2024-007 Eligibility – MAXIS Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Grants to States for Medicaid Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ citizenship verification and asset verification. Minnesota Statutes, section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Wilkin County to support the eligibility determination process. In the participant files reviewed for eligibility, not all documentation to support participant eligibility was available, updated, or input correctly. The following exceptions were noted in the sample of 40 participant files tested: • three participants’ citizenship information did not have the birth certificate in the file; and • one participant’s asset information did not match the documentation in the file, and three participant files did not have supporting asset documentation in the file. Questioned Costs: Not applicable. The County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and the County split the eligibility determination process. Pursuant to Minnesota statutes, Wilkin County performs the “intake function” needed for this program, while the State maintains the MAXIS systems, which supports the eligibility determination process. Participants receive benefit payments from the State. The population consisted of 336 active MAXIS participant cases enrolled in Grants to States for Medicaid in 2024; the sample size was 40 participant files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The improper input or updating of information into MAXIS and the lack of verification or follow-up of eligibility-determining factors increase the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case file information into MAXIS did not ensure all required information was input or updated correctly, supported, and retained. Recommendation: We recommend Wilkin County implement additional procedures to provide reasonable assurance that all documentation needed to support eligibility determinations exists, the program personnel properly input or update the documentation in MAXIS, and the program personnel follow up on issues in a timely manner. In addition, Wilkin County should consider providing further training to program personnel. View of Responsible Official: Concur
2024-008 Suspension and Debarment Prior Year Finding Number: 2023-002 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP2411; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For the two covered transactions tested, the County did not maintain documentation of verification that the vendors were not suspended or debarred prior to entering into the covered transactions. Questioned Costs: $187,679; known questioned costs were determined based on payments to the two vendors tested. Context: During the year, the County entered into three covered transactions using COVID-19 – Coronavirus State and Local Fiscal Recovery Funds. The covered transactions totaled $222,953. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County indicated significant staff turnover in key positions. The previous staff were not available to locate the documentation. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Concur
2024-006 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Grants to States for Medicaid Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations §§ 200.403(a) and 200.403(g) require costs to be necessary and reasonable, and be adequately documented. For federal awards received from the Minnesota Department of Human Services (DHS), internal controls should be established and maintained to provide assurance that program reports submitted to DHS are completed and documented in accordance with DHS reporting instructions. As part of Wilkin County’s reporting requirements, the Public Health Department submits the Local Collaborative Time Study (LCTS) Public Health Cost Schedule DHS-3220.3 on a quarterly basis. Condition: The County did not maintain adequate support for the reported payroll amounts on LCTS Public Health Cost Schedule DHS-3220.3 reports tested. The reports also had no documentation of review. Questioned Costs: $329,183; known questioned costs were determined based on the payroll costs from each of the four LCTS Public Health Cost Schedule DHS-3220.3 reports. Context: Minnesota DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to Wilkin County are for applicable federal program activities/costs. Total expenditures reported on the Schedule of Expenditures of Federal Awards are $416,193. Amounts reported on the DHS-2550, DHS-2556, and LCTS Public Health Cost Schedule DHS-3220.3 reports were $759,694, $1,879,054, and $379,254, respectively. The State of Minnesota determines the reimbursement of reported expenditures. The reporting population consisted of four quarterly DHS-2550, DHS-2556, and LCTS Public Health Cost Schedule DHS-3220.3 reports; and originally a sample of two of each report type was selected for report testing. Additionally, a sample of 40 expenditures were selected for testing, which included five LCTS Public Health Cost Schedule DHS-3220.3 expenditures for testing. Payroll reported expenditure testing relating to the LCTS Public Health Cost Schedule DHS-3220.3 was expanded to cover payroll expenditures of all four quarters.The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits, and subsequently expanded. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The employee who prepared the reports and the supporting documentation left the County in 2025. The supporting documentation could not be located. Recommendation: We recommend the County implement controls to ensure activities allowed and allowable costs are appropriately identified and accurately reported to DHS in accordance with federal program guidance and DHS instructions, including that reports are reviewed by someone other than the preparer. We also recommend the County correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reporting incorrectly. View of Responsible Official: Concur
2024-009 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP2411; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The U.S. Department of the Treasury requires recipients of funds to submit Project and Expenditure Reports that include, by project, current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures. The frequency of reporting is dependent on the size of the entity and amount of funding received. Condition: The County understated current period expenditures reported, and cumulative expenditures reported on the annual Project and Expenditure Report submitted to the U.S. Department of the Treasury by $182,285. Also, the County did not submit the annual Project and Expenditure Report by the federal deadline of April 30, 2024. Questioned Costs: None. Context: The County opted to spend the COVID-19 – Coronavirus State and Local Fiscal Recovery Funds award under the Revenue Replacement category, which allows spending on broader types of government services. The annual Project and Expenditure Report required to be submitted to the U.S. Department of the Treasury by April 30 of each year for the reporting period ending March 31 was submitted August 14, 2024. Effect: The County is not in compliance with federal reporting requirements. Cause: The County indicated difficulty tracking project expenditures due to staff turnover. Recommendation: We recommend the County review the U.S. Department of the Treasury’s guidance and form instructions to ensure accurate reporting of COVID-19 – Coronavirus State and Local Fiscal Recovery Funds activity. We also recommend the County submit future Project and Expenditure Reports by the federal deadline. View of Responsible Official: Concur