Audit 407456

Finding 2025-001 - Significant Deficiency in Internal Control over Compliance Federal Program: Assistance Listing Number 93.590, Community-Based Child Abuse Prevention Grants, Federal Award Identification Number 2302TXBCAP, U.S. Department of Health and Human Services, Passed through Texas Health and Human Services Commission - Contract Number HHS001391700004. Criteria: The entity must establish and maintain effective internal control to provide reasonable assurance that only eligible individuals receive assistance or services under the federal award program. Condition: One of the conditions for eligibility in the Fatherhood: Educating Fathers for Empowering Children Tomorrow (EFFECT) grant program is that the participant’s family must exhibit at least two priority characteristics as described in the EFFECT grant agreement. To assist in determining eligibility for the EFFECT grant program, DePelchin utilizes a Client Registration Form. We selected a sample of 25 out of 251 participants within the EFFECT grant program for testing. We noted that for 11 of the 25 participants, the “Priority Characteristics” section of the Client Registration Form did not indicate that the participant’s family had at least two priority characteristics. Additional information has been provided to the auditor to support that these 11 participants were eligible to participate in the EFFECT grant program. Cause: The previous contract cycle only required one priority characteristic. This contract cycle changed to requiring two priority characteristics. Within this contract cycle, the State of Texas (the State) provided DePelchin with a new Client Registration Form. The new Client Registration Form was changed such that “two or more” priority characteristics must be self-identified by the individual for participation in the program. This change from the previous Client Registration Form was not highlighted by the State and was not identified as a change by DePelchin’s program staff. In addition, the State’s Prevention and Early Intervention Reporting (PEIR) System did not require validation of the presence of two priority characteristics for enrollment until fall 2025. Potential Effect: Lack of properly completed and reviewed Client Registration Form could lead to ineligible individuals receiving benefits. Questioned Costs: None. Recommendation: We recommend that a process be developed to ensure proper review of the Client Registration Form by the organization’s staff and that when questions are unanswered or sections incomplete, additional information be obtained and maintained with the Client Registration Form. Views of Responsible Officials: DePelchin recognizes that the change in eligibility requirements should have been timely identified and incorporated into our internal control over eligibility compliance process. In October 2025, through the use of the State’s PEIR system, it became apparent that the participant must self-identify a minimum of two priority characteristics. As a result, the program staff reexamined the eligibility requirements and identified the discrepancy. To determine whether compliance issues were associated with this discrepancy, management conducted a comprehensive review of all participant enrollment forms within the program. Based on this review, management concluded that the issue was limited to the documentation of participant self-selected priority characteristics and that while the self-selection on some Client Registration Forms reflected fewer than the required two priority characteristics, participant records contained sufficient documentation to demonstrate that eligibility requirements were in fact met for all participants in the program. DePelchin has since implemented an internal review process whereby a grant specialist on the evaluation team conducts a monthly review of all enrollments to verify that eligibility requirements, including priority characteristics and service area criteria, have been met. Program staff, evaluation staff, and data team members have been provided additional training on the applicable eligibility requirements and documentation standards. Additionally, DePelchin has implemented an annual cross-functional review process involving program leadership, evaluation staff, and fiscal representatives to review eligibility requirements and key contract provisions prior to the start of each fiscal year. This review is intended to ensure that any changes in program requirements are identified, communicated, and incorporated into program operations in a timely manner. Based on these corrective actions and enhanced monitoring procedures, DePelchin believes the risk of similar eligibility documentation issues has been substantially mitigated.