within the agency. Recommendation We recommend the Mississippi Department of Human Services' Division of Program Integrity - Division of Monitoring (DM) strengthen controls over subrecipient monitoring for Uniform Guidance audits to ensure recipients expending $750,000 or more in Federal funds during their fiscal year are meeting Uniform Guidance Audit requirements. Repeat Finding Yes, 2023-018, 2022-018, and 2021-014. Statistically Valid Yes.
DEPARTMENT OF CHILD PROTECTIVE SERVICES ACTIVITIES ALLOWED/ALLOWABLE COSTS Significant Deficiency Immaterial Noncompliance 2024-013 Strengthen Controls to Ensure Compliance with Allowable Cost Requirements of the Foster Care Title IV-E program. ALN Number(s) 93.658 – Foster Care Title IV-E Federal Award 2403MSFOST Questioned Costs N/A Criteria Code of Federal Regulations (45 CFR 75.303(a)) non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. Management must maintain effective user access controls over financial reporting systems. This includes promptly removing or disabling access for terminated users and periodically reviewing user access to confirm it aligns with current employment status and job responsibilities. Condition Testing of IT general controls identified instances where terminated employees’ user accounts or financial application access remained active beyond the termination date. MDCPS did not disable terminated user access or remove related application rights in a timely manner. During our review of general IT controls, the auditor received a list of terminated employees. Of the 11 employees presented, 6 maintained access to MACWIS after termination. Further, during the performance of a process walkthrough, it was noted that the former chief financial officer was still active in CapPlus and SPHARS. Cause MDCPS has policies and procedures in place, but they were not executed consistently. Management did not have an effective process to ensure timely communication of terminations to IT, timely removal of access across all in scope systems, and periodic monitoring to detect and remediate terminated or inactive accounts. Effect Untimely removal of terminated user access increases the risk of unauthorized access to financial applications and financial data. This increases the risk of unauthorized transactions or changes that could result in inaccurate financial reporting and increases the risk of noncompliance with management’s access control policies. Recommendation We recommend management should implement and enforce a formal user deprovisioning process for all financial reporting applications. At a minimum, management should: 1. Require HR to notify IT immediately upon employee termination, including effective date and systems impacted. 2. Disable network and application access within a defined timeframe, such as same day or within 24 hours of termination. 3. Use a standardized termination checklist that documents removal of access for each system and requires supervisory approval. 4. Perform and document periodic user access reviews, at least quarterly, to identify and promptly remove terminated or inactive accounts. 5. Retain evidence of deprovisioning and access reviews to support monitoring and auditability. Repeat Finding No. Statistically Valid No.
DEPARTMENT OF CHILD PROTECTIVE SERVICES ACTIVITIES ALLOWED/ALLOWABLE COSTS Significant Deficiency Immaterial Noncompliance 2024-014 Strengthen Controls to Ensure Compliance with Allowable Cost Documentation Requirements of the Foster Care Title IV-E program. ALN Number(s) 93.658 – Foster Care Title IV-E Federal Award 2403MSFOST Questioned Costs N/A Criteria Code of Federal Regulations (45 CFR 1355.57(d)) a title IV-E agency must allocate project costs in accordance with applicable HHS regulations and other guidance. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. Condition The audit procedures over administrative services disclosed that MDCPS lacked proper controls over employee training costs expended through a specific vendor. Auditor noted the following exceptions in testing of administrative services for appropriate review over cost allocation. • One hundred percent of the costs charged for employee training using a specific vendor (four transactions) were tested, and four out of four transactions lacked appropriate review. Cause MDCPS has policies and procedures requiring its grant management team to review detailed documentation provided by vendors to properly support payments. It was determined that four sample items tested did not appear to provide sufficient support for approval of grant cost allocation before payment approval. Upon further audit testing and additional information requests, appropriate supporting information was subsequently provided by the vendor. Effect Unallowed costs could be charged to a federal program due to inadequately documented vendor payments. Recommendation We recommend MDCPS enforces its policy requiring approval of the grant management team’s review of appropriate detailed documentation provided by vendor payments. Repeat Finding No. Statistically Valid No.
