Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch; ? 95% of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 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: The Division did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Forty cases were selected for testing. The Division did not meet the required time limits for closing cases within 60, 90, or 120 days. Specifically, we noted the following exceptions: ? 48% of cases tested (19 of 40 cases) were closed within 60 days which is less than the required 70% ? 63% of cases tested (25 of 40 cases) were closed within 90 days which is less than the required 95% ? 73% of cases tested (29 of 40 cases) were closed within 120 days which is less than the required 98% ? The remaining 28% of cases tested (11 of 40 cases) were closed between 141 and 277 days. Questioned costs: Undetermined. Cause: The Division experienced staffing shortages and other pressures related to the COVID-19 pandemic which impacted its ability to meet the required BAM investigation time limits for closing cases. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395. Views of responsible officials: The BAM Unit experienced high turnover volumes during the pandemic, creating a backlog of UI Benefit investigations. The pandemic also changed the workforce dynamic, creating a culture of fully remote jobs in many job markets, which left most State agencies struggling to fill positions; because of this, State Government lost its competitive edge as an employer, resulting in low applicant response to job postings. It took the BAM unit several job reposting?s to get vacancies filled. However, we have filled most of the vacancies and will conduct interviews on Friday, 03/24/23, to fill the remaining two vacancies in the unit. We also recently made a change to our training strategy. There will be consecutive weeks of training in a classroom setting, along with OTJT. The BAM unit also assigns all available NASWA training to new hires during their first weeks of employment. We chose this training strategy to provide all new hires with consistent training to ensure understanding of the BAM investigative process. In addition, we will be hiring a Sr. accountant who will focus on all backlog items only. We are also in the process of converting all paper-driven methods to fully electronic ones. All BAM employees will receive the necessary tools, training, and work-from-home equipment for working successfully from home, allowing us to maintain production in case of another catastrophic event.
Reference Number: 2022-005 Prior Year Finding: 2021-005 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? Employer Experience Rating Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Certain benefits accrue to states and employers as a result of the state having a federally approved experience-rated UI tax system. All states currently have an approved system. For the purpose of proper administration of the system, the SWA maintains accounts, or subsidiary ledgers, on a state UI taxes received or due from individual employers, and the UI benefits charged to the employer. The employer?s ?experience? with the unemployment of former employees is the dominant factor in the SWA computation of the employer?s annual state UI tax rate. The computation of the employer?s annual tax rate is based on state UI law (26 USC 3303). Control: Per 2 CFR section 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 be in compliance 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: The Division incorrectly calculated employer experience ratings. Quarterly tax reports contained employer payments that were made at a rate inconsistent with the assigned contribution rate. Context: Exceptions noted in 19 of 60 employer experience rates selected for testing. Questioned costs: Undetermined. Cause: The Division is behind in making adjustments and issuing refunds to employers utilizing incorrect rates. Effect: Incorrect employer experience rates were applied to employers. Recommendation: The Division should review and enhance procedures and controls to ensure that employer experience rates are properly calculated and applied. Views of responsible officials: MERIT rating was completed on a Emergency Rule due to COVID 19 pandemic. Mainframe system required manual intervention to complete this special law. DOL does not consider the rate the employer places on the UC8 tax form only the rate assessed. The accounts that were incorrect were a result of the special rule and needed constant manual intervention. Should an overpayment occur DOL notifies employer of credit and allows them to utilize that on future quarterly payments. If the credit cannot be used we issue a check for the refund. DOL Staff created Emergency Rule 21 changing the tax table to correct the mainframe issue.
Reference Number: 2022-006 Prior Year Finding: 2021-003 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 2208A, Quarterly UI Above-Base Report Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 2208A, Quarterly UI Above-Base Report (OMB No. 1205-0132) ? Quarterly report of staff years worked and paid by program category. Reports are due no later than 30 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The ETA 2208A ? Quarterly UI Above-Base Report was not filed timely. Context: Reports for the 9/30/2021 and 3/31/2022 reports were selected for testing and we noted that one of the two reports was not filed timely. The 3/31/2022 ETA 2208A report was due by 4/30/2021 and it was submitted on 5/18/2022, or 18 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed no later than 30 days after the end of each quarter. Effect: The ETA 2208A report was not filed timely which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ETA 2208A ? Quarterly UI Above-Base Reports are submitted no later than 30 days after the end of each quarter. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 30 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 20 days after quarter end.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9050 - Time Lapse of All First Payments except Workshare Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit periodic reporting to evaluate the performance of the states? UI programs. The ETA 9050?Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 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: The Division did not submit the ETA 9050?Time Lapse of All First Payments except Workshare Report timely for the month ended December 31, 2021. Context: One of three monthly ETA 9050 reports selected for testing was filed untimely. The report for the month ended December 31, 2021 was required to be submitted electronically no later than January 20, 2022, but the Division submitted the report seven days late on January 27, 2022. Questioned costs: None noted. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9050 report was submitted by the 20th of the month following the month to which the data relates. Internal controls did not prevent or detect the error. Effect: The ETA 9050 report was not filed timely for the month ending December 31, 2021 which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and enhance procedures and internal controls to ensure that ETA 9050 reports are submitted timely, by the 20th of the month following the month to which the data relates. Views of responsible officials: DE has put a process in place to monitor and track the progress and timeliness of all ETA reporting. Auto-reminders will be created to notify all units responsible for ETA reports two weeks before the due date.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9130, Financial Status Report, UI Programs Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9130-Financial Status Report, UI Programs report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). Control: Per 2 CFR section 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: The Cumulative Federal Share of Expenditures reported on the ETA 9130 ? Financial Status Report, UI Programs submitted by the Division did not tie to supporting documentation. Context: Twenty ETA 9130 reports were selected for testing consisting of 9 reports for the 9/30/2021 quarter and 11 reports for the 3/31/2022 quarter. For 4 of the 11 reports submitted for the 3/31/2022 quarter, the Cumulative Federal Share of Expenditures on Line 10e did not tie to supporting documentation. Specifically, we noted the following exceptions: ? Grant UI34707CI0: The amount reported was $105,971 greater than supporting documentation. ? Grant UI34707Z30: The amount reported on Line 10e was $118,111 greater than supporting documentation. ? Grant UI34707C80: The amount reported on Line 10e was $23,231 greater than supporting documentation. ? Grant UI34707CA0: The amount reported on Line 10e was $707 greater than supporting documentation. Questioned costs: Questioned costs of $248,020 represent the federal share reported in excess of supporting documentation. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9130 reports were accurate and tied to supporting documentation. Internal controls did not prevent or detect the error. Effect: The Division submitted inaccurate ETA 9130 reports for the 3/31/2022 quarter and the Cumulative Federal Share of Expenditures exceeded the amount contained in supporting documentation. Recommendation: We recommend the Division review and enhance procedures and internal controls to ensure that ETA 9130 reports are submitted accurately and that they tie to supporting documentation. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 45 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 30 days after quarter end.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state Unemployment Insurance (UI) tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state unemployment compensation (UC) law that conforms with federal UC law. Control: Per 2 CFR section 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: The Division of Unemployment Insurance (Division) did not maintain documentation supporting claimant eligibility and an error was noted in the amount paid to a claimant. Context: Forty claimants were selected for testing and the following exceptions were noted: ? For 1 of 40 claimants, documentation could not be provided that a weekly certification occurred for the claim week. ? For 2 of 40 claimants, documentation could not be provided for the claimants? wages during the base period used to calculate the weekly benefit amount (WBA) and maximum benefit amount (MBA). Therefore, the claimants? WBA and MBA were unable to be verified. ? For 1 of 40 claimants, the claimant?s WBA was calculated as $238, but they were paid $171. Questioned costs: Undetermined. Cause: The Division?s procedures and internal controls were not sufficient to ensure that it issued unemployment compensation payments accurately and that documentation to support claimant eligibility was retained. Effect: The accuracy of benefit payment amounts could not be verified, and one claimant was paid less than the benefit payment to which they were entitled. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that it retains documentation for claimant eligibility and that benefit payments are accurate in accordance with program requirements. Views of responsible officials: We will continue to utilize and enhance of customer service management tools and centralize where documentation is retained. We will continue to review program requirements and ensure they are reviewed, and implemented, and processed correctly. We will review and ask for clarity regarding UIPLs when there is a discrepancy. We are also looking to modernization our systems to house all our documentations.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch; ? 95% of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 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: The Division did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Forty cases were selected for testing. The Division did not meet the required time limits for closing cases within 60, 90, or 120 days. Specifically, we noted the following exceptions: ? 48% of cases tested (19 of 40 cases) were closed within 60 days which is less than the required 70% ? 63% of cases tested (25 of 40 cases) were closed within 90 days which is less than the required 95% ? 73% of cases tested (29 of 40 cases) were closed within 120 days which is less than the required 98% ? The remaining 28% of cases tested (11 of 40 cases) were closed between 141 and 277 days. Questioned costs: Undetermined. Cause: The Division experienced staffing shortages and other pressures related to the COVID-19 pandemic which impacted its ability to meet the required BAM investigation time limits for closing cases. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395. Views of responsible officials: The BAM Unit experienced high turnover volumes during the pandemic, creating a backlog of UI Benefit investigations. The pandemic also changed the workforce dynamic, creating a culture of fully remote jobs in many job markets, which left most State agencies struggling to fill positions; because of this, State Government lost its competitive edge as an employer, resulting in low applicant response to job postings. It took the BAM unit several job reposting?s to get vacancies filled. However, we have filled most of the vacancies and will conduct interviews on Friday, 03/24/23, to fill the remaining two vacancies in the unit. We also recently made a change to our training strategy. There will be consecutive weeks of training in a classroom setting, along with OTJT. The BAM unit also assigns all available NASWA training to new hires during their first weeks of employment. We chose this training strategy to provide all new hires with consistent training to ensure understanding of the BAM investigative process. In addition, we will be hiring a Sr. accountant who will focus on all backlog items only. We are also in the process of converting all paper-driven methods to fully electronic ones. All BAM employees will receive the necessary tools, training, and work-from-home equipment for working successfully from home, allowing us to maintain production in case of another catastrophic event.
Reference Number: 2022-005 Prior Year Finding: 2021-005 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? Employer Experience Rating Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Certain benefits accrue to states and employers as a result of the state having a federally approved experience-rated UI tax system. All states currently have an approved system. For the purpose of proper administration of the system, the SWA maintains accounts, or subsidiary ledgers, on a state UI taxes received or due from individual employers, and the UI benefits charged to the employer. The employer?s ?experience? with the unemployment of former employees is the dominant factor in the SWA computation of the employer?s annual state UI tax rate. The computation of the employer?s annual tax rate is based on state UI law (26 USC 3303). Control: Per 2 CFR section 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 be in compliance 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: The Division incorrectly calculated employer experience ratings. Quarterly tax reports contained employer payments that were made at a rate inconsistent with the assigned contribution rate. Context: Exceptions noted in 19 of 60 employer experience rates selected for testing. Questioned costs: Undetermined. Cause: The Division is behind in making adjustments and issuing refunds to employers utilizing incorrect rates. Effect: Incorrect employer experience rates were applied to employers. Recommendation: The Division should review and enhance procedures and controls to ensure that employer experience rates are properly calculated and applied. Views of responsible officials: MERIT rating was completed on a Emergency Rule due to COVID 19 pandemic. Mainframe system required manual intervention to complete this special law. DOL does not consider the rate the employer places on the UC8 tax form only the rate assessed. The accounts that were incorrect were a result of the special rule and needed constant manual intervention. Should an overpayment occur DOL notifies employer of credit and allows them to utilize that on future quarterly payments. If the credit cannot be used we issue a check for the refund. DOL Staff created Emergency Rule 21 changing the tax table to correct the mainframe issue.
Reference Number: 2022-006 Prior Year Finding: 2021-003 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 2208A, Quarterly UI Above-Base Report Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 2208A, Quarterly UI Above-Base Report (OMB No. 1205-0132) ? Quarterly report of staff years worked and paid by program category. Reports are due no later than 30 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The ETA 2208A ? Quarterly UI Above-Base Report was not filed timely. Context: Reports for the 9/30/2021 and 3/31/2022 reports were selected for testing and we noted that one of the two reports was not filed timely. The 3/31/2022 ETA 2208A report was due by 4/30/2021 and it was submitted on 5/18/2022, or 18 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed no later than 30 days after the end of each quarter. Effect: The ETA 2208A report was not filed timely which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ETA 2208A ? Quarterly UI Above-Base Reports are submitted no later than 30 days after the end of each quarter. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 30 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 20 days after quarter end.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9050 - Time Lapse of All First Payments except Workshare Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit periodic reporting to evaluate the performance of the states? UI programs. The ETA 9050?Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 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: The Division did not submit the ETA 9050?Time Lapse of All First Payments except Workshare Report timely for the month ended December 31, 2021. Context: One of three monthly ETA 9050 reports selected for testing was filed untimely. The report for the month ended December 31, 2021 was required to be submitted electronically no later than January 20, 2022, but the Division submitted the report seven days late on January 27, 2022. Questioned costs: None noted. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9050 report was submitted by the 20th of the month following the month to which the data relates. Internal controls did not prevent or detect the error. Effect: The ETA 9050 report was not filed timely for the month ending December 31, 2021 which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and enhance procedures and internal controls to ensure that ETA 9050 reports are submitted timely, by the 20th of the month following the month to which the data relates. Views of responsible officials: DE has put a process in place to monitor and track the progress and timeliness of all ETA reporting. Auto-reminders will be created to notify all units responsible for ETA reports two weeks before the due date.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9130, Financial Status Report, UI Programs Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9130-Financial Status Report, UI Programs report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). Control: Per 2 CFR section 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: The Cumulative Federal Share of Expenditures reported on the ETA 9130 ? Financial Status Report, UI Programs submitted by the Division did not tie to supporting documentation. Context: Twenty ETA 9130 reports were selected for testing consisting of 9 reports for the 9/30/2021 quarter and 11 reports for the 3/31/2022 quarter. For 4 of the 11 reports submitted for the 3/31/2022 quarter, the Cumulative Federal Share of Expenditures on Line 10e did not tie to supporting documentation. Specifically, we noted the following exceptions: ? Grant UI34707CI0: The amount reported was $105,971 greater than supporting documentation. ? Grant UI34707Z30: The amount reported on Line 10e was $118,111 greater than supporting documentation. ? Grant UI34707C80: The amount reported on Line 10e was $23,231 greater than supporting documentation. ? Grant UI34707CA0: The amount reported on Line 10e was $707 greater than supporting documentation. Questioned costs: Questioned costs of $248,020 represent the federal share reported in excess of supporting documentation. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9130 reports were accurate and tied to supporting documentation. Internal controls did not prevent or detect the error. Effect: The Division submitted inaccurate ETA 9130 reports for the 3/31/2022 quarter and the Cumulative Federal Share of Expenditures exceeded the amount contained in supporting documentation. Recommendation: We recommend the Division review and enhance procedures and internal controls to ensure that ETA 9130 reports are submitted accurately and that they tie to supporting documentation. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 45 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 30 days after quarter end.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state Unemployment Insurance (UI) tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state unemployment compensation (UC) law that conforms with federal UC law. Control: Per 2 CFR section 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: The Division of Unemployment Insurance (Division) did not maintain documentation supporting claimant eligibility and an error was noted in the amount paid to a claimant. Context: Forty claimants were selected for testing and the following exceptions were noted: ? For 1 of 40 claimants, documentation could not be provided that a weekly certification occurred for the claim week. ? For 2 of 40 claimants, documentation could not be provided for the claimants? wages during the base period used to calculate the weekly benefit amount (WBA) and maximum benefit amount (MBA). Therefore, the claimants? WBA and MBA were unable to be verified. ? For 1 of 40 claimants, the claimant?s WBA was calculated as $238, but they were paid $171. Questioned costs: Undetermined. Cause: The Division?s procedures and internal controls were not sufficient to ensure that it issued unemployment compensation payments accurately and that documentation to support claimant eligibility was retained. Effect: The accuracy of benefit payment amounts could not be verified, and one claimant was paid less than the benefit payment to which they were entitled. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that it retains documentation for claimant eligibility and that benefit payments are accurate in accordance with program requirements. Views of responsible officials: We will continue to utilize and enhance of customer service management tools and centralize where documentation is retained. We will continue to review program requirements and ensure they are reviewed, and implemented, and processed correctly. We will review and ask for clarity regarding UIPLs when there is a discrepancy. We are also looking to modernization our systems to house all our documentations.
