Audit 407616

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program Cluster Assistance Listing Number: 93.224 / 93.527 Federal Award Identification Number and Year: H8000028 – 2024 Pass-Through Agency: Not Applicable Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award states that Health centers must prepare and apply a sliding fee discount schedule (SFDS) so that amounts owed for health center services by eligible patients are adjusted based on the patient’s ability to pay, including: (a) discounts applied to individuals/families with annual incomes at or below 200% of Federal Poverty Guidelines (FPG); (b) full discount or nominal charge for individuals/families at or below 100% of FPG; (c) discounts based on gradations in family size and income for those above 100% and at or below 200% of FPG; and (d) no discount applied for those above 200% of FPG. Condition: During our testing, we noted the following two instances of noncompliance in the sample of forty patient files tested: •In one patient file selected for testing, the sliding fee discount applied was incorrect due to the patient’s income not being entered correctly in Epic, resulting in an inaccurate FPL calculation and associated discount classification. •In one patient file selected for testing, based on support provided and the SFDS, an incorrect discount class was applied and the County was not able to provide documentation demonstrating how annual income/household size supported the applied discount classification. Questioned costs: None Context: The eligible individuals consist of one population, and a total of 40 patients were selected from the health care system. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 40 selections, errors were noted in two of the cases (see condition section above for more detail). Cause: The root cause of this finding is the inconsistent application of the defined “annual income” standard for low‑income patients and household size across the team. For patients with unstable employment or multiple income sources, annual income calculations were not applied consistently, resulting in inaccuracies and inconsistent approach. Effect: Improper calculation of patient's income/improper input of patient's income to the EPIC system causes the improper sliding fee discount to be applied to their account. This could cause the County to not follow their sliding fee discount scale and patients paying incorrect amounts for services provided. Repeat Finding: No Recommendation: We recommend NorthPoint continue to implement their new automated process of uploading applications to EPIC to avoid human error when it comes to income amounts. We also recommend that NorthPoint creates more procedures/policy over documentation of the income calculations/conversation that takes place with the patient. Views of responsible officials: Hennepin County has reviewed and agrees with the findings and recommendations.

Federal Agency: U.S. Department of Agriculture Federal Program Name: Supplemental Nutrition Assistance Program (SNAP) Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 212MN101S2514; 212MN101S2520; 212MN127Q7503 - 2025 Pass-Through Agency: Minnesota Department of Agriculture Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award 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. Condition: During our testing, we noted the following instance of noncompliance in the sample of sixty case files tested: •One MAXIS case file did not have a re-determination of eligibility performed within the 12-month period. •One MAXIS case file did not have documentation of income verification. Questioned costs: None Context: The State of Minnesota Department of Agriculture contracts with county social services departments to perform the “intake function” (meeting with the social services client to determine income and categorical eligibility), while the State maintains the MAXIS system, which determine eligibility. Participants receive benefit payments from the state. The eligible individuals consist of one population, and a total of 60 enrolled persons were selected. The sample sizes were based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Of the 60 selections, errors were noted in two of the cases (see condition section above for more detail). Cause: Instances of non-compliance were the result of: •Agency entry error in MAXIS system when converting an MFIP case to SNAP, resulting in an incorrect recertification period to be established for SNAP greater than 12 months from the previous certification date. •Agency failure to request mandatory verification of reported income/change to income in addition to a failure to update MAXIS system with reported income change. Effect: Although not found during our testing, benefits paid for participants in the program by the State of Minnesota may have paid for ineligible participants or paid the incorrect amount. Repeat Finding: Yes, 2024-002. Recommendation: We recommend the County strengthen internal controls over inputs used to determine eligibility to ensure they are correctly entered and the information required by the contract is retained in the County’s records. Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.

Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Foster Care Title IV-E Program Assistance Listing Number: 10.561; 93.778; 93.658 Federal Award Identification Number and Year: 212MN101S2514;212MN101S2520; 212MN127Q7503– 2025; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP– 2025 2101MNFOST; IVE2501MNFOST; MA505MN5ADM – 2025 Pass-Through Agency: Minnesota Department of Health Human Services and Minnesota Department of Agriculture Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: 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 nonfederal entity; (iii)Reasonably reflect the total activity for which the employee is compensated by the nonfederal entity, (iv)Encompass both federally assisted and all other activities compensated by the nonfederal entity on an integrated basis, but may include the use of subsidiary records as defined in the nonfederal entity's written policy; (v)Comply with the established accounting policies and practices of the nonfederal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii)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 nonfederal 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. (viii)Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A)The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the nonfederal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The nonfederal entity's system of internal controls includes processes to review after-the-fact interim charges made to a federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition: During our testing of 1,524 and 1,521 random moment study participants reported in quarters one and two, respectively, two individuals were reported on the first quarter time study report that were terminated or resigned prior to the start of the respective quarter. Questioned costs: None Context: It was noted that for one of the two random moment study submissions tested as part of our sample, two individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters. Cause: The implementation of a new Employee Position Directory disrupted the previous method of receiving notification of staff resignations and terminations. A new method of receiving notification was put in place in July 2025. The two individuals that were identified were in quarters prior to implementation of the new notification method. Effect: The County reported to the State of Minnesota employees previously terminated or resigned which were subject to the random moment surveys the State Department of Health and Human Services conducts. Repeat Finding: Yes; 2024-004 Recommendation: We recommend the County reviews its procedures for giving timely notice of an individual’s termination or resignation to other departments as well as ensuring departments are reviewing for accuracy the information provided to granting agencies. Views of responsible officials: Hennepin County has reviewed and agrees with the finding and recommendation.