DEPARTMENT OF CHILD PROTECTIVE SERVICES ACTIVITIES ALLOWED/ALLOWABLE COSTS Significant Deficiency Immaterial Noncompliance 2024-015 Strengthen Controls to Ensure Compliance with Allowable Cost Requirements of the Foster Care Title IV-E program. ALN Number(s) 93.658 – Foster Care Title IV-E Federal Award 2403MSFOST Questioned Costs N/A Criteria Code of Federal Regulations (45 CFR 1355.57(d)) a title IV-E agency must allocate project costs in accordance with applicable HHS regulations and other guidance. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. Condition The audit procedures over administration services disclosed that MDCPS had no formal policies and procedures over data editing or modification of the cost allocation system. Cause Access controls were not designed or maintained to limit the ability of users to edit or modify data supporting cost allocation. Effect Unmonitored access increases the risk that transactions, master data, or report inputs could be improperly created or modified. This increases the risk of unreliable cost allocation reports. Unallowed costs could be charged to a federal program due to the expenditure amount being incorrectly allocated and recorded. Recommendation We recommend MDCPS develops and formalize policies and procedures to mitigate the risk of override of control regarding the cost allocation system. Repeat Finding No. Statistically Valid No.
DEPARTMENT OF CHILD PROTECTIVE SERVICES ELIGIBILITY Significant Deficiency Immaterial Noncompliance 2024-016 Strengthen Controls to Ensure Compliance with Eligibility Requirements of the Foster Care Title IV-E program. ALN Number(s) 93.658 – Foster Care Title IV-E Federal Award 2403MSFOST Questioned Costs N/A Criteria Code of Federal Regulations (45 CFR 75.1356.21, .22, and .30) a title IV-E agency must determine eligibility of foster homes and foster children prior to providing foster care maintenance payments. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. MDCPS policies and procedures require a two-level approval for child eligibility determinations. A Social Worker completes an eligibility packet for each child and signs off before submitting the eligibility packet to the Eligibility department. An Eligibility Worker reviews and approves the eligibility packets prior to submitting the packet for the Eligibility Supervisor’s review. The Eligibility Supervisor makes the necessary adjustments prior to final approval. Condition The audit procedures over eligibility packets disclosed a lack of approval from the Social Worker and second-level approval from the Eligibility Supervisor. The auditor noted the following exceptions: • Eleven of forty sample items did not have proper Social Worker sign off. • Twenty-eight of forty sample items had only one level of approval documented. All eligibility determinations included at least one level of approval, but MCDPS's policies were not implemented consistently. Cause The policies and procedures for child eligibility determinations were not appropriately followed. Effect Unallowed costs could be charged to a federal program because of the undocumented review and approval of eligible children. Recommendation We recommend MDCPS enforces its policy requiring approval of eligibility packets to ensure all eligibility packets are complete and accurate Repeat Finding No. Statistically Valid No.
DEPARTMENT OF CHILD PROTECTIVE SERVICES SPECIAL TESTS AND PROVISIONS Significant Deficiency Immaterial Noncompliance 2024-017 Strengthen Controls to Ensure Compliance with Payment Rate Setting Requirements of the Foster Care Title IV-E program. ALN Number(s) 93.658 – Foster Care Title IV-E Federal Award 2403MSFOST Questioned Costs N/A Criteria Code of Federal Regulations (45 CFR 75.1356.21(m)(1), in meeting the requirements of section 471(a)(11) of the Act, the title IV-E agency must review at reasonable, specific, time-limited periods, to be established by the agency, the amount of the payments made for foster care maintenance to assure their continued appropriateness, and that the amount made to a licensed or approved relative or kinship foster family home is the same as the amount that would have been made if the child was placed in a licensed or approved non-relative foster family home. Based on the Olivia Y. Lawsuit’s Mississippi Settlement Agreement and Reform Plan, MDCPS is required to review and publish updated foster board payment rates every two years. Per 45 CFR 75.303(a), non-Federal entities expending HHS awards must establish and maintain effective internal controls over compliance with Federal states, regulations, and the terms and conditions of the Federal award. Condition The audit procedures over foster care board payments disclosed that the approved payment board rates were unattainable. The rates had not been updated from the rate approved in 2019 and no documentation could be provided for the required biannual review. Further, the rate applied for children aged 0 – 8 were not the most recent approved rates resulting in underpayments to foster families. The auditor noted the following exceptions: • One of ten rate categories did not have the proper rate applied based on provided board rates resulting in twenty-six of forty sample payment items being underpaid. • MDCPS did not maintain adequate documentation for the required rate review. Cause The policies and procedures for foster care board payments were not appropriately followed. Effect Unallowed costs could be charged to a federal program because of the undocumented foster care board payments. Recommendation We recommend MDCPS enforce its policy requiring daily per diem rates to be approved by the Chief Administrative Officer and Commissioner and to ensure proper allocation. Repeat Finding No. Statistically Valid No.