Reference Number: 2022-010 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Department Name: Office of the Governor Federal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP0139 (3/3/2021 ? 12/31/2024) SLFRP2629 (3/3/2021 ? 12/31/2024) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Reporting requirements for Coronavirus State and Local Fiscal Recovery Funds include the following: 1) Interim Report: States were required to submit a one-time interim report to the U.S. Treasury?s State and Local Relief Funds (SLRF) portal with expenditures by Expenditure Category from the date of award to July 31, 2021, by August 31, 2021 or sixty (60) days after first receiving funding if the recipient?s date of award was between July 15, 2021 and October 15, 2021. The recipient was required to enter obligations and expenditures and, for each, select the specific expenditure category from the available options. 2) Project and Expenditure Reports: Each recipient is required to report obligations and expenditures by project according to its corresponding Expenditure Category. The Project and Expenditure Report provides information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. For purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). An initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 and was required to be submitted to Treasury by January 31, 2022. Subsequent quarterly reports cover one calendar quarter and are required to be submitted to Treasury by the last day of the month following the end of the period covered. Control: Per 2 CFR section 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: The Interim Report was not filed timely and supporting documentation did not agree with amounts reported for obligations, expenditures and subawards on the Project and Expenditure Reports. Context: Program components and projects are managed by the Office of the Governor (Office) and by several agencies throughout the State. The Office submits all required reports on the State?s behalf. For projects not managed directly by the Office, State agencies provide supporting documentation to the Office for compilation and inclusion on the State?s reports. The following reports were selected for testing: 1) The Interim Report 2) Project and Expenditure Reports for the 3/31/2022 and 6/30/2022 quarters: From these reports, 51 projects were selected for testing obligations and expenditures, 40 subawards greater than $50,000 and 10 subawards less than $50,000 were selected. The following exceptions were noted: 1) The Interim Report was required to be submitted by 8/31/2021 and it was submitted on 9/2/2021, or 2 days late. 2) Project and Expenditure Reports: o Obligations: For 40 of 51 projects greater than $50,000, obligations did not agree to supporting documentation. For 32 of the 40 exceptions, the Office reported cumulative expenditures incurred rather than cumulative obligations. o Expenditures: For 20 of 51 projects greater than $50,000, expenditures did not agree to supporting documentation. For 18 of the 20 exceptions, the Office reported the subrecipients? expenditures rather than the Office?s expenditures. o Subawards greater than $50,000: For 16 of 20 subawards greater than $50,000, reported obligations did not match supporting documentation and 11 of 20 subawards were not reported. o Subawards less than $50,000: For 2 of 10 subawards, the subawards exceeded $50,000, but they were reported in the aggregate with subawards less than $50,000. Questioned costs: Undetermined. Cause: Internal Controls were not operating effectively to ensure that the Interim Report was submitted timely, and that Project and Expenditure Reports were submitted accurately. Effect: Obligations, expenditures, and subaward information reported to Treasury was incorrect. Recommendation: The Office should enhance its procedures and internal controls regarding preparation of the Project and Expenditure Reports to ensure that information reported is accurate and agrees to supporting documentation. We further recommend that the Office work with State agencies which incur costs under the program to develop procedures and controls to ensure that they provide accurate information to the Office on a timely basis to facilitate timely and accurate project reporting. Views of responsible officials: There is no disagreement with the audit finding but here is our explanation. The American Rescue Plan State and Local Fiscal Recovery Funds are awarded in advance to our subrecipients based on language in each subrecipient agreement. Within United States Treasury?s reporting portal, we are required to report subawards for each subrecipient and related expenditures and programmatic details. We made the decision to report subrecipient activity for each subaward based on the quarterly data provided to our team. For instance, a subrecipient awarded $50,000 with quarterly expenditures of $10,000 were reported as expending $10,000 on the quarterly UST Project and Expenditure report. This decision was made because it most accurately accounted for the status of a project and the utilization of the funding. This approach resulted in a discrepancy between the expenses in FSF and the UST reporting. Based on guidance from CLA, coming out of the single audit, our team will be reporting the subrecipient activity as the amount paid to each, not based on the expenses of their subaward. A subrecipient awarded and paid $50,000 will be reported as an expenditure of $50,000. We will continue to track and capture subrecipient utilization of the funding through compliance monitoring and quarterly updates. The previously reported amounts in U.S. Treasury?s system will be adjusted for the quarter ending March 31, 2023. This action will resolve CLA?s reporting finding. CLA will test the 3/31/23 and 6/30/23 reports during next year?s single audit to ensure the finding was corrected.
Reference Number: 2022-011 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP0139 (3/3/2021 ? 12/31/2024) SLFRP2629 (3/3/2021 ? 12/31/2024) Compliance Requirement: Procurement, Suspension & Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 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. Per 29 Del C. Chapter 69, section 6981 Large professional service procurement process: (a) Any state contract for which an agency is a party with probable fees, including reimbursable expenses and amendments, greater than the threshold amount or amounts established by the Contracting and Purchasing Advisory Council pursuant to ? 6913 of this title for the completed job will be subject to the provisions of this subchapter. (b) Each agency shall publicly announce, not less than once a week for two consecutive weeks in a newspaper published or circulated in each county of the State, when professional services are required (c) Each agency shall publicly announce each professional services contract subject to subsection (a) of this section by electronic publication accessible to the public in a manner prescribed pursuant to ? 6902(9) of this title for two consecutive weeks. (d) Such announcement shall include: (1) The project identification; (2) General description and scope of the project; (3) Location; (4) Deadline for submission of brief letters of interest; (5) Criteria for selection of professionals including any special criteria required for any particular project; (6) Indication of how interested professionals can apply for consideration; (7) The agency?s intention to award to more than one firm, if applicable; and (8) A description of the selection process to be used, as defined in ? 6982 of this title. (f) Each agency shall establish written administrative procedures for the evaluation of applicants. These administrative procedures shall be adopted and made available to the public by each agency before publicly announcing an occasion when professional services are required. One or more of the following criteria may be utilized in ranking the applicants under consideration: (1) Experience and reputation; (2) Expertise (for the particular project under consideration); (3) Capacity to meet requirements (size, financial condition, etc.); (4) Location (geographical); (5) Demonstrated ability; (6) Familiarity with public work and its requirements; or (7) Distribution of work to individuals and firms or economic considerations. (g) In addition to the above, other criteria necessary for a quality, cost-effective project may be utilized. (h) Each project shall be given individual attention, and a weighted average may be applied to criteria according to its importance to each project. (i) For the selection process described in ? 6982(b) of this title, price may be a criteria used to rank applicants under consideration. Per 29 Del C. Chapter 69, section 6982 Selection: (b) Agencies shall use the selection process described in paragraphs (b)(1) through (3) of this section. (1) Based upon the criteria established pursuant to ? 6981(f) of this title, the agency shall determine all applicants that meet the minimum qualifications to perform the required services. (2) The agency shall then interview at least one of the qualified firms. The agency may negotiate with one firm without terminating negotiations with another firm and may negotiate with one or more firms during the same period. At any point in the negotiation process, the agency may, at its discretion, terminate negotiations with any or all firms. (3) The agency may require the firm with whom the agency is negotiating to execute a truth-in-negotiation certificate stating the wage rates and other factual unit costs supporting the compensation are accurate, complete and current at the time of contracting. All professional service contracts shall provide that the original contract price and any additions thereto shall be adjusted to exclude significant sums where the agency determines the contract price was increased due to inaccurate, incomplete or noncurrent wage rates and other factual unit costs. All such contract adjustments shall be made within one year following the end of the contract. Sole source procurement shall be avoided, except when no reasonable alternative sources exist. A written determination by the agency for the sole source procurement shall be included in the agency?s contract file. (29 Del. C. ?6904(i)) 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. 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 Control: Per 2 CFR Section 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: The Division was unable to provide documentation to support compliance with the required State procurement processes for a professional services contract. In addition, the Division did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context: For one of eleven contracts selected for testing, no support was provided for the how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned costs: Undetermined. Cause: The Division?s internal controls were not sufficient to ensure that Statewide procurement policies and Federal suspension and debarment regulations were followed for purchases made for the program. Effect: The Division is not compliant with federal and state procurement and suspension and debarment requirements. 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 State. Recommendation: The Division should review and enhance controls and procedures to ensure that it follows the State?s procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials: We agree with the auditor?s recommendation. Ongoing meeting, training, and monitoring have helped and will continue to help DSS staff to achieve compliance. The following actions have been taken to improve the Procurement process. ? Program unit staff will receive Procurement Bootcamp training on contract rules. ? Program unit & Fiscal unit staff will monitor and track all contracts, MOU/MOA?s and agreement so they are in compliance with State Procurement policy. ? Fiscal unit will ensure they have an approval to pay for any invoices. ? Conduct monthly meetings with OSEC CMP Managers and DSS Fiscal unit.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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; (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 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Twelve of sixty time and effort certifications selected for testing were not certified and obtained until after the documentation was requested for audit. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. ELC Grant Managers use various tools to monitor personnel funding: Organizational charts, grant budget requests, wage workups, and funding transfer notifications (FTNs) for budget positions associated with ELC. Our process has been overhauled and time and effort attestation and certification forms are being collected for all grants managed by the DPH Laboratory every 6 months. In addition, ELC Grant Managers at DPHL developed a new standard operating procedure (SOP), worked with DMS to be trained on the requirements, and work towards a new internal standard.
Reference Number: 2022-013 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities are required to submit Performance Measures and Progress Monitoring reports on a quarterly basis, no later than 30 days after the end of each quarter, in accordance with the terms and conditions of the Federal award. Control: Per 2 CFR section 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: The Division was unable to provide support that quarterly Progress Monitoring Reports were filed timely. Context: Six quarterly Performance Measures reports, and five quarterly Progress Monitoring reports were selected for testing. The Division was unable to provide support that five of five quarterly Progress Monitoring reports were filed timely. Questioned costs: None noted. Cause: The Division?s procedures and controls were not sufficient to ensure that quarterly Progress Monitoring reports were filed timely. Effect: The Division was not in compliance with the program?s reporting requirements. Recommendation: The Division should review and enhance internal controls and procedures to ensure that quarterly Progress Monitoring reports are filed timely and that it maintains documentation supporting timely submission. Views of responsible officials: The Division of Public Health (DPH) filed its quarterly Progress Monitoring reports timely but failed to maintain supporting documentation. The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior year finding. DPHL has been in discussion with the Federal Program regarding a timestamp function within the REDCap reporting system. Initial information confirmed by the sponsor, indicated the function would be available; however, DPHL was later advised that the functionality would not be available. As a result, DPHL started working on a process to capture performance report submission dates via PDF screenshots. The process continues to evolve and when fully implemented will allow us to provide verification of timely submitted performance reports.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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; (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 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Twelve of sixty time and effort certifications selected for testing were not certified and obtained until after the documentation was requested for audit. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. ELC Grant Managers use various tools to monitor personnel funding: Organizational charts, grant budget requests, wage workups, and funding transfer notifications (FTNs) for budget positions associated with ELC. Our process has been overhauled and time and effort attestation and certification forms are being collected for all grants managed by the DPH Laboratory every 6 months. In addition, ELC Grant Managers at DPHL developed a new standard operating procedure (SOP), worked with DMS to be trained on the requirements, and work towards a new internal standard.
Reference Number: 2022-013 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities are required to submit Performance Measures and Progress Monitoring reports on a quarterly basis, no later than 30 days after the end of each quarter, in accordance with the terms and conditions of the Federal award. Control: Per 2 CFR section 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: The Division was unable to provide support that quarterly Progress Monitoring Reports were filed timely. Context: Six quarterly Performance Measures reports, and five quarterly Progress Monitoring reports were selected for testing. The Division was unable to provide support that five of five quarterly Progress Monitoring reports were filed timely. Questioned costs: None noted. Cause: The Division?s procedures and controls were not sufficient to ensure that quarterly Progress Monitoring reports were filed timely. Effect: The Division was not in compliance with the program?s reporting requirements. Recommendation: The Division should review and enhance internal controls and procedures to ensure that quarterly Progress Monitoring reports are filed timely and that it maintains documentation supporting timely submission. Views of responsible officials: The Division of Public Health (DPH) filed its quarterly Progress Monitoring reports timely but failed to maintain supporting documentation. The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior year finding. DPHL has been in discussion with the Federal Program regarding a timestamp function within the REDCap reporting system. Initial information confirmed by the sponsor, indicated the function would be available; however, DPHL was later advised that the functionality would not be available. As a result, DPHL started working on a process to capture performance report submission dates via PDF screenshots. The process continues to evolve and when fully implemented will allow us to provide verification of timely submitted performance reports.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Delaware Health Care Commission (DHCC) Federal Program: 1332 State Innovation Waivers Assistance Listing Number: 93.423 Award Number and Year: SIWIW200012 (1/1/2020 ? 12/31/2024) Compliance Requirement: Reporting ? Quarterly Performance Reports Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Grantees are required to submit both quarterly and annual reports that outline specific metrics and programmatic updates requested by the federal partners. a. Quarterly Reporting ? Grantees are required to submit quarterly reports. At a minimum, these reports must highlight information on all ongoing operational challenges, as well as plans for, and results of, associated corrective action. This information is integral to calculating the state?s pass-through funding amount and for ensuring the grantee?s compliance with the statutory guard rails. Reports are due 60 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: DHCC did not submit a quarterly performance report timely. Context: Quarterly Performance Reports for the 9/30/2021 and 3/31/2022 quarters were selected for testing. The Quarterly Performance Report for the 3/31/2022 quarter was not submitted timely. The report was due 5/31/2022 and it was submitted 6/6/2022, or six days late. Questioned costs: None noted. Cause: DHCC?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Effect: The quarterly performance report was not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: DHCC should review and enhance its reporting procedures and controls to ensure that quarterly performance reports are submitted no later than 60 days after the end of each quarter. Views of responsible officials: DHCC acknowledges the 5/31/22 quarterly report was not submitted timely and is committed to enhancing procedures and controls. To ensure future reports are submitted by due date, DHCC will make sure all reporting deadlines are added to DHCC calendar.
