Audit 406726

Finding: Eligibility Federal Assistance Listing Number 93.558 - Temporary Assistance for Needy Families (TANF) Federal Agency - Department of Health and Human Services, Passed-Through Colorado Department of Human Services Award Number - None Provided; Award Year 2025 Criteria or Specific Requirement: The Temporary Assistance for Needy Families (TANF) program is governed by eligibility requirements established under the Social Security Act, applicable federal regulations (45 CFR Part 260-265), and corresponding State of Colorado policies. Pursuant to Uniform Guidance at 2 CFR §200.303, the County is required to establish and maintain effective internal controls over compliance to provide reasonable assurance that TANF eligibility determinations comply with all applicable federal statutes, regulations, and the terms and conditions of the federal award. All eligibility determinations must be fully supported by complete and accurate documentation and input correctly into the Colorado Benefits Management System (CBMS). Condition: We noted the following issues in the 25 cases tested: - One instance in which client income was incorrectly entered and as such, was ineligible for benefits as they were over the income limits for all of 2025. - Three instances in which, although case notes indicated general contact with the participant, the County did not retain sufficient documentation that a required meeting specifically addressed or confirmed engagement in an eligible work activity or was completed within required timeframe. Questioned Costs: $8,169 of known questioned costs were determined by isolating the benefits issued in 2025 for the client who was over income limits. Context: We tested 25 cases that received TANF assistance for the year ended December 31, 2025, and noted the issues described above. The tested sample represented approximately $145,000 in benefits issued. The total population consisted of approximately $6.3 million in benefits issued to approximately 2,013 clients. A non-statistical sampling methodology was used to select the sample. Effect: The absence of appropriate controls related to the above requirements increases the risk of incorrect benefit payments or the provision of inappropriate services to clients. Cause: There was a misunderstanding at the staff level of subsidized and unsubsidized employment income and the implications on TANF eligibility. In addition, there was inconsistent contact between the County and clients which resulted in incomplete documentation as required by State rule and County policy. Recommendation: We recommend that the County continue to strengthen internal controls related to eligibility determinations. This includes issuing training alerts related to the differences between subsidized and unsubsidized employment income and the impacts to eligibility. Additionally, we recommend continued periodic quality assurance reviews of TANF case files to ensure ongoing compliance with federal and state eligibility requirements and identification of employees with performance issues. Finally, we recommend the County develop monitoring reports to identify those clients who have not had a workforce contact in the required timeframe. Views of Responsible Officials: We agree with the finding. See separate report for planned corrective actions.