DIVISION OF MEDICAID ELIGIBILITY Material Weakness Material Noncompliance 2024-021 Strengthen Controls to Ensure Compliance with Eligibility Requirements of CHIP and the Medical Assistance Program. ALN Number(s) 93.767 – CHIP 93.778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Questioned Costs $27,314 Criteria Code of Federal Regulations (42 CFR 435.948(a)(1)) states, “The agency must in accordance with this section request the following information relating to financial eligibility from other agencies in the State and other States and Federal programs to the extent the agency determines such information is useful to verifying the financial eligibility of an individual: Information related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act." Code of Federal Regulations (42 CFR 435.949(b)) states, "To the extent that information related to eligibility for Medicaid is available through the electronic service established by the Secretary, States must obtain the information through such service, subject to the requirements in subpart C of part 433 of this chapter, except as provided for in 435.945(k) of this subpart." The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin -Subject: MAGI-Based Eligibility Verification Plans states, "To the extent that information related to Medicaid or CHIP eligibility is available through the electronic data services hub established by the Secretary, states must obtain the information through this data services hub. Subject to Secretarial approval and the conditions described in 435.945(k) and 457.380(i), states can obtain information through a mechanism other than the data services hub." The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 201.03.04A requires the use of the individual's most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, a partner in a business or one who has income from a partnership, LLP, LLC or S Corporation. Per the Mississippi Division of Medicaid MAGI based Eligibility Verification Plan, Mississippi Division of Medicaid has determined Mississippi Department of Employment Security (MDES) to be a useful electronic data source. Per the Mississippi Medicaid State Plan Attachment 4.32-A, applicants are submitted weekly to MDES to verify wage and unemployment benefits. Renewals are submitted once per month for the same data. Renewal files are processed in the month prior to the scheduled review due date. Code of Federal Regulations (42 CFR 435.914(a)) states, “The agency must include in each applicant's and beneficiary's case record the information and documentation described in 431.17(b)(1) of this chapter.” Per Code of Federal Regulations (42 CFR 431.17(b)(1)), a State plan must provide that the Medicaid agency will maintain or supervise the maintenance of the records necessary for the proper and efficient operation of the plan. The records must include individual records on each applicant and beneficiary that contain all information provided on the initial application submitted through any modality described in 435.907 of this chapter by, or on behalf of, the applicant or beneficiary, including the signature on and date of application. Further, the records must contain the disposition of income and eligibility verification information received under 435.940 through 435.960 of this chapter, including evidence that no information was returned from an electronic data source. The Mississippi Division of Medicaid Eligibility Policy and Procedures Manual Section 101.08.01 states, “All cases must be thoroughly documented. Documentation is the written record of all information pertaining to the eligibility decision. Case documentation includes the completed application form, the specialist’s verbal and written contacts with the applicant, information requested and received from electronic data sources, the applicant or third-party sources, such as governmental or nongovernmental agencies, businesses and individuals, and notification of the eligibility decision." Miss. Code Ann (1972) Section 43-13-116.1(2) states, “In accordance with Section 1940 of the federal Social Security Act (42 USCS Section 1396w), the Division of Medicaid shall implement an asset verification program requiring each applicant for or recipient of Medicaid assistance on the basis of being aged, blind or disabled, to provide authorization by the applicant or recipient, their spouse, and by any other person whose resources are required by law to be disclosed to determine the eligibility of the applicant or