Reference Number: 2022-015 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 20210DETANF (10/1/2019 ? 9/30/2025), 2222DETANF (10/1/2021 ? 9/30/2026) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (vi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Be incorporated into the official records of the non-Federal entity; (viii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (ix) 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; (x) Comply with the established accounting policies and practices of the non-Federal entity; (viii) 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Context: For five of forty payroll transactions selected for testing, documentation could not be provided to support that employee time and effort charged to the program had been certified and approved. Questioned costs: Questioned costs of $8,231 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Social Services (DSS) will review and strengthen its internal controls in regard to time and effort reporting to ensure it can substantiate all reimbursements from federal programs. This review will include other DHSS divisions and state agencies that receive TANF funds for time and effort. Exceptions were due to position changes, retirement and untimely submission of supporting documents. Issues identified by the audit have been corrected.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 20210DETANF (10/1/2019 ? 9/30/2025), 2222DETANF (10/1/2021 ? 9/30/2026) Compliance Requirement: Reporting ? ACF-196R, TANF Financial Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit the ACF-196R, TANF Financial Report on quarterly basis. Each state files quarterly expenditure data on the state?s use of federal TANF funds, state TANF MOE expenditures, and state expenditures of MOE funds in separate state programs. If a state is expending federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year?s TANF funds. Reports must be received by the Administration for Children and Families (ACF) within 45 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The Division did not submit quarterly ACF-196R reports timely. Context: ACF-196R reports for the 9/30/2021 and 3/31/2022 quarters were selected for testing. The 9/30/2021 report was due by 11/14/2021, but it was submitted 3/9/2022, or 115 days late. The report for the quarter ending 3/31/2022 was due by 5/15/2022, but it was submitted on 7/31/2022, or 77 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Effect: The ACF-196R reports were not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ACF-196R TANF Financial Reports are submitted no later than 45 days after the end of each quarter. Views of responsible officials: The Division has reviewed and updated its reporting procedures and controls to ensure all federal reports are submitted timely. Exceptions noted in the audit were due to staff turnover and training.
Reference Number: 2022-017 Prior Year Finding: 2021-013 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of State Service Centers Federal Program: COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001DELIEA (10/1/2019 ? 9/30/2021), 2101DELIEA (10/102020 ? 9/30/2022), 2010DEE5C6 (3/11/2021 ? 9/30/2022), 2201DELIEA (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of two subawards selected for testing were reported to FSRS. Total subawards tested were $8,798,444, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division has been working to implement corrective action and has developed internal controls and procedures to ensure that FFATA reporting requirements are met and subawards are reported accurately and timely to FSRS.
Reference Number: 2022-017 Prior Year Finding: 2021-013 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of State Service Centers Federal Program: COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001DELIEA (10/1/2019 ? 9/30/2021), 2101DELIEA (10/102020 ? 9/30/2022), 2010DEE5C6 (3/11/2021 ? 9/30/2022), 2201DELIEA (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of two subawards selected for testing were reported to FSRS. Total subawards tested were $8,798,444, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division has been working to implement corrective action and has developed internal controls and procedures to ensure that FFATA reporting requirements are met and subawards are reported accurately and timely to FSRS.
Reference Number: 2022-018 Prior Year Finding: 2021-014 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program (CHIP) Assistance Listing Number: 93.767 Award Number and Year: 2205DE5021 (10/1/2021 ? 9/30/2023) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR Section 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: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Further, the Division was unable to provide support for a transaction selected for testing. Context: Eighteen transactions were selected for testing, and we noted the following exceptions: ? Six of eighteen transactions were charged before the allowable period of performance. ? For one of eighteen transactions, the Division was unable to provide supporting documentation and compliance with period of performance could not be verified. Questioned costs: $44,567 represents transactions unsupported or incurred and charged prior to the award?s allowable period of performance. Cause: The Division did not enhance their internal controls and procedures to ensure that expenditures charged to the program were incurred within the award?s period of performance nor that it maintained supporting documentation for expenditures charged to the award. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Division should review and enhance internal controls and procedures to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance, that it maintains supporting documentation, and that supporting documentation is available for audit. Views of responsible officials: The Division will review and enhance internal controls to ensure program expenditures are properly charged. Questioned costs are due to the reporting requirements of this grant. Payments are made based on when invoices are received. Federal requirement is that CHIP draws, expenditures and reporting are done on a cost basis. DMMA reports based on the date of the draw, not the date of the invoice. The Division is exploring ways to meet all grant compliance requirements.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-022 Prior Year Finding: 2021-020 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79TI083305 (9/30/2020 ? 9/29/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $8,295,312, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will reevaluate its current process, implement proper controls for FFATA reporting standards, and ensure subawards are reviewed timely. In addition, staff will be assigned to verify information prior to being keyed into FSRS.
Reference Number: 2022-023 Prior Year Finding: 2021-018 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79TI083305 (9/30/2020 ? 9/29/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. Control: Per 2 CFR Section 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: The Division was not able to provide support that it monitored its subrecipients. Context: For 4 of 8 subrecipients selected for testing, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Recommendation: The Division should review and enhance internal controls and procedures to ensure that proper subrecipient monitoring is conducted in accordance with Federal regulations. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-024 Prior Year Finding: 2021-024 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-10 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: The Division was not able to provide support that it furnished required information to its subrecipients at the time of subaward, monitored its subrecipients, or ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: Exceptions were noted in four of eight subrecipients selected for testing (exceptions listed include multiple exceptions for some subrecipients): ? Four of eight subrecipient agreements were missing the following required information: Subrecipient?s Unique Identifier, Federal Award Identification Number (FAIN), Federal Award Date, Federal Award Project Description, Assistance Listing Number and Title. ? For one of eight subrecipients, the Division was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The Division could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. ? For four of eight subrecipients, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The Division should review and enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, also that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $6,649,227, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will develop internal controls and procedures to ensure that FFATA reporting requirements are met and that information submitted in FSRS is accurate and on time.
Reference Number: 2022-026 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Level of Effort Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR section 96.123(a)(10), the Block Grant shall not be used to supplant State funding of alcohol and other drug prevention and treatment programs. Control: Per 2 CFR Section 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: The Division did not meet the program?s level of effort requirements during FY 2022 for Supplement Not Supplant. Context: The State?s requirement for State expenditures during FY 2022 for alcohol and other drug prevention and treatment programs was $30 million and it expended $27 million, for a variance of $3 million. Questioned costs: Undetermined. Cause: The Division did not establish effective procedures and internal controls to ensure that level of effort requirements were met during FY 2022. Effect: The Division was not in compliance with the program?s level of effort requirements for Supplement Not Supplant. The Division expended approximately $3 million less in State funds than was required. Recommendation: The Division should review and enhance procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. Views of responsible officials: The Division will review and enhance its procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. This review is to include a more detailed procedure for gathering and organizing data from the state?s accounting system. Division program staff believe that this requirement was in fact met; however, the current process documentation is not clear enough to provide the level of support needed for the audit.
Reference Number: 2022-027 Prior Year Finding: 2021-025 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (xi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (xii) Be incorporated into the official records of the non-Federal entity; (xiii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (xiv) 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; (xv) Comply with the established accounting policies and practices of the non-Federal entity; (ix) 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. Control: Per 2 CFR Section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Eight payroll transactions were selected for testing and the following exceptions were noted: ? Four of eight time and effort certifications were not certified and obtained until after the documentation was requested for audit. ? No time and effort certifications were provided for three of eight transactions. Questioned costs: Questioned costs of $2,355 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division will improve the current process through enhanced internal controls and updated training for staff to ensure a clear understanding of the requirements for certification and reporting of time and effort when charged to a federal grant.
Reference Number: 2022-024 Prior Year Finding: 2021-024 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-10 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: The Division was not able to provide support that it furnished required information to its subrecipients at the time of subaward, monitored its subrecipients, or ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: Exceptions were noted in four of eight subrecipients selected for testing (exceptions listed include multiple exceptions for some subrecipients): ? Four of eight subrecipient agreements were missing the following required information: Subrecipient?s Unique Identifier, Federal Award Identification Number (FAIN), Federal Award Date, Federal Award Project Description, Assistance Listing Number and Title. ? For one of eight subrecipients, the Division was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The Division could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. ? For four of eight subrecipients, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The Division should review and enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, also that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $6,649,227, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will develop internal controls and procedures to ensure that FFATA reporting requirements are met and that information submitted in FSRS is accurate and on time.
Reference Number: 2022-026 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Level of Effort Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR section 96.123(a)(10), the Block Grant shall not be used to supplant State funding of alcohol and other drug prevention and treatment programs. Control: Per 2 CFR Section 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: The Division did not meet the program?s level of effort requirements during FY 2022 for Supplement Not Supplant. Context: The State?s requirement for State expenditures during FY 2022 for alcohol and other drug prevention and treatment programs was $30 million and it expended $27 million, for a variance of $3 million. Questioned costs: Undetermined. Cause: The Division did not establish effective procedures and internal controls to ensure that level of effort requirements were met during FY 2022. Effect: The Division was not in compliance with the program?s level of effort requirements for Supplement Not Supplant. The Division expended approximately $3 million less in State funds than was required. Recommendation: The Division should review and enhance procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. Views of responsible officials: The Division will review and enhance its procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. This review is to include a more detailed procedure for gathering and organizing data from the state?s accounting system. Division program staff believe that this requirement was in fact met; however, the current process documentation is not clear enough to provide the level of support needed for the audit.
Reference Number: 2022-027 Prior Year Finding: 2021-025 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (xi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (xii) Be incorporated into the official records of the non-Federal entity; (xiii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (xiv) 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; (xv) Comply with the established accounting policies and practices of the non-Federal entity; (ix) 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. Control: Per 2 CFR Section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Eight payroll transactions were selected for testing and the following exceptions were noted: ? Four of eight time and effort certifications were not certified and obtained until after the documentation was requested for audit. ? No time and effort certifications were provided for three of eight transactions. Questioned costs: Questioned costs of $2,355 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division will improve the current process through enhanced internal controls and updated training for staff to ensure a clear understanding of the requirements for certification and reporting of time and effort when charged to a federal grant.
Reference Number: 2022-028 Prior Year Finding: No Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: DEMA could not produce supporting documentation that it reported required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: DEMA was not able to provide supporting documentation for FSRS reporting for four of five subawards selected for testing. Total subawards tested were $9,839,395, and $229,664 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: DEMA?s policies and procedures were not sufficient to ensure that documentation was maintained to support required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: DEMA was unable to provide support that subawards were reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that DEMA enhance internal controls and procedures to ensure that FFATA reporting requirements are met and supporting documentation for submission is maintained. Views of responsible officials: DEMA finance section has created a group account for FFATA reporting using the group email DEMAFiscal@delaware.gov to enable anyone in that section to access, edit, and submit reports as needed. This will ensure that everyone in the finance section has access to information regardless of turnover. This will also share the workload and assist with timely reporting.
Reference Number: 2022-029 Prior Year Finding: 2021-027 Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal Award Identification (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient?s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement. (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: DEMA did not furnish all required information to its subrecipients at the time of issuance of the subawards. Further, DEMA was not able to provide support that it monitored the activities of its subrecipients to ensure that the subawards were used for authorized purposes, nor that it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: ? For five of five subrecipients, the following required information was not provided to the subrecipient at the time of award issuance: Federal Award Identification (FAIN), Federal award date, subaward budget period start and end date, Federal award project description as required by FFATA, name of Federal awarding agency, and Assistance Listing number and title. ? For five of five subrecipients, DEMA was unable to provide support that it monitored the activities of its subrecipients during the fiscal year to ensure that the subawards were used for authorized purposes. ? For three of five subrecipients, DEMA was unable to provide support that it ensured the subrecipients were audited as required by Subpart F. DEMA could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. Questioned costs: Undetermined. Cause: DEMA did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure to detect that subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis. Recommendation: DEMA should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Views of responsible officials: A contractor has been assigned to develop and implement internal controls to ensure all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Subaward letters were updated in September 2022 and a monitoring protocol implemented to begin monitoring all subrecipients to date to include an evaluation of independent audits that is documented as part of the monitoring visit.
Reference Number: 2022-028 Prior Year Finding: No Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: DEMA could not produce supporting documentation that it reported required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: DEMA was not able to provide supporting documentation for FSRS reporting for four of five subawards selected for testing. Total subawards tested were $9,839,395, and $229,664 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: DEMA?s policies and procedures were not sufficient to ensure that documentation was maintained to support required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: DEMA was unable to provide support that subawards were reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that DEMA enhance internal controls and procedures to ensure that FFATA reporting requirements are met and supporting documentation for submission is maintained. Views of responsible officials: DEMA finance section has created a group account for FFATA reporting using the group email DEMAFiscal@delaware.gov to enable anyone in that section to access, edit, and submit reports as needed. This will ensure that everyone in the finance section has access to information regardless of turnover. This will also share the workload and assist with timely reporting.
Reference Number: 2022-029 Prior Year Finding: 2021-027 Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal Award Identification (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient?s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement. (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: DEMA did not furnish all required information to its subrecipients at the time of issuance of the subawards. Further, DEMA was not able to provide support that it monitored the activities of its subrecipients to ensure that the subawards were used for authorized purposes, nor that it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: ? For five of five subrecipients, the following required information was not provided to the subrecipient at the time of award issuance: Federal Award Identification (FAIN), Federal award date, subaward budget period start and end date, Federal award project description as required by FFATA, name of Federal awarding agency, and Assistance Listing number and title. ? For five of five subrecipients, DEMA was unable to provide support that it monitored the activities of its subrecipients during the fiscal year to ensure that the subawards were used for authorized purposes. ? For three of five subrecipients, DEMA was unable to provide support that it ensured the subrecipients were audited as required by Subpart F. DEMA could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. Questioned costs: Undetermined. Cause: DEMA did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure to detect that subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis. Recommendation: DEMA should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Views of responsible officials: A contractor has been assigned to develop and implement internal controls to ensure all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Subaward letters were updated in September 2022 and a monitoring protocol implemented to begin monitoring all subrecipients to date to include an evaluation of independent audits that is documented as part of the monitoring visit.
Reference Number: 2022-033 Prior Year Finding: 2021-008 Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: COVID-19 ? HEERF Student Aid Portion, COVID-19 ? HEERF Institutional Portion Assistance Listing Number: 84.425E, F Award Number and Year: P425E204740 (5/24/2020 ? 6/30/2023) P425F204690 (8/18/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Special Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Recipients of Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) must complete the following special reporting components: 1) Public reporting on the (a)(1) Student Aid Portion; 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) Annual report. Annual Report: All HEERF recipients are required to submit an annual report for the calendar year ending December 31, 2021 no later than May 6, 2022. Quarterly Public Reporting-Student Aid Portion: Institutions must publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Control: Per 2 CFR section 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: Certain line items reported on the 2021 Annual Report and quarterly Student Aid Portion reports filed during FY 2022 by Delaware Technical Community College (the College) did not agree to supporting documentation. In addition, supporting documentation was unavailable for one quarterly Student Aid Portion report. Context: The 2021 Annual Report and two quarterly Student Aid Portion reports were selected for testing. We noted the following exceptions: ? The amount of Emergency Grants reported on the 2021 Annual Report did not agree with supporting documentation. The amount reported was $7,447,850 but supporting documentation was $5,923,898. ? For one of two quarterly Student Aid Portion reports, the College was unable to provide any supporting documentation. Neither documentation of the reporting narrative nor that the report had been posted on the College?s website were available for the report for the quarter ending 12/31/2021. ? For one of two quarterly Student Aid Portion reports, documentation for two key line items did not agree to the amounts reported. Documentation supporting the amount of Emergency Financial Aid Grants distributed to students (Item #3) and the number of students who have received an Emergency Financial aid Grant (Item #5) did not agree to the amounts reported for the quarter ending 9/30/2021. The Student Narrative Report showed $5,797,455 and 635 students vs. $1,139,130.00 and 1422 students on the student ledger. Questioned costs: Undetermined. Cause: The College?s procedures and controls were insufficient to ensure that it maintained documentation supporting the Annual Report and Quarterly Student Aid Portion reports, that it posted reports on its website timely, and that documentation was available for audit. Effect: The College was unable to provide documentation supporting reported information for special reports submitted during FY2022. Recommendation: The College should review and enhance internal controls and procedures to ensure that it maintains documentation supporting the Annual Report and the quarterly student aid portion reports and that this documentation is available for audit. Views of responsible officials: The College?s 2021 Year 2 Annual HEERF-Student Aid report table (Page 3 Table 8a Row 2) was corrected March 24, 2023 and in agreement with Delaware Tech?s student ledger detail (Banner student accounting system extract) when the federal reporting system was open for limited system data entry time. The Year 2 report was corrected and resubmitted as 2022 Year 3 Annual HEERF report filed. Filing is saved for audit review per federal system acceptance communicated. Additional Fiscal Accounting staff have trained to assist the Financial Aid Office with Quarterly HEERF Student Aid Reporting, report posting within 10 days post quarter end, and grant records management for immediate availability. The college continues to review and enhance our HEERF reporting internal controls with reports compiled and confirmed by a team ensuring multiple layers of reconciliation and final system report filing confirmation. Improved data summaries from system extracts with use of website tracking and snapshots at a single point-in-time are in place to support timely reporting and audit verification with the College?s quarterly and cumulative student award disbursement ledger detail. All website update requests will occur via use of the College?s Web Request ticketing system ending with a copy of the site update each quarter.
Reference Number: 2022-033 Prior Year Finding: 2021-008 Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: COVID-19 ? HEERF Student Aid Portion, COVID-19 ? HEERF Institutional Portion Assistance Listing Number: 84.425E, F Award Number and Year: P425E204740 (5/24/2020 ? 6/30/2023) P425F204690 (8/18/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Special Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Recipients of Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) must complete the following special reporting components: 1) Public reporting on the (a)(1) Student Aid Portion; 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) Annual report. Annual Report: All HEERF recipients are required to submit an annual report for the calendar year ending December 31, 2021 no later than May 6, 2022. Quarterly Public Reporting-Student Aid Portion: Institutions must publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Control: Per 2 CFR section 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: Certain line items reported on the 2021 Annual Report and quarterly Student Aid Portion reports filed during FY 2022 by Delaware Technical Community College (the College) did not agree to supporting documentation. In addition, supporting documentation was unavailable for one quarterly Student Aid Portion report. Context: The 2021 Annual Report and two quarterly Student Aid Portion reports were selected for testing. We noted the following exceptions: ? The amount of Emergency Grants reported on the 2021 Annual Report did not agree with supporting documentation. The amount reported was $7,447,850 but supporting documentation was $5,923,898. ? For one of two quarterly Student Aid Portion reports, the College was unable to provide any supporting documentation. Neither documentation of the reporting narrative nor that the report had been posted on the College?s website were available for the report for the quarter ending 12/31/2021. ? For one of two quarterly Student Aid Portion reports, documentation for two key line items did not agree to the amounts reported. Documentation supporting the amount of Emergency Financial Aid Grants distributed to students (Item #3) and the number of students who have received an Emergency Financial aid Grant (Item #5) did not agree to the amounts reported for the quarter ending 9/30/2021. The Student Narrative Report showed $5,797,455 and 635 students vs. $1,139,130.00 and 1422 students on the student ledger. Questioned costs: Undetermined. Cause: The College?s procedures and controls were insufficient to ensure that it maintained documentation supporting the Annual Report and Quarterly Student Aid Portion reports, that it posted reports on its website timely, and that documentation was available for audit. Effect: The College was unable to provide documentation supporting reported information for special reports submitted during FY2022. Recommendation: The College should review and enhance internal controls and procedures to ensure that it maintains documentation supporting the Annual Report and the quarterly student aid portion reports and that this documentation is available for audit. Views of responsible officials: The College?s 2021 Year 2 Annual HEERF-Student Aid report table (Page 3 Table 8a Row 2) was corrected March 24, 2023 and in agreement with Delaware Tech?s student ledger detail (Banner student accounting system extract) when the federal reporting system was open for limited system data entry time. The Year 2 report was corrected and resubmitted as 2022 Year 3 Annual HEERF report filed. Filing is saved for audit review per federal system acceptance communicated. Additional Fiscal Accounting staff have trained to assist the Financial Aid Office with Quarterly HEERF Student Aid Reporting, report posting within 10 days post quarter end, and grant records management for immediate availability. The college continues to review and enhance our HEERF reporting internal controls with reports compiled and confirmed by a team ensuring multiple layers of reconciliation and final system report filing confirmation. Improved data summaries from system extracts with use of website tracking and snapshots at a single point-in-time are in place to support timely reporting and audit verification with the College?s quarterly and cumulative student award disbursement ledger detail. All website update requests will occur via use of the College?s Web Request ticketing system ending with a copy of the site update each quarter.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-003 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Department Name: Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Award Number and Year: 1DE303301 (10/1/2020 ? 9/30/2022) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 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. 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. Control: Per 2 CFR section 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: The Department of Education (Department) did not determine the suspension and debarment status of subrecipients with expenditures exceeding $25,000 as required by federal regulations. Context: The suspension and debarment status for 1 of 5 subrecipients was not documented. Questioned costs: There are no questioned costs related to this finding as the subrecipient was not federally suspended or debarred. Cause: The Department?s procedures and internal controls over suspension and debarment are not sufficient to ensure that all subrecipients? suspension and debarment status is verified timely. Effect: Failure to verify the suspension and debarment status of subrecipients may result in the State issuing subawards to subrecipients that are suspended or debarred and not authorized to provide services under the program. Recommendation: The Department should ensure policies and procedures include the three options for determining suspension and debarment status listed in 2 CFR 180.300 and that controls are sufficient to ensure that the suspension and debarment status is verified for all subrecipients prior to issuance of the subawards. Views of responsible officials: The Delaware Department of Education (DDOE) Nutrition Team will update the online School Nutrition application to include a certification statement similar to the statement below. Have any current principal staff been debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Yes/No. The DDOE Nutrition Team will check SAM exclusions on sam.gov until the application is updated.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch; ? 95% of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 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: The Division did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Forty cases were selected for testing. The Division did not meet the required time limits for closing cases within 60, 90, or 120 days. Specifically, we noted the following exceptions: ? 48% of cases tested (19 of 40 cases) were closed within 60 days which is less than the required 70% ? 63% of cases tested (25 of 40 cases) were closed within 90 days which is less than the required 95% ? 73% of cases tested (29 of 40 cases) were closed within 120 days which is less than the required 98% ? The remaining 28% of cases tested (11 of 40 cases) were closed between 141 and 277 days. Questioned costs: Undetermined. Cause: The Division experienced staffing shortages and other pressures related to the COVID-19 pandemic which impacted its ability to meet the required BAM investigation time limits for closing cases. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395. Views of responsible officials: The BAM Unit experienced high turnover volumes during the pandemic, creating a backlog of UI Benefit investigations. The pandemic also changed the workforce dynamic, creating a culture of fully remote jobs in many job markets, which left most State agencies struggling to fill positions; because of this, State Government lost its competitive edge as an employer, resulting in low applicant response to job postings. It took the BAM unit several job reposting?s to get vacancies filled. However, we have filled most of the vacancies and will conduct interviews on Friday, 03/24/23, to fill the remaining two vacancies in the unit. We also recently made a change to our training strategy. There will be consecutive weeks of training in a classroom setting, along with OTJT. The BAM unit also assigns all available NASWA training to new hires during their first weeks of employment. We chose this training strategy to provide all new hires with consistent training to ensure understanding of the BAM investigative process. In addition, we will be hiring a Sr. accountant who will focus on all backlog items only. We are also in the process of converting all paper-driven methods to fully electronic ones. All BAM employees will receive the necessary tools, training, and work-from-home equipment for working successfully from home, allowing us to maintain production in case of another catastrophic event.
Reference Number: 2022-005 Prior Year Finding: 2021-005 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? Employer Experience Rating Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Certain benefits accrue to states and employers as a result of the state having a federally approved experience-rated UI tax system. All states currently have an approved system. For the purpose of proper administration of the system, the SWA maintains accounts, or subsidiary ledgers, on a state UI taxes received or due from individual employers, and the UI benefits charged to the employer. The employer?s ?experience? with the unemployment of former employees is the dominant factor in the SWA computation of the employer?s annual state UI tax rate. The computation of the employer?s annual tax rate is based on state UI law (26 USC 3303). Control: Per 2 CFR section 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 be in compliance 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: The Division incorrectly calculated employer experience ratings. Quarterly tax reports contained employer payments that were made at a rate inconsistent with the assigned contribution rate. Context: Exceptions noted in 19 of 60 employer experience rates selected for testing. Questioned costs: Undetermined. Cause: The Division is behind in making adjustments and issuing refunds to employers utilizing incorrect rates. Effect: Incorrect employer experience rates were applied to employers. Recommendation: The Division should review and enhance procedures and controls to ensure that employer experience rates are properly calculated and applied. Views of responsible officials: MERIT rating was completed on a Emergency Rule due to COVID 19 pandemic. Mainframe system required manual intervention to complete this special law. DOL does not consider the rate the employer places on the UC8 tax form only the rate assessed. The accounts that were incorrect were a result of the special rule and needed constant manual intervention. Should an overpayment occur DOL notifies employer of credit and allows them to utilize that on future quarterly payments. If the credit cannot be used we issue a check for the refund. DOL Staff created Emergency Rule 21 changing the tax table to correct the mainframe issue.
Reference Number: 2022-006 Prior Year Finding: 2021-003 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 2208A, Quarterly UI Above-Base Report Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 2208A, Quarterly UI Above-Base Report (OMB No. 1205-0132) ? Quarterly report of staff years worked and paid by program category. Reports are due no later than 30 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The ETA 2208A ? Quarterly UI Above-Base Report was not filed timely. Context: Reports for the 9/30/2021 and 3/31/2022 reports were selected for testing and we noted that one of the two reports was not filed timely. The 3/31/2022 ETA 2208A report was due by 4/30/2021 and it was submitted on 5/18/2022, or 18 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed no later than 30 days after the end of each quarter. Effect: The ETA 2208A report was not filed timely which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ETA 2208A ? Quarterly UI Above-Base Reports are submitted no later than 30 days after the end of each quarter. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 30 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 20 days after quarter end.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9050 - Time Lapse of All First Payments except Workshare Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit periodic reporting to evaluate the performance of the states? UI programs. The ETA 9050?Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 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: The Division did not submit the ETA 9050?Time Lapse of All First Payments except Workshare Report timely for the month ended December 31, 2021. Context: One of three monthly ETA 9050 reports selected for testing was filed untimely. The report for the month ended December 31, 2021 was required to be submitted electronically no later than January 20, 2022, but the Division submitted the report seven days late on January 27, 2022. Questioned costs: None noted. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9050 report was submitted by the 20th of the month following the month to which the data relates. Internal controls did not prevent or detect the error. Effect: The ETA 9050 report was not filed timely for the month ending December 31, 2021 which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and enhance procedures and internal controls to ensure that ETA 9050 reports are submitted timely, by the 20th of the month following the month to which the data relates. Views of responsible officials: DE has put a process in place to monitor and track the progress and timeliness of all ETA reporting. Auto-reminders will be created to notify all units responsible for ETA reports two weeks before the due date.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9130, Financial Status Report, UI Programs Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9130-Financial Status Report, UI Programs report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). Control: Per 2 CFR section 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: The Cumulative Federal Share of Expenditures reported on the ETA 9130 ? Financial Status Report, UI Programs submitted by the Division did not tie to supporting documentation. Context: Twenty ETA 9130 reports were selected for testing consisting of 9 reports for the 9/30/2021 quarter and 11 reports for the 3/31/2022 quarter. For 4 of the 11 reports submitted for the 3/31/2022 quarter, the Cumulative Federal Share of Expenditures on Line 10e did not tie to supporting documentation. Specifically, we noted the following exceptions: ? Grant UI34707CI0: The amount reported was $105,971 greater than supporting documentation. ? Grant UI34707Z30: The amount reported on Line 10e was $118,111 greater than supporting documentation. ? Grant UI34707C80: The amount reported on Line 10e was $23,231 greater than supporting documentation. ? Grant UI34707CA0: The amount reported on Line 10e was $707 greater than supporting documentation. Questioned costs: Questioned costs of $248,020 represent the federal share reported in excess of supporting documentation. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9130 reports were accurate and tied to supporting documentation. Internal controls did not prevent or detect the error. Effect: The Division submitted inaccurate ETA 9130 reports for the 3/31/2022 quarter and the Cumulative Federal Share of Expenditures exceeded the amount contained in supporting documentation. Recommendation: We recommend the Division review and enhance procedures and internal controls to ensure that ETA 9130 reports are submitted accurately and that they tie to supporting documentation. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 45 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 30 days after quarter end.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state Unemployment Insurance (UI) tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state unemployment compensation (UC) law that conforms with federal UC law. Control: Per 2 CFR section 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: The Division of Unemployment Insurance (Division) did not maintain documentation supporting claimant eligibility and an error was noted in the amount paid to a claimant. Context: Forty claimants were selected for testing and the following exceptions were noted: ? For 1 of 40 claimants, documentation could not be provided that a weekly certification occurred for the claim week. ? For 2 of 40 claimants, documentation could not be provided for the claimants? wages during the base period used to calculate the weekly benefit amount (WBA) and maximum benefit amount (MBA). Therefore, the claimants? WBA and MBA were unable to be verified. ? For 1 of 40 claimants, the claimant?s WBA was calculated as $238, but they were paid $171. Questioned costs: Undetermined. Cause: The Division?s procedures and internal controls were not sufficient to ensure that it issued unemployment compensation payments accurately and that documentation to support claimant eligibility was retained. Effect: The accuracy of benefit payment amounts could not be verified, and one claimant was paid less than the benefit payment to which they were entitled. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that it retains documentation for claimant eligibility and that benefit payments are accurate in accordance with program requirements. Views of responsible officials: We will continue to utilize and enhance of customer service management tools and centralize where documentation is retained. We will continue to review program requirements and ensure they are reviewed, and implemented, and processed correctly. We will review and ask for clarity regarding UIPLs when there is a discrepancy. We are also looking to modernization our systems to house all our documentations.