recipient for Medicaid assistance, for the division to obtain from any financial institution financial records and information held by any such financial institution with respect to the applicant, recipient, spouse or such other person, as applicable, that the division determines are needed to verify the financial resources of the applicant, recipient or such other person in connection with a determination or redetermination with respect to eligibility for, or the amount or extent of, Medicaid assistance. Each aged, blind or disabled Medicaid applicant or recipient, their spouse, and any other applicable person described in this section shall provide authorization (as specified by 42 USCS Section 1396w(c)) to the division to obtain from any financial institution, any financial record, whenever the division determines that the record is needed in connection with a determination or redetermination of eligibility for Medicaid assistance.” The Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03 states, "Section 1940 of the Social Security Act and Mississippi state law requires the verification of liquid assets held in financial institutions for purposes of determining Medicaid eligibility for applicants and beneficiaries in programs with an asset test, i.e., Aged, Blind, and Disabled (ABD) Medicaid programs." Per the Mississippi Division of Medicaid Eligibility Policy and Procedure Manual Section 303.03, implementation of MDOM's Asset Verification System (AVS) is on/after November 1, 2018. The AVS contractor will perform electronic matches with financial institutions to detect and verify bank accounts based on identifiers including Social Security Numbers for the following COEs: 010 through 015, 019, 025, 045, 062 through 066, and 094 through 096. At each application and redetermination, a request will be submitted through A VS for information on an individual's financial accounts. The AVS must be used as a primary data source when verifying resources. Code of Federal Regulations (42 CFR 435.945(d)) states, "All State eligibility determination systems must conduct data matching through the Public Assistance Reporting Information System (PARIS)." The Mississippi Division of Medicaid MAGI-Based Eligibility Verification Plan states, "The state uses quarterly PARIS data matches to resolve duplicate Medicaid participation in another state and residency discrepancies." Per the Mississippi Medicaid State Plan Attachment 4.32-A, quarterly file transmissions of Medicaid recipients active in the previous quarter are submitted for matching purposes with applicable federal databases (PARIS) to identify benefit information on matching Federal civilian employees and military members, both active and retired, and to identify duplicate participation across state lines. Condition During testwork performed over eligibility requirements for CHIP and the Medical Assistance Program as of June 30, 2024, the auditor tested 300 total beneficiaries (180 Modified Adjusted Gross Income (MAGI) beneficiaries and 120 aged, blind, and disabled (ABD) beneficiaries) and noted the following: • Mississippi Division of Medicaid (MDOM) did not use federal tax and/or state tax returns to verify income, including self-employment income, out-of-state income, and various types of unearned income when these types of income were not reported by the beneficiary. The Medicaid State Plan requires the verification of all income for MAGI-based eligibility determinations, and MDOM' s Eligibility Policy and Procedure Manual (Section 201.03.04a) requires the use of an individual's most recent tax return to verify self-employment income. This section further states, if tax returns are not filed, not available, or if there is a change in income anticipated for the current tax year, refer to Chapter 200, Net Earnings from Self-Employment at 200.09.08, for policy on estimating net earnings from self-employment. The MDOM's State Plan does not allow for accepting self-attested income. Therefore, if an applicant indicates zero for self-employment income, the amount of zero must be verified like any other income amount. • Three of the 180 MAGI beneficiaries (or 1.66 percent) reported self-employment income, out-of-state income, or unearned income on the Mississippi income tax return, but the income was not reported on the recipient’s application. Of the three instances, two instances (or .66 percent) were noted in which the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient’s category of