Reference Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch; ? 95% of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 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: The Division did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Forty cases were selected for testing. The Division did not meet the required time limits for closing cases within 60, 90, or 120 days. Specifically, we noted the following exceptions: ? 48% of cases tested (19 of 40 cases) were closed within 60 days which is less than the required 70% ? 63% of cases tested (25 of 40 cases) were closed within 90 days which is less than the required 95% ? 73% of cases tested (29 of 40 cases) were closed within 120 days which is less than the required 98% ? The remaining 28% of cases tested (11 of 40 cases) were closed between 141 and 277 days. Questioned costs: Undetermined. Cause: The Division experienced staffing shortages and other pressures related to the COVID-19 pandemic which impacted its ability to meet the required BAM investigation time limits for closing cases. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395. Views of responsible officials: The BAM Unit experienced high turnover volumes during the pandemic, creating a backlog of UI Benefit investigations. The pandemic also changed the workforce dynamic, creating a culture of fully remote jobs in many job markets, which left most State agencies struggling to fill positions; because of this, State Government lost its competitive edge as an employer, resulting in low applicant response to job postings. It took the BAM unit several job reposting?s to get vacancies filled. However, we have filled most of the vacancies and will conduct interviews on Friday, 03/24/23, to fill the remaining two vacancies in the unit. We also recently made a change to our training strategy. There will be consecutive weeks of training in a classroom setting, along with OTJT. The BAM unit also assigns all available NASWA training to new hires during their first weeks of employment. We chose this training strategy to provide all new hires with consistent training to ensure understanding of the BAM investigative process. In addition, we will be hiring a Sr. accountant who will focus on all backlog items only. We are also in the process of converting all paper-driven methods to fully electronic ones. All BAM employees will receive the necessary tools, training, and work-from-home equipment for working successfully from home, allowing us to maintain production in case of another catastrophic event.
Reference Number: 2022-005 Prior Year Finding: 2021-005 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Special Tests and Provisions ? Employer Experience Rating Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Certain benefits accrue to states and employers as a result of the state having a federally approved experience-rated UI tax system. All states currently have an approved system. For the purpose of proper administration of the system, the SWA maintains accounts, or subsidiary ledgers, on a state UI taxes received or due from individual employers, and the UI benefits charged to the employer. The employer?s ?experience? with the unemployment of former employees is the dominant factor in the SWA computation of the employer?s annual state UI tax rate. The computation of the employer?s annual tax rate is based on state UI law (26 USC 3303). Control: Per 2 CFR section 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 be in compliance 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: The Division incorrectly calculated employer experience ratings. Quarterly tax reports contained employer payments that were made at a rate inconsistent with the assigned contribution rate. Context: Exceptions noted in 19 of 60 employer experience rates selected for testing. Questioned costs: Undetermined. Cause: The Division is behind in making adjustments and issuing refunds to employers utilizing incorrect rates. Effect: Incorrect employer experience rates were applied to employers. Recommendation: The Division should review and enhance procedures and controls to ensure that employer experience rates are properly calculated and applied. Views of responsible officials: MERIT rating was completed on a Emergency Rule due to COVID 19 pandemic. Mainframe system required manual intervention to complete this special law. DOL does not consider the rate the employer places on the UC8 tax form only the rate assessed. The accounts that were incorrect were a result of the special rule and needed constant manual intervention. Should an overpayment occur DOL notifies employer of credit and allows them to utilize that on future quarterly payments. If the credit cannot be used we issue a check for the refund. DOL Staff created Emergency Rule 21 changing the tax table to correct the mainframe issue.
Reference Number: 2022-006 Prior Year Finding: 2021-003 Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 2208A, Quarterly UI Above-Base Report Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: ETA 2208A, Quarterly UI Above-Base Report (OMB No. 1205-0132) ? Quarterly report of staff years worked and paid by program category. Reports are due no later than 30 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The ETA 2208A ? Quarterly UI Above-Base Report was not filed timely. Context: Reports for the 9/30/2021 and 3/31/2022 reports were selected for testing and we noted that one of the two reports was not filed timely. The 3/31/2022 ETA 2208A report was due by 4/30/2021 and it was submitted on 5/18/2022, or 18 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed no later than 30 days after the end of each quarter. Effect: The ETA 2208A report was not filed timely which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ETA 2208A ? Quarterly UI Above-Base Reports are submitted no later than 30 days after the end of each quarter. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 30 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 20 days after quarter end.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9050 - Time Lapse of All First Payments except Workshare Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit periodic reporting to evaluate the performance of the states? UI programs. The ETA 9050?Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 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: The Division did not submit the ETA 9050?Time Lapse of All First Payments except Workshare Report timely for the month ended December 31, 2021. Context: One of three monthly ETA 9050 reports selected for testing was filed untimely. The report for the month ended December 31, 2021 was required to be submitted electronically no later than January 20, 2022, but the Division submitted the report seven days late on January 27, 2022. Questioned costs: None noted. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9050 report was submitted by the 20th of the month following the month to which the data relates. Internal controls did not prevent or detect the error. Effect: The ETA 9050 report was not filed timely for the month ending December 31, 2021 which could impact the federal agency?s ability to monitor the program. Recommendation: The Division should review and enhance procedures and internal controls to ensure that ETA 9050 reports are submitted timely, by the 20th of the month following the month to which the data relates. Views of responsible officials: DE has put a process in place to monitor and track the progress and timeliness of all ETA reporting. Auto-reminders will be created to notify all units responsible for ETA reports two weeks before the due date.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Reporting ? ETA 9130, Financial Status Report, UI Programs Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9130-Financial Status Report, UI Programs report is used to report program and administrative expenditures. All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). Control: Per 2 CFR section 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: The Cumulative Federal Share of Expenditures reported on the ETA 9130 ? Financial Status Report, UI Programs submitted by the Division did not tie to supporting documentation. Context: Twenty ETA 9130 reports were selected for testing consisting of 9 reports for the 9/30/2021 quarter and 11 reports for the 3/31/2022 quarter. For 4 of the 11 reports submitted for the 3/31/2022 quarter, the Cumulative Federal Share of Expenditures on Line 10e did not tie to supporting documentation. Specifically, we noted the following exceptions: ? Grant UI34707CI0: The amount reported was $105,971 greater than supporting documentation. ? Grant UI34707Z30: The amount reported on Line 10e was $118,111 greater than supporting documentation. ? Grant UI34707C80: The amount reported on Line 10e was $23,231 greater than supporting documentation. ? Grant UI34707CA0: The amount reported on Line 10e was $707 greater than supporting documentation. Questioned costs: Questioned costs of $248,020 represent the federal share reported in excess of supporting documentation. Cause: The Division?s procedures were not sufficient to ensure that the ETA 9130 reports were accurate and tied to supporting documentation. Internal controls did not prevent or detect the error. Effect: The Division submitted inaccurate ETA 9130 reports for the 3/31/2022 quarter and the Cumulative Federal Share of Expenditures exceeded the amount contained in supporting documentation. Recommendation: We recommend the Division review and enhance procedures and internal controls to ensure that ETA 9130 reports are submitted accurately and that they tie to supporting documentation. Views of responsible officials: The Fiscal department has added to our Policy and Procedures the terms of the reporting period being 45 days after then end of the quarter. It was also posted on a group calendar to begin work on the reports at 30 days after quarter end.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Department Name: Department of Labor State Division Name: Division of Unemployment Insurance Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340502055A10 (10/1/2019 ? 12/31/2022), UI347072055A10 (4/1/2020 ? 6/30/2023), UI372152255A10 (10/1/2021 ? 12/31/2024) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state Unemployment Insurance (UI) tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state unemployment compensation (UC) law that conforms with federal UC law. Control: Per 2 CFR section 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: The Division of Unemployment Insurance (Division) did not maintain documentation supporting claimant eligibility and an error was noted in the amount paid to a claimant. Context: Forty claimants were selected for testing and the following exceptions were noted: ? For 1 of 40 claimants, documentation could not be provided that a weekly certification occurred for the claim week. ? For 2 of 40 claimants, documentation could not be provided for the claimants? wages during the base period used to calculate the weekly benefit amount (WBA) and maximum benefit amount (MBA). Therefore, the claimants? WBA and MBA were unable to be verified. ? For 1 of 40 claimants, the claimant?s WBA was calculated as $238, but they were paid $171. Questioned costs: Undetermined. Cause: The Division?s procedures and internal controls were not sufficient to ensure that it issued unemployment compensation payments accurately and that documentation to support claimant eligibility was retained. Effect: The accuracy of benefit payment amounts could not be verified, and one claimant was paid less than the benefit payment to which they were entitled. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that it retains documentation for claimant eligibility and that benefit payments are accurate in accordance with program requirements. Views of responsible officials: We will continue to utilize and enhance of customer service management tools and centralize where documentation is retained. We will continue to review program requirements and ensure they are reviewed, and implemented, and processed correctly. We will review and ask for clarity regarding UIPLs when there is a discrepancy. We are also looking to modernization our systems to house all our documentations.
Reference Number: 2022-010 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Department Name: Office of the Governor Federal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP0139 (3/3/2021 ? 12/31/2024) SLFRP2629 (3/3/2021 ? 12/31/2024) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Reporting requirements for Coronavirus State and Local Fiscal Recovery Funds include the following: 1) Interim Report: States were required to submit a one-time interim report to the U.S. Treasury?s State and Local Relief Funds (SLRF) portal with expenditures by Expenditure Category from the date of award to July 31, 2021, by August 31, 2021 or sixty (60) days after first receiving funding if the recipient?s date of award was between July 15, 2021 and October 15, 2021. The recipient was required to enter obligations and expenditures and, for each, select the specific expenditure category from the available options. 2) Project and Expenditure Reports: Each recipient is required to report obligations and expenditures by project according to its corresponding Expenditure Category. The Project and Expenditure Report provides information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. For purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. An expenditure is the amount that has been incurred as a liability of the entity (the service has been rendered or the good has been delivered to the entity). An initial quarterly Project and Expenditure Report covered three calendar quarters from March 3, 2021 to December 31, 2021 and was required to be submitted to Treasury by January 31, 2022. Subsequent quarterly reports cover one calendar quarter and are required to be submitted to Treasury by the last day of the month following the end of the period covered. Control: Per 2 CFR section 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: The Interim Report was not filed timely and supporting documentation did not agree with amounts reported for obligations, expenditures and subawards on the Project and Expenditure Reports. Context: Program components and projects are managed by the Office of the Governor (Office) and by several agencies throughout the State. The Office submits all required reports on the State?s behalf. For projects not managed directly by the Office, State agencies provide supporting documentation to the Office for compilation and inclusion on the State?s reports. The following reports were selected for testing: 1) The Interim Report 2) Project and Expenditure Reports for the 3/31/2022 and 6/30/2022 quarters: From these reports, 51 projects were selected for testing obligations and expenditures, 40 subawards greater than $50,000 and 10 subawards less than $50,000 were selected. The following exceptions were noted: 1) The Interim Report was required to be submitted by 8/31/2021 and it was submitted on 9/2/2021, or 2 days late. 2) Project and Expenditure Reports: o Obligations: For 40 of 51 projects greater than $50,000, obligations did not agree to supporting documentation. For 32 of the 40 exceptions, the Office reported cumulative expenditures incurred rather than cumulative obligations. o Expenditures: For 20 of 51 projects greater than $50,000, expenditures did not agree to supporting documentation. For 18 of the 20 exceptions, the Office reported the subrecipients? expenditures rather than the Office?s expenditures. o Subawards greater than $50,000: For 16 of 20 subawards greater than $50,000, reported obligations did not match supporting documentation and 11 of 20 subawards were not reported. o Subawards less than $50,000: For 2 of 10 subawards, the subawards exceeded $50,000, but they were reported in the aggregate with subawards less than $50,000. Questioned costs: Undetermined. Cause: Internal Controls were not operating effectively to ensure that the Interim Report was submitted timely, and that Project and Expenditure Reports were submitted accurately. Effect: Obligations, expenditures, and subaward information reported to Treasury was incorrect. Recommendation: The Office should enhance its procedures and internal controls regarding preparation of the Project and Expenditure Reports to ensure that information reported is accurate and agrees to supporting documentation. We further recommend that the Office work with State agencies which incur costs under the program to develop procedures and controls to ensure that they provide accurate information to the Office on a timely basis to facilitate timely and accurate project reporting. Views of responsible officials: There is no disagreement with the audit finding but here is our explanation. The American Rescue Plan State and Local Fiscal Recovery Funds are awarded in advance to our subrecipients based on language in each subrecipient agreement. Within United States Treasury?s reporting portal, we are required to report subawards for each subrecipient and related expenditures and programmatic details. We made the decision to report subrecipient activity for each subaward based on the quarterly data provided to our team. For instance, a subrecipient awarded $50,000 with quarterly expenditures of $10,000 were reported as expending $10,000 on the quarterly UST Project and Expenditure report. This decision was made because it most accurately accounted for the status of a project and the utilization of the funding. This approach resulted in a discrepancy between the expenses in FSF and the UST reporting. Based on guidance from CLA, coming out of the single audit, our team will be reporting the subrecipient activity as the amount paid to each, not based on the expenses of their subaward. A subrecipient awarded and paid $50,000 will be reported as an expenditure of $50,000. We will continue to track and capture subrecipient utilization of the funding through compliance monitoring and quarterly updates. The previously reported amounts in U.S. Treasury?s system will be adjusted for the quarter ending March 31, 2023. This action will resolve CLA?s reporting finding. CLA will test the 3/31/23 and 6/30/23 reports during next year?s single audit to ensure the finding was corrected.