eligibility. • One of the 180 MAGI beneficiaries (.05 percent) reported self-employment income to MDOM, but MDOM recorded this income as wages and therefore did not request a tax return from the recipient. In this instance (or 100 percent) the total income per the most recent tax return available at the time of determination exceeded the applicable income limit for the recipient’s category of eligibility. Due to MDOM not verifying self-employment income on the applicant’s tax return, MDOM was not aware income exceeded eligibility limits, and did not request any additional information that might have explained why income was not self-reported; therefore, the auditor could not determine with certainty that individuals are in fact ineligible. However, information that MDOM used at the time of the eligibility determination did not support eligibility. The auditor acknowledges that the self-employment income reported on the income tax returns does not, in and of itself, make the three cited beneficiaries ineligible. However, it does indicate that they had self-employment income during the year of eligibility determination that was potentially inaccurately reported on their application. Furthermore, MDOM did not perform any procedures to verify that zero self-employment income reported on the applications was accurate. MDOM's policy requires the use of the individual’s most recent tax return to verify income for individuals considered self-employed, a shareholder in an S Corporation, or a partner in a business or one who has income from a partnership LLP, LLC, or S Corporation. Due to the timing of tax returns filings, including allowable extensions, MDOM requires the use of prior year income verification in these circumstances. The auditor used tax return data from 2022 and 2023 for 2024 determinations. The fiscal year payments for these three beneficiaries that might not have been eligible to receive benefits totaled $4,664 of questioned cost. Based on the error rate calculated using the sampled fee for service (FFS) and capitation payments, the projected amount of payments made for beneficiaries who it is reasonably possible were ineligible is $13,885,515. The following is a breakdown projected costs for 2024 by category: CHIP: $1,971,277 MAGI Managed Care: $11,884,238 • For six of the 180 MAGI beneficiaries (or 2 percent), income was not verified through Mississippi Department of Employment Security (MDES) at the time of the redetermination for the eligibility period during SFY24. This resulted in questioned costs of $7,606. Questioned costs were not projected for this item due to the inability to statistically validate the sample. • For 12 of the 300 beneficiaries (or 4 percent), the beneficiary's case file did not contain a completed application. Of these 12, Medicaid was unable to provide auditors with any documentation from the case files for six beneficiaries (2 percent). This resulted in questioned cost of $2,776 for the six beneficiaries with no file. Questioned costs were not projected for this item due to the inability to statistically validate the sample. • Seventy ABD beneficiaries required resource verifications through the Asset Verification System (AVS). Of the 70 beneficiaries, one instance (1.43 percent) was identified in which resources were not verified through AVS at the time of redetermination. This resulted in questioned costs of $12,269. Questioned costs were not projected for this item due to the inability to statistically validate the sample. • Out of 300 beneficiaries, 135 (45 percent) were not included on all required quarterly Public Assistance Reporting Information System (PARIS) file transmissions for fiscal year 2024. Cause MDOM did not have adequate internal controls to ensure compliance with eligibility requirements. Additionally, MDOM did not have policies in place to verify certain types of income on applicant's tax returns, as required by its own policy and procedures, for eligibility determinations. Effect Failure to comply with eligibility requirements could result in ineligible beneficiaries being determined eligible, resulting in questioned costs and the possible recoupment of funds by the federal granting agency. Recommendation We recommend MDOM strengthen controls to ensure compliance with eligibility requirements of CHIP and the Medical Assistance Program. Repeat Finding Yes, 2023-024, 2022-025, 2021-041, 2020-042 and 2019-027. Statistically Valid Portions of this finding were based on statistically valid samples.
DIVISION OF MEDICAID SPECIAL TESTS AND PROVISIONS Material Weakness Material Noncompliance 2024-023 Strengthen Controls to Ensure Compliance with Provider Eligibility Requirements of CHIP and the Medical Assistance Program. ALN Number(s) 93.767 – CHIP 93.778 - Medical Assistance Program (Medicaid; Title XIX) Federal Award No. All Current Active Grants Questioned Costs N/A Criteria Code of Federal Regulations (42 CFR 455.460(a)) requires that the State Medicaid agency collect an application fee from institutional providers on or after March 25, 2011, unless an exception applies. However, MDOM policy did not implement fee collection until 2022. Code of Federal Regulations (42 CFR 455.412) states, “The survey agency must a) Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. b) Confirm that the provider's license has not expired and that there are no current limitations on the provider's license.” Code of Federal Regulations (42 CFR 455.436) states, “The State Medicaid agency must do all of the following: a) Confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. b) Check the Social Security Administration's Death Master File, the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. c) (1) Consult appropriate databases to confirm identity upon enrollment and reenrollment; and (2) Check the LEIE and EPLS no less frequently than monthly. Code of Federal Regulations (42 CFR 455.104 and 455.440) require MDOM to collect a provider’s National Provider Identifier (NPI) during the enrollment process. Code of Federal Regulations (42 CFR 455.104, 455.105, and 455.106) require providers to disclose complete information on ownership, control, and managing employees during enrollment. Code of Federal Regulations (42 CFR 455.432, 455.434, and 455.450) require MDOM to conduct specific screening procedures based on a provider’s risk level, including site visits for moderate- and high-risk providers and fingerprint-based background checks for high-risk providers. Basic screening requirements, such as license verification and sanction checks, apply to all providers regardless of risk level. Condition During testwork performed on the Special Tests and Provisions – Provider Eligibility requirements for the Medical Assistance Program and CHIP as of June 30, 2024, the auditor noted the following areas: • Two instances in which there was no documentation that the required application fee was collected from applicable providers. • 38 instances in which there was no documentation that MDOM or its contracted entities confirmed that the provider’s medical license was current and free of limitations, as required prior to approval of the application. Of the 38 instances, 33 instances occurred for provider applications or revalidations submitted since Gainwell has served as the fiscal agent. • 31 instances in which there was no documentation of review prior to approval of the provider’s application. Of the 31, eight occurred since Gainwell has served as the fiscal agent. • Ten instances in which there was no documentation that MDOM or its contracted entities verified the identity and exclusion status of providers and associated individuals using the required federal databases prior to application approval. • Four instances in which there was no documentation that MDOM or its contracted entities performed the OIG exclusion checks prior to approval of the provider application. • Two instances in which there was no documentation that MDOM or its contracted entities collected the provider’s NPI. • Eight instances in which there was missing or incomplete documentation for the required disclosure details of ownership, control, and managing employees. • Four instances in which there was no documentation that the required screening procedures—whether limited or enhanced—were completed in accordance with the provider’s designated risk level. Cause Insufficient oversight and inconsistent provider enrollment and documentation processes. Effect The lack of documentation and incomplete screening increases the risk of enrolling providers who are unqualified, excluded, or otherwise ineligible to participate in the Medicaid or CHIP programs. This exposes the programs to potential fraud and improper payments. Recommendation We recommend that MDOM strengthen controls to ensure compliance with reporting requirements of CHIP and the Medical Assistance Program. Repeat Finding No. Statistically Valid Yes.
DIVISION OF MEDICAID SPECIAL TESTS AND PROVISIONS Material Weakness Material Noncompliance 2024-022 Strengthen Controls to Ensure Compliance with Provider Health and Safety Standards Requirements of the Medical Assistance Program. ALN Number(s) 93.796 – State Survey Certification of Health Care Providers and Supplies (Title XIX) Medicaid Federal Award No. All Current Active Grants Questioned Costs N/A Criteria Code of Federal Regulations (42 CFR 488.308(a)) states, “The survey agency must conduct a standard survey of each Skilled Nursing Facility (SNF) and Nursing Facility (NF) not later than 15 months after the last day of the previous standard survey.” Code of Federal Regulations (42 CFR 488.308(b)(1)) states, “The statewide average interval between standard surveys must be 12 months or less, computed in accordance with paragraph (d) of this section.” Code of Federal Regulations (42 CFR 488.308(d)) states, “The statewide average interval is computed at the end of each Federal fiscal year by comparing the last day of the most recent standard survey for each participating facility to the last day of each facility's previous standard survey.” Condition During testwork performed on the Special Tests and Provisions – Provider Health and Safety Standards requirements for the Medical Assistance Program as of June 30, 2024, the auditor noted the following: • There were 131 out of 196 nursing facilities that accept Medicaid did not have the mandatory health and safety survey performed within the required 15.9-month survey interval. • The statewide average survey interval for all nursing home facilities was 20.37 months, which exceeds the required 12-month average interval between surveys. Cause Staffing shorting resulting in a limited number qualified surveyors at the State Survey Agency. Effect Failure to conduct surveys in a timely manner may result in health and safety violations going undetected. Recommendation We recommend that MDOM strengthen controls to ensure surveys are conducted in a timely manner in accordance with the provider health and safety standards requirements of the Medical Assistance Program. Repeat Finding No. Statistically Valid Yes.