Reference Number: 2022-011 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP0139 (3/3/2021 ? 12/31/2024) SLFRP2629 (3/3/2021 ? 12/31/2024) Compliance Requirement: Procurement, Suspension & Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR section 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. Per 29 Del C. Chapter 69, section 6981 Large professional service procurement process: (a) Any state contract for which an agency is a party with probable fees, including reimbursable expenses and amendments, greater than the threshold amount or amounts established by the Contracting and Purchasing Advisory Council pursuant to ? 6913 of this title for the completed job will be subject to the provisions of this subchapter. (b) Each agency shall publicly announce, not less than once a week for two consecutive weeks in a newspaper published or circulated in each county of the State, when professional services are required (c) Each agency shall publicly announce each professional services contract subject to subsection (a) of this section by electronic publication accessible to the public in a manner prescribed pursuant to ? 6902(9) of this title for two consecutive weeks. (d) Such announcement shall include: (1) The project identification; (2) General description and scope of the project; (3) Location; (4) Deadline for submission of brief letters of interest; (5) Criteria for selection of professionals including any special criteria required for any particular project; (6) Indication of how interested professionals can apply for consideration; (7) The agency?s intention to award to more than one firm, if applicable; and (8) A description of the selection process to be used, as defined in ? 6982 of this title. (f) Each agency shall establish written administrative procedures for the evaluation of applicants. These administrative procedures shall be adopted and made available to the public by each agency before publicly announcing an occasion when professional services are required. One or more of the following criteria may be utilized in ranking the applicants under consideration: (1) Experience and reputation; (2) Expertise (for the particular project under consideration); (3) Capacity to meet requirements (size, financial condition, etc.); (4) Location (geographical); (5) Demonstrated ability; (6) Familiarity with public work and its requirements; or (7) Distribution of work to individuals and firms or economic considerations. (g) In addition to the above, other criteria necessary for a quality, cost-effective project may be utilized. (h) Each project shall be given individual attention, and a weighted average may be applied to criteria according to its importance to each project. (i) For the selection process described in ? 6982(b) of this title, price may be a criteria used to rank applicants under consideration. Per 29 Del C. Chapter 69, section 6982 Selection: (b) Agencies shall use the selection process described in paragraphs (b)(1) through (3) of this section. (1) Based upon the criteria established pursuant to ? 6981(f) of this title, the agency shall determine all applicants that meet the minimum qualifications to perform the required services. (2) The agency shall then interview at least one of the qualified firms. The agency may negotiate with one firm without terminating negotiations with another firm and may negotiate with one or more firms during the same period. At any point in the negotiation process, the agency may, at its discretion, terminate negotiations with any or all firms. (3) The agency may require the firm with whom the agency is negotiating to execute a truth-in-negotiation certificate stating the wage rates and other factual unit costs supporting the compensation are accurate, complete and current at the time of contracting. All professional service contracts shall provide that the original contract price and any additions thereto shall be adjusted to exclude significant sums where the agency determines the contract price was increased due to inaccurate, incomplete or noncurrent wage rates and other factual unit costs. All such contract adjustments shall be made within one year following the end of the contract. Sole source procurement shall be avoided, except when no reasonable alternative sources exist. A written determination by the agency for the sole source procurement shall be included in the agency?s contract file. (29 Del. C. ?6904(i)) 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. 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 Control: Per 2 CFR Section 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: The Division was unable to provide documentation to support compliance with the required State procurement processes for a professional services contract. In addition, the Division did not provide support that the suspension and debarment status of the vendor was checked before the contract was awarded. Context: For one of eleven contracts selected for testing, no support was provided for the how the contract was procured. Further, the suspension and debarment status of the vendor was not documented for that contract. Questioned costs: Undetermined. Cause: The Division?s internal controls were not sufficient to ensure that Statewide procurement policies and Federal suspension and debarment regulations were followed for purchases made for the program. Effect: The Division is not compliant with federal and state procurement and suspension and debarment requirements. 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 State. Recommendation: The Division should review and enhance controls and procedures to ensure that it follows the State?s procurement policy and Federal suspension and debarment regulations for all goods and services charged to the program. Views of responsible officials: We agree with the auditor?s recommendation. Ongoing meeting, training, and monitoring have helped and will continue to help DSS staff to achieve compliance. The following actions have been taken to improve the Procurement process. ? Program unit staff will receive Procurement Bootcamp training on contract rules. ? Program unit & Fiscal unit staff will monitor and track all contracts, MOU/MOA?s and agreement so they are in compliance with State Procurement policy. ? Fiscal unit will ensure they have an approval to pay for any invoices. ? Conduct monthly meetings with OSEC CMP Managers and DSS Fiscal unit.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-030 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Return of Title IV Funds Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. Per the Code of Federal Regulations, 34 CFR 668.22, the amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. The institution must return the lesser of (1) the total amount of unearned Title IV assistance, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. If, for a non-term program an institution chooses to calculate the treatment of Title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, ?total institutional charges incurred by the student for the payment period? is the greater of (1) the prorated amount of institutional charges for the longer period, or (2) the amount of Title IV assistance retained for institutional charges as of the student?s withdrawal date. Control: Per 2 CFR section 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: DTCC did not calculate a Title IV refund for a student that had withdrawn from the institution. Context: Forty students who withdrew from the institution during the year were selected for testing. For 1 of 40 students, a Title IV refund was not calculated. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that a Title IV refund was calculated for all students who withdrew from the institution during the year. At the end of the Spring 2022 semester the student had an earned grade of "F" and the registrar?s office changed the student's official grade to withdrawn after the Spring 2022 semester but did not inform Financial Aid. As such, Financial Aid never performed Title IV refund calculation for the student. Effect: Title IV refunds were not processed in accordance with program regulations and DTCC retained Title IV funds it had not earned. Recommendation: We recommend that DTCC review its procedures and controls pertaining to the return of Title IV funds to ensure that refunds are properly calculated on a timely basis. Views of responsible officials: Please note there is no monetary value related to this finding. The above-mentioned finding is a result of DTCC not completing an R2T4 calculation for one student that had their academic record updated after the semester in question had ended through a hardship withdrawal process. Our spring 2022 semester ended on May 14, 2022. On June, 21, 2022, the student was granted a hardship withdrawal for all courses registered and the student record was backdated to update the college?s decision. While there are no changes to a student?s federal aid eligibility in these instances, we are aware a calculation should have been completed to acknowledge the update within the student academic record. In response to the finding, DTCC will extend the time period for when reports are ran that identify adjustments. In addition, the member of the college?s hardship withdrawal committee representing the financial aid office will notify individuals responsible for R2T4 calculations when committee approvals are decided.
Reference Number: 2022-031 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Special Tests and Provisions: Enrollment Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS, although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Control: Per 2 CFR section 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: DTCC inaccurately reported the enrollment status of a student. Context: For 1 of 40 students selected for testing, the enrollment status was inaccurately reported for the Fall 2021 semester. The student was enrolled half-time during the fall semester, but they received an incomplete grade for one course and their status was reported as withdrawn as of 12/11/2021. However, per DTCC?s Incomplete Policy, the student successfully completed the course during the following semester and the incomplete grade was retroactively changed to passing on 1/14/2022. In addition, successful completion of the course allowed the student to graduate effective 12/11/2021. Therefore, the student?s status should have been reported as half-time for the fall semester and as graduated on the Spring 2022 semester report. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students? enrollment status was correctly reported. Effect: Inaccurate student enrollment information can negatively impact the Federal agency?s ability to administer Title IV programs which depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Recommendation: We recommend that DTCC review procedures and controls pertaining to the reporting of enrollment status, particularly when a student?s status changes retroactively, to ensure that enrollment status is accurately reported. Views of responsible officials: The college will implement the below corrective action plan and quality control measures. These measures include: 1. Having a single Registrar (or Registrar?s Office staff member) responsible for degree reporting. This person will be responsible for coordinating efforts and ensuring degree reporting is done correctly and in compliance. 2. The degree verify report will be completed at the end of each semester and during the middle of each subsequent semester to identify any late degree awards from the previous semester. 3. Monthly audits will run to identify any students who are missed during the two planned submissions. These students will be reported to the appointed Registrar who will manually enter them into the NSCH and NSLDS, if necessary.
Reference Number: 2022-032 Prior Year Finding: No Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: July 1, 2021 to June 30, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Undergraduate and Graduate students are eligible to receive financial aid for a limited time while pursuing a degree. Once a student exceeds 150 percent of the number of credits that it takes to obtain a degree, they will be ineligible for financial aid. Control: Per 2 CFR section 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: DTCC approved financial aid to students who exceeded the satisfactory academic progress (SAP) 150% credit threshold during the 2021-2022 academic year. Context: Two of 40 students selected for testing had attempted more than 150% of the credits required to receive an undergraduate degree but were awarded financial aid for the 2021-2022 academic year. These students had not submitted a SAP appeal. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that students awarded financial aid were in compliance with the SAP 150% credit threshold. Effect: Ineligible students were awarded financial aid for the 2021-2022 academic year. Recommendation: We recommend that DTCC review procedures and controls pertaining to the eligibility of students for financial aid regarding the SAP 150% credit threshold. We further recommend that DTCC reviews the eligibility of other students enrolled during the 2022 and 2023 academic years and properly adjusts student accounts as necessary. Views of responsible officials: The financial aid office worked with members of our IT Applications and Web Services department to discover a failure in the script being run within Banner to identify the full student population related to the maximum credits allowed within a program of study. A system patch to the processing script is currently being developed and we anticipate this process to be in good working order April 2023 after testing. In order to remedy the error, the financial aid office audited all Fiscal Year 2022 activity. Of the 13,333 students enrolled Title IV aid eligible programs during the 2021-22 academic year, five students (.0003%) received federal aid erroneously without the opportunity to submit an appeal. The amount of Pell and Direct Loans disbursed for these students totaled $15,725, which reflects .0004% of the total Pell and Direct loan funds disbursed during the 2021-22 academic year by the college. We are currently taking corrective action on each student identified and will be returning all funds disbursed in error to the U.S. Dept. of Education. In addition, we are currently reassessing all Fiscal Year 2023 student records to identify and correct any student accounts not recognized in our reporting.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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; (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 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Twelve of sixty time and effort certifications selected for testing were not certified and obtained until after the documentation was requested for audit. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. ELC Grant Managers use various tools to monitor personnel funding: Organizational charts, grant budget requests, wage workups, and funding transfer notifications (FTNs) for budget positions associated with ELC. Our process has been overhauled and time and effort attestation and certification forms are being collected for all grants managed by the DPH Laboratory every 6 months. In addition, ELC Grant Managers at DPHL developed a new standard operating procedure (SOP), worked with DMS to be trained on the requirements, and work towards a new internal standard.
Reference Number: 2022-013 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities are required to submit Performance Measures and Progress Monitoring reports on a quarterly basis, no later than 30 days after the end of each quarter, in accordance with the terms and conditions of the Federal award. Control: Per 2 CFR section 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: The Division was unable to provide support that quarterly Progress Monitoring Reports were filed timely. Context: Six quarterly Performance Measures reports, and five quarterly Progress Monitoring reports were selected for testing. The Division was unable to provide support that five of five quarterly Progress Monitoring reports were filed timely. Questioned costs: None noted. Cause: The Division?s procedures and controls were not sufficient to ensure that quarterly Progress Monitoring reports were filed timely. Effect: The Division was not in compliance with the program?s reporting requirements. Recommendation: The Division should review and enhance internal controls and procedures to ensure that quarterly Progress Monitoring reports are filed timely and that it maintains documentation supporting timely submission. Views of responsible officials: The Division of Public Health (DPH) filed its quarterly Progress Monitoring reports timely but failed to maintain supporting documentation. The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior year finding. DPHL has been in discussion with the Federal Program regarding a timestamp function within the REDCap reporting system. Initial information confirmed by the sponsor, indicated the function would be available; however, DPHL was later advised that the functionality would not be available. As a result, DPHL started working on a process to capture performance report submission dates via PDF screenshots. The process continues to evolve and when fully implemented will allow us to provide verification of timely submitted performance reports.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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; (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 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Twelve of sixty time and effort certifications selected for testing were not certified and obtained until after the documentation was requested for audit. Questioned costs: Undetermined. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. ELC Grant Managers use various tools to monitor personnel funding: Organizational charts, grant budget requests, wage workups, and funding transfer notifications (FTNs) for budget positions associated with ELC. Our process has been overhauled and time and effort attestation and certification forms are being collected for all grants managed by the DPH Laboratory every 6 months. In addition, ELC Grant Managers at DPHL developed a new standard operating procedure (SOP), worked with DMS to be trained on the requirements, and work towards a new internal standard.
Reference Number: 2022-013 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Public Health Federal Program: COVID-19 ? Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Assistance Listing Number: 93.323 Award Number and Year: NU50CK000497 (8/1/2019 ? 7/31/2024) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Non-federal entities are required to submit Performance Measures and Progress Monitoring reports on a quarterly basis, no later than 30 days after the end of each quarter, in accordance with the terms and conditions of the Federal award. Control: Per 2 CFR section 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: The Division was unable to provide support that quarterly Progress Monitoring Reports were filed timely. Context: Six quarterly Performance Measures reports, and five quarterly Progress Monitoring reports were selected for testing. The Division was unable to provide support that five of five quarterly Progress Monitoring reports were filed timely. Questioned costs: None noted. Cause: The Division?s procedures and controls were not sufficient to ensure that quarterly Progress Monitoring reports were filed timely. Effect: The Division was not in compliance with the program?s reporting requirements. Recommendation: The Division should review and enhance internal controls and procedures to ensure that quarterly Progress Monitoring reports are filed timely and that it maintains documentation supporting timely submission. Views of responsible officials: The Division of Public Health (DPH) filed its quarterly Progress Monitoring reports timely but failed to maintain supporting documentation. The Division of Public Health Laboratory (DPHL) has been working to implement corrective action, as this was a prior year finding. DPHL has been in discussion with the Federal Program regarding a timestamp function within the REDCap reporting system. Initial information confirmed by the sponsor, indicated the function would be available; however, DPHL was later advised that the functionality would not be available. As a result, DPHL started working on a process to capture performance report submission dates via PDF screenshots. The process continues to evolve and when fully implemented will allow us to provide verification of timely submitted performance reports.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Delaware Health Care Commission (DHCC) Federal Program: 1332 State Innovation Waivers Assistance Listing Number: 93.423 Award Number and Year: SIWIW200012 (1/1/2020 ? 12/31/2024) Compliance Requirement: Reporting ? Quarterly Performance Reports Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Grantees are required to submit both quarterly and annual reports that outline specific metrics and programmatic updates requested by the federal partners. a. Quarterly Reporting ? Grantees are required to submit quarterly reports. At a minimum, these reports must highlight information on all ongoing operational challenges, as well as plans for, and results of, associated corrective action. This information is integral to calculating the state?s pass-through funding amount and for ensuring the grantee?s compliance with the statutory guard rails. Reports are due 60 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: DHCC did not submit a quarterly performance report timely. Context: Quarterly Performance Reports for the 9/30/2021 and 3/31/2022 quarters were selected for testing. The Quarterly Performance Report for the 3/31/2022 quarter was not submitted timely. The report was due 5/31/2022 and it was submitted 6/6/2022, or six days late. Questioned costs: None noted. Cause: DHCC?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Effect: The quarterly performance report was not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: DHCC should review and enhance its reporting procedures and controls to ensure that quarterly performance reports are submitted no later than 60 days after the end of each quarter. Views of responsible officials: DHCC acknowledges the 5/31/22 quarterly report was not submitted timely and is committed to enhancing procedures and controls. To ensure future reports are submitted by due date, DHCC will make sure all reporting deadlines are added to DHCC calendar.
Reference Number: 2022-015 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 20210DETANF (10/1/2019 ? 9/30/2025), 2222DETANF (10/1/2021 ? 9/30/2026) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (vi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Be incorporated into the official records of the non-Federal entity; (viii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (ix) 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; (x) Comply with the established accounting policies and practices of the non-Federal entity; (viii) 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. Control: Per 2 CFR section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Context: For five of forty payroll transactions selected for testing, documentation could not be provided to support that employee time and effort charged to the program had been certified and approved. Questioned costs: Questioned costs of $8,231 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division of Social Services (DSS) will review and strengthen its internal controls in regard to time and effort reporting to ensure it can substantiate all reimbursements from federal programs. This review will include other DHSS divisions and state agencies that receive TANF funds for time and effort. Exceptions were due to position changes, retirement and untimely submission of supporting documents. Issues identified by the audit have been corrected.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Social Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 20210DETANF (10/1/2019 ? 9/30/2025), 2222DETANF (10/1/2021 ? 9/30/2026) Compliance Requirement: Reporting ? ACF-196R, TANF Financial Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: States are required to submit the ACF-196R, TANF Financial Report on quarterly basis. Each state files quarterly expenditure data on the state?s use of federal TANF funds, state TANF MOE expenditures, and state expenditures of MOE funds in separate state programs. If a state is expending federal TANF funds received in prior fiscal years, it must file a separate quarterly TANF Financial Report for each fiscal year that provides information on the expenditures of that year?s TANF funds. Reports must be received by the Administration for Children and Families (ACF) within 45 days after the end of each quarter. Control: Per 2 CFR section 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 the 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: The Division did not submit quarterly ACF-196R reports timely. Context: ACF-196R reports for the 9/30/2021 and 3/31/2022 quarters were selected for testing. The 9/30/2021 report was due by 11/14/2021, but it was submitted 3/9/2022, or 115 days late. The report for the quarter ending 3/31/2022 was due by 5/15/2022, but it was submitted on 7/31/2022, or 77 days late. Questioned costs: None noted. Cause: The Division?s procedures and internal controls were not sufficient to ensure that reports were filed timely. Effect: The ACF-196R reports were not filed timely which could impact the Federal agency?s ability to monitor the program. Recommendation: The Division should review and update its reporting procedures and controls to ensure that ACF-196R TANF Financial Reports are submitted no later than 45 days after the end of each quarter. Views of responsible officials: The Division has reviewed and updated its reporting procedures and controls to ensure all federal reports are submitted timely. Exceptions noted in the audit were due to staff turnover and training.
Reference Number: 2022-017 Prior Year Finding: 2021-013 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of State Service Centers Federal Program: COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001DELIEA (10/1/2019 ? 9/30/2021), 2101DELIEA (10/102020 ? 9/30/2022), 2010DEE5C6 (3/11/2021 ? 9/30/2022), 2201DELIEA (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of two subawards selected for testing were reported to FSRS. Total subawards tested were $8,798,444, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division has been working to implement corrective action and has developed internal controls and procedures to ensure that FFATA reporting requirements are met and subawards are reported accurately and timely to FSRS.
Reference Number: 2022-017 Prior Year Finding: 2021-013 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of State Service Centers Federal Program: COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001DELIEA (10/1/2019 ? 9/30/2021), 2101DELIEA (10/102020 ? 9/30/2022), 2010DEE5C6 (3/11/2021 ? 9/30/2022), 2201DELIEA (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of two subawards selected for testing were reported to FSRS. Total subawards tested were $8,798,444, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division has been working to implement corrective action and has developed internal controls and procedures to ensure that FFATA reporting requirements are met and subawards are reported accurately and timely to FSRS.
Reference Number: 2022-018 Prior Year Finding: 2021-014 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program (CHIP) Assistance Listing Number: 93.767 Award Number and Year: 2205DE5021 (10/1/2021 ? 9/30/2023) Compliance Requirement: Period of Performance Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR Section 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: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Further, the Division was unable to provide support for a transaction selected for testing. Context: Eighteen transactions were selected for testing, and we noted the following exceptions: ? Six of eighteen transactions were charged before the allowable period of performance. ? For one of eighteen transactions, the Division was unable to provide supporting documentation and compliance with period of performance could not be verified. Questioned costs: $44,567 represents transactions unsupported or incurred and charged prior to the award?s allowable period of performance. Cause: The Division did not enhance their internal controls and procedures to ensure that expenditures charged to the program were incurred within the award?s period of performance nor that it maintained supporting documentation for expenditures charged to the award. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Division should review and enhance internal controls and procedures to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance, that it maintains supporting documentation, and that supporting documentation is available for audit. Views of responsible officials: The Division will review and enhance internal controls to ensure program expenditures are properly charged. Questioned costs are due to the reporting requirements of this grant. Payments are made based on when invoices are received. Federal requirement is that CHIP draws, expenditures and reporting are done on a cost basis. DMMA reports based on the date of the draw, not the date of the invoice. The Division is exploring ways to meet all grant compliance requirements.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Medical Loss Ratio Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: For all contracts, the state must ensure that each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) submits a report with the data elements specified in 42 CFR sections 438.8(k) and 438.8(n). The report should contain the required 13 data elements in the regulation, reflect the correct reporting years, and contain an attestation of accuracy regarding the calculation of the medical loss ratio. Managed care plans are required to submit the annual report in the time and manner established by the state, which must be within 12 months after the end of the MLR reporting year. The state should have a policy and procedure to indicate when the report(s) are due from plans and should not accept multiple submissions from plans unless the capitation payments are revised retroactively. Control: Per 2 CFR section 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: Documentation to support the Medical Loss Ratio (MLR) reports for one of the state?s MCOs was not readily available for review. States are required to develop and implement internal controls to ensure proper supporting documentation is maintained. More than two months elapsed before the Division was able to provide adequate support for a sample of MLR reports selected for testing. Context: Four reports were required for the two managed care organization providers within the state for the MLR 12-month period ended 12/31/2021. Supporting documentation for two of these reports were not submitted for audit review in a timely manner. Questioned costs: None noted. Cause: The Division?s procedures and controls are not sufficient to ensure timely submission of requested audit documentation. Effect: Lack of timely review and effective controls could cause the Division to be out of compliance with MLR reporting requirements. Recommendation: The Division should review and enhance its procedures and controls regarding MLR reporting to ensure that supporting documentation is readily available upon audit request. Views of responsible officials: The Division will review internal controls and archiving process to ensure all required MLR reporting support documentation is provided in a timely manner during the audit.
Reference Number: 2022-020 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Managed Care Financial Audit Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: The state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each managed care organization (MCO) and post the results of these audits on its website (42 CFR section 438.602(e)). Control: Per 2 CFR section 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: The Division did not conduct or contract for independent audits of its managed care providers within the last three years and as such, results were not posted to their website. Context: For the two managed care providers within the state, the Division did not conduct or contract for the independent audits during the fiscal year under audit or within the last three years. Questioned costs: None noted. Cause: The Division does not have sufficient procedures in place to ensure that independent audits are conducted for its managed care providers at least once every three years. Effect: The Division is unable to verify the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of, each MCO as required by the program. Recommendation: The Division should implement procedures to ensure that it conducts or contracts for independent audits of its managed care providers at least once every three years and posts the results of those audits to their website. Views of responsible officials: The Division will develop a process to ensure the contracted MCO?s have received an independent audit as required and that the results of that audit are posted to the website. In addition, the Division will also utilize our independent Actuary CPA to review the financial data of MCO?s as an additional step in the review process.
Reference Number: 2022-021 Prior Year Finding: 2021-015 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Medicaid and Medical Assistance Federal Program: Children?s Health Insurance Program Medicaid Cluster Assistance Listing Number: 93.767, 93.775, 93.777, 93.778 Award Number and Year: 2105DE5021 (10/1/2020 ? 9/30/2022), 2205DE5021 (10/1/2021 ? 9/30/2023) 2105DE5MAP (10/1/2020 ? 9/30/2021), 2205DE5MAP (10/1/2021 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions ? Provider Eligibility Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the State (42 CFR part 455, subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the OIG exclusion list are not eligible to be enrolled in the Medicaid program (42 CFR 455.436). Control: Per 2 CFR section 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: The Division is not in compliance with federal regulations relating to provider eligibility requirements for both new and revalidated providers. Context: The following exceptions were noted during testing of provider eligibility requirements: ? For 40 of 60 providers, no documentation was available to support that the provider was properly licensed or screened and enrolled in accordance with federal requirements. A license was not provided or the license provided was expired. The provider was not properly screened and enrolled in accordance with 42 CFR Part 455, Subpart E; specifically, no agreements on file, applications outdated, or the provider was not revalidated within the last five years. ? For the same 20 of 60 providers, documentation was not available to support that the provider made all required disclosures to the State in accordance with 2 CFR Part 455, Subpart B. ? For 20 of 60 providers, no documentation was available to support that the Division ensured the provider was not on the OIG?s exclusion list at the time services were provided. Questioned costs: Undetermined, based on lack of information, we were unable to determine if unallowed costs were incurred. Cause: The Division did not consistently follow procedures to determine and monitor provider eligibility. Effect: The Division was unable to support provider eligibility which may result in unallowed costs. Recommendation: The Division should reevaluate its current process and perform additional training for determining and monitoring provider eligibility. More thorough reviews and supervision should be placed around the provider eligibility processes. Views of responsible officials: The Division is reevaluating the current process for validating non-Par provider eligibility. Developing additional training for determining and monitoring provider eligibility are under examination as we search for best practices. Completing more thorough reviews and increased supervisory oversight around the provider eligibility processes are a priority.
Reference Number: 2022-022 Prior Year Finding: 2021-020 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79TI083305 (9/30/2020 ? 9/29/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $8,295,312, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will reevaluate its current process, implement proper controls for FFATA reporting standards, and ensure subawards are reviewed timely. In addition, staff will be assigned to verify information prior to being keyed into FSRS.
Reference Number: 2022-023 Prior Year Finding: 2021-018 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79TI083305 (9/30/2020 ? 9/29/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. Control: Per 2 CFR Section 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: The Division was not able to provide support that it monitored its subrecipients. Context: For 4 of 8 subrecipients selected for testing, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Recommendation: The Division should review and enhance internal controls and procedures to ensure that proper subrecipient monitoring is conducted in accordance with Federal regulations. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-024 Prior Year Finding: 2021-024 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-10 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: The Division was not able to provide support that it furnished required information to its subrecipients at the time of subaward, monitored its subrecipients, or ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: Exceptions were noted in four of eight subrecipients selected for testing (exceptions listed include multiple exceptions for some subrecipients): ? Four of eight subrecipient agreements were missing the following required information: Subrecipient?s Unique Identifier, Federal Award Identification Number (FAIN), Federal Award Date, Federal Award Project Description, Assistance Listing Number and Title. ? For one of eight subrecipients, the Division was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The Division could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. ? For four of eight subrecipients, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The Division should review and enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, also that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $6,649,227, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will develop internal controls and procedures to ensure that FFATA reporting requirements are met and that information submitted in FSRS is accurate and on time.
Reference Number: 2022-026 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Level of Effort Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR section 96.123(a)(10), the Block Grant shall not be used to supplant State funding of alcohol and other drug prevention and treatment programs. Control: Per 2 CFR Section 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: The Division did not meet the program?s level of effort requirements during FY 2022 for Supplement Not Supplant. Context: The State?s requirement for State expenditures during FY 2022 for alcohol and other drug prevention and treatment programs was $30 million and it expended $27 million, for a variance of $3 million. Questioned costs: Undetermined. Cause: The Division did not establish effective procedures and internal controls to ensure that level of effort requirements were met during FY 2022. Effect: The Division was not in compliance with the program?s level of effort requirements for Supplement Not Supplant. The Division expended approximately $3 million less in State funds than was required. Recommendation: The Division should review and enhance procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. Views of responsible officials: The Division will review and enhance its procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. This review is to include a more detailed procedure for gathering and organizing data from the state?s accounting system. Division program staff believe that this requirement was in fact met; however, the current process documentation is not clear enough to provide the level of support needed for the audit.
Reference Number: 2022-027 Prior Year Finding: 2021-025 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (xi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (xii) Be incorporated into the official records of the non-Federal entity; (xiii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (xiv) 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; (xv) Comply with the established accounting policies and practices of the non-Federal entity; (ix) 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. Control: Per 2 CFR Section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Eight payroll transactions were selected for testing and the following exceptions were noted: ? Four of eight time and effort certifications were not certified and obtained until after the documentation was requested for audit. ? No time and effort certifications were provided for three of eight transactions. Questioned costs: Questioned costs of $2,355 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division will improve the current process through enhanced internal controls and updated training for staff to ensure a clear understanding of the requirements for certification and reporting of time and effort when charged to a federal grant.
Reference Number: 2022-024 Prior Year Finding: 2021-024 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-10 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (e) Depending upon the pass-through entity?s assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals: (1) Providing subrecipients with training and technical assistance on program-related matters; and (2) Performing on-site reviews of the subrecipient?s program operations; (3) Arranging for agreed-upon-procedures engagements as described in ? 200.425 Audit services. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: The Division was not able to provide support that it furnished required information to its subrecipients at the time of subaward, monitored its subrecipients, or ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: Exceptions were noted in four of eight subrecipients selected for testing (exceptions listed include multiple exceptions for some subrecipients): ? Four of eight subrecipient agreements were missing the following required information: Subrecipient?s Unique Identifier, Federal Award Identification Number (FAIN), Federal Award Date, Federal Award Project Description, Assistance Listing Number and Title. ? For one of eight subrecipients, the Division was unable to provide support that it ensured the subrecipient was audited as required by Subpart F. The Division could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. ? For four of eight subrecipients, the Division was unable to provide support that it conducted during the award monitoring as required by the Division?s policies and procedures. Questioned costs: Undetermined. Cause: The Division did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure of the Division to detect that its subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F, there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by Division personnel on a timely basis. Recommendation: The Division should review and enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed. Views of responsible officials: The Division has been working to implement corrective action, as this was a prior finding. The implementation timeline overlapped into the current audit period. DSAMH continues to reevaluate its current process and to enhance internal controls and procedures to ensure that all required information is included in all subawards and provided to the subrecipients, also that proper subrecipient monitoring is conducted, and that evaluation of independent audits is performed.
Reference Number: 2022-025 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Division did not report required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $6,649,227, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Division?s policies and procedures were not sufficient to ensure that required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Division develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Division develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS. Views of responsible officials: The Division will develop internal controls and procedures to ensure that FFATA reporting requirements are met and that information submitted in FSRS is accurate and on time.
Reference Number: 2022-026 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Level of Effort Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per 45 CFR section 96.123(a)(10), the Block Grant shall not be used to supplant State funding of alcohol and other drug prevention and treatment programs. Control: Per 2 CFR Section 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: The Division did not meet the program?s level of effort requirements during FY 2022 for Supplement Not Supplant. Context: The State?s requirement for State expenditures during FY 2022 for alcohol and other drug prevention and treatment programs was $30 million and it expended $27 million, for a variance of $3 million. Questioned costs: Undetermined. Cause: The Division did not establish effective procedures and internal controls to ensure that level of effort requirements were met during FY 2022. Effect: The Division was not in compliance with the program?s level of effort requirements for Supplement Not Supplant. The Division expended approximately $3 million less in State funds than was required. Recommendation: The Division should review and enhance procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. Views of responsible officials: The Division will review and enhance its procedures and internal controls to ensure that it expends State funds in accordance with level of effort requirements. This review is to include a more detailed procedure for gathering and organizing data from the state?s accounting system. Division program staff believe that this requirement was in fact met; however, the current process documentation is not clear enough to provide the level of support needed for the audit.
Reference Number: 2022-027 Prior Year Finding: 2021-025 Federal Agency: U.S. Department of Health and Human Services State Department Name: Department of Health and Social Services State Division Name: Division of Substance Abuse and Mental Health Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 - Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: B08TI083060 (10/1/2019 ? 9/30/2021), B08TI083488 (10/1/2020 ? 9/30/2022) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 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: (xi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (xii) Be incorporated into the official records of the non-Federal entity; (xiii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (xiv) 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; (xv) Comply with the established accounting policies and practices of the non-Federal entity; (ix) 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. Control: Per 2 CFR Section 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: The Division did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Time and effort certifications were not certified and obtained timely. Context: Eight payroll transactions were selected for testing and the following exceptions were noted: ? Four of eight time and effort certifications were not certified and obtained until after the documentation was requested for audit. ? No time and effort certifications were provided for three of eight transactions. Questioned costs: Questioned costs of $2,355 represent the amount of unsupported payroll expenditures charged to the grant. Cause: Controls were not operating effectively to ensure that time and effort reporting was performed in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Division should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Division should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: The Division will improve the current process through enhanced internal controls and updated training for staff to ensure a clear understanding of the requirements for certification and reporting of time and effort when charged to a federal grant.
Reference Number: 2022-028 Prior Year Finding: No Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: DEMA could not produce supporting documentation that it reported required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: DEMA was not able to provide supporting documentation for FSRS reporting for four of five subawards selected for testing. Total subawards tested were $9,839,395, and $229,664 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: DEMA?s policies and procedures were not sufficient to ensure that documentation was maintained to support required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: DEMA was unable to provide support that subawards were reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that DEMA enhance internal controls and procedures to ensure that FFATA reporting requirements are met and supporting documentation for submission is maintained. Views of responsible officials: DEMA finance section has created a group account for FFATA reporting using the group email DEMAFiscal@delaware.gov to enable anyone in that section to access, edit, and submit reports as needed. This will ensure that everyone in the finance section has access to information regardless of turnover. This will also share the workload and assist with timely reporting.
Reference Number: 2022-029 Prior Year Finding: 2021-027 Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal Award Identification (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient?s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement. (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: DEMA did not furnish all required information to its subrecipients at the time of issuance of the subawards. Further, DEMA was not able to provide support that it monitored the activities of its subrecipients to ensure that the subawards were used for authorized purposes, nor that it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: ? For five of five subrecipients, the following required information was not provided to the subrecipient at the time of award issuance: Federal Award Identification (FAIN), Federal award date, subaward budget period start and end date, Federal award project description as required by FFATA, name of Federal awarding agency, and Assistance Listing number and title. ? For five of five subrecipients, DEMA was unable to provide support that it monitored the activities of its subrecipients during the fiscal year to ensure that the subawards were used for authorized purposes. ? For three of five subrecipients, DEMA was unable to provide support that it ensured the subrecipients were audited as required by Subpart F. DEMA could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. Questioned costs: Undetermined. Cause: DEMA did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure to detect that subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis. Recommendation: DEMA should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Views of responsible officials: A contractor has been assigned to develop and implement internal controls to ensure all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Subaward letters were updated in September 2022 and a monitoring protocol implemented to begin monitoring all subrecipients to date to include an evaluation of independent audits that is documented as part of the monitoring visit.
Reference Number: 2022-028 Prior Year Finding: No Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 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 following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 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: DEMA could not produce supporting documentation that it reported required subaward information to FSRS for first-tier subawards of $30,000 or more. Context: DEMA was not able to provide supporting documentation for FSRS reporting for four of five subawards selected for testing. Total subawards tested were $9,839,395, and $229,664 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: DEMA?s policies and procedures were not sufficient to ensure that documentation was maintained to support required subaward information was reported to FSRS. Internal controls did not prevent or detect the errors. Effect: DEMA was unable to provide support that subawards were reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that DEMA enhance internal controls and procedures to ensure that FFATA reporting requirements are met and supporting documentation for submission is maintained. Views of responsible officials: DEMA finance section has created a group account for FFATA reporting using the group email DEMAFiscal@delaware.gov to enable anyone in that section to access, edit, and submit reports as needed. This will ensure that everyone in the finance section has access to information regardless of turnover. This will also share the workload and assist with timely reporting.
Reference Number: 2022-029 Prior Year Finding: 2021-027 Federal Agency: U.S. Department Homeland Security State Department Name: Department of Safety and Homeland Security, Federal Emergency Management Agency (FEMA) State Division Name: Delaware Emergency Management Agency (DEMA) Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters), COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 4526-DR-DE (2022), 4566-DR-DE (2022), 4627-DR-DE (2022) Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal Award Identification (i) Subrecipient name (which must match the name associated with its unique entity identifier); (ii) Subrecipient?s unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date (see the definition of Federal award date in ? 200.1 of this part) of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement. (d) 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: (1) Reviewing financial and performance reports required by the pass-through entity. (2) 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 other means. (3) Issuing a management decision for audit findings pertaining to the Federal award provided to the subrecipient from the pass-through entity as required by ? 200.521 Management decision. (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements 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 Audit requirements. Control: Per 2 CFR Section 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: DEMA did not furnish all required information to its subrecipients at the time of issuance of the subawards. Further, DEMA was not able to provide support that it monitored the activities of its subrecipients to ensure that the subawards were used for authorized purposes, nor that it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: ? For five of five subrecipients, the following required information was not provided to the subrecipient at the time of award issuance: Federal Award Identification (FAIN), Federal award date, subaward budget period start and end date, Federal award project description as required by FFATA, name of Federal awarding agency, and Assistance Listing number and title. ? For five of five subrecipients, DEMA was unable to provide support that it monitored the activities of its subrecipients during the fiscal year to ensure that the subawards were used for authorized purposes. ? For three of five subrecipients, DEMA was unable to provide support that it ensured the subrecipients were audited as required by Subpart F. DEMA could not produce evidence of verification that the subrecipient?s Federal awards expended during the fiscal year were below the threshold set forth in ? 200.501 Audit requirements. Questioned costs: Undetermined. Cause: DEMA did not establish effective internal controls and procedures over subrecipient monitoring. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Not conducting during the award monitoring may result in a failure to detect that subrecipients used subawards for unauthorized purposes, managed them in violation of the terms and conditions of the subawards, or that subaward performance goals were not achieved. Without ensuring subrecipients have obtained audits as required by Subpart F there is an increased risk that subrecipients could be inappropriately spending and/or inaccurately tracking and reporting federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, and corrected by agency personnel on a timely basis. Recommendation: DEMA should review and enhance internal controls and procedures to ensure that all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Views of responsible officials: A contractor has been assigned to develop and implement internal controls to ensure all required information is included in all subawards, that subrecipients are properly monitored, and that evaluation of independent audits is performed. Subaward letters were updated in September 2022 and a monitoring protocol implemented to begin monitoring all subrecipients to date to include an evaluation of independent audits that is documented as part of the monitoring visit.
Reference Number: 2022-033 Prior Year Finding: 2021-008 Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: COVID-19 ? HEERF Student Aid Portion, COVID-19 ? HEERF Institutional Portion Assistance Listing Number: 84.425E, F Award Number and Year: P425E204740 (5/24/2020 ? 6/30/2023) P425F204690 (8/18/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Special Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Recipients of Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) must complete the following special reporting components: 1) Public reporting on the (a)(1) Student Aid Portion; 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) Annual report. Annual Report: All HEERF recipients are required to submit an annual report for the calendar year ending December 31, 2021 no later than May 6, 2022. Quarterly Public Reporting-Student Aid Portion: Institutions must publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Control: Per 2 CFR section 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: Certain line items reported on the 2021 Annual Report and quarterly Student Aid Portion reports filed during FY 2022 by Delaware Technical Community College (the College) did not agree to supporting documentation. In addition, supporting documentation was unavailable for one quarterly Student Aid Portion report. Context: The 2021 Annual Report and two quarterly Student Aid Portion reports were selected for testing. We noted the following exceptions: ? The amount of Emergency Grants reported on the 2021 Annual Report did not agree with supporting documentation. The amount reported was $7,447,850 but supporting documentation was $5,923,898. ? For one of two quarterly Student Aid Portion reports, the College was unable to provide any supporting documentation. Neither documentation of the reporting narrative nor that the report had been posted on the College?s website were available for the report for the quarter ending 12/31/2021. ? For one of two quarterly Student Aid Portion reports, documentation for two key line items did not agree to the amounts reported. Documentation supporting the amount of Emergency Financial Aid Grants distributed to students (Item #3) and the number of students who have received an Emergency Financial aid Grant (Item #5) did not agree to the amounts reported for the quarter ending 9/30/2021. The Student Narrative Report showed $5,797,455 and 635 students vs. $1,139,130.00 and 1422 students on the student ledger. Questioned costs: Undetermined. Cause: The College?s procedures and controls were insufficient to ensure that it maintained documentation supporting the Annual Report and Quarterly Student Aid Portion reports, that it posted reports on its website timely, and that documentation was available for audit. Effect: The College was unable to provide documentation supporting reported information for special reports submitted during FY2022. Recommendation: The College should review and enhance internal controls and procedures to ensure that it maintains documentation supporting the Annual Report and the quarterly student aid portion reports and that this documentation is available for audit. Views of responsible officials: The College?s 2021 Year 2 Annual HEERF-Student Aid report table (Page 3 Table 8a Row 2) was corrected March 24, 2023 and in agreement with Delaware Tech?s student ledger detail (Banner student accounting system extract) when the federal reporting system was open for limited system data entry time. The Year 2 report was corrected and resubmitted as 2022 Year 3 Annual HEERF report filed. Filing is saved for audit review per federal system acceptance communicated. Additional Fiscal Accounting staff have trained to assist the Financial Aid Office with Quarterly HEERF Student Aid Reporting, report posting within 10 days post quarter end, and grant records management for immediate availability. The college continues to review and enhance our HEERF reporting internal controls with reports compiled and confirmed by a team ensuring multiple layers of reconciliation and final system report filing confirmation. Improved data summaries from system extracts with use of website tracking and snapshots at a single point-in-time are in place to support timely reporting and audit verification with the College?s quarterly and cumulative student award disbursement ledger detail. All website update requests will occur via use of the College?s Web Request ticketing system ending with a copy of the site update each quarter.
Reference Number: 2022-033 Prior Year Finding: 2021-008 Federal Agency: U.S. Department of Education State Department Name: Delaware Technical Community College Federal Program: COVID-19 ? HEERF Student Aid Portion, COVID-19 ? HEERF Institutional Portion Assistance Listing Number: 84.425E, F Award Number and Year: P425E204740 (5/24/2020 ? 6/30/2023) P425F204690 (8/18/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Special Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Recipients of Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) must complete the following special reporting components: 1) Public reporting on the (a)(1) Student Aid Portion; 2) Public reporting on the (a)(1) Institutional Portion (a)(2) and (a)(3) subprograms (Quarterly Reporting Form), as applicable; and 3) Annual report. Annual Report: All HEERF recipients are required to submit an annual report for the calendar year ending December 31, 2021 no later than May 6, 2022. Quarterly Public Reporting-Student Aid Portion: Institutions must publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Control: Per 2 CFR section 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: Certain line items reported on the 2021 Annual Report and quarterly Student Aid Portion reports filed during FY 2022 by Delaware Technical Community College (the College) did not agree to supporting documentation. In addition, supporting documentation was unavailable for one quarterly Student Aid Portion report. Context: The 2021 Annual Report and two quarterly Student Aid Portion reports were selected for testing. We noted the following exceptions: ? The amount of Emergency Grants reported on the 2021 Annual Report did not agree with supporting documentation. The amount reported was $7,447,850 but supporting documentation was $5,923,898. ? For one of two quarterly Student Aid Portion reports, the College was unable to provide any supporting documentation. Neither documentation of the reporting narrative nor that the report had been posted on the College?s website were available for the report for the quarter ending 12/31/2021. ? For one of two quarterly Student Aid Portion reports, documentation for two key line items did not agree to the amounts reported. Documentation supporting the amount of Emergency Financial Aid Grants distributed to students (Item #3) and the number of students who have received an Emergency Financial aid Grant (Item #5) did not agree to the amounts reported for the quarter ending 9/30/2021. The Student Narrative Report showed $5,797,455 and 635 students vs. $1,139,130.00 and 1422 students on the student ledger. Questioned costs: Undetermined. Cause: The College?s procedures and controls were insufficient to ensure that it maintained documentation supporting the Annual Report and Quarterly Student Aid Portion reports, that it posted reports on its website timely, and that documentation was available for audit. Effect: The College was unable to provide documentation supporting reported information for special reports submitted during FY2022. Recommendation: The College should review and enhance internal controls and procedures to ensure that it maintains documentation supporting the Annual Report and the quarterly student aid portion reports and that this documentation is available for audit. Views of responsible officials: The College?s 2021 Year 2 Annual HEERF-Student Aid report table (Page 3 Table 8a Row 2) was corrected March 24, 2023 and in agreement with Delaware Tech?s student ledger detail (Banner student accounting system extract) when the federal reporting system was open for limited system data entry time. The Year 2 report was corrected and resubmitted as 2022 Year 3 Annual HEERF report filed. Filing is saved for audit review per federal system acceptance communicated. Additional Fiscal Accounting staff have trained to assist the Financial Aid Office with Quarterly HEERF Student Aid Reporting, report posting within 10 days post quarter end, and grant records management for immediate availability. The college continues to review and enhance our HEERF reporting internal controls with reports compiled and confirmed by a team ensuring multiple layers of reconciliation and final system report filing confirmation. Improved data summaries from system extracts with use of website tracking and snapshots at a single point-in-time are in place to support timely reporting and audit verification with the College?s quarterly and cumulative student award disbursement ledger detail. All website update requests will occur via use of the College?s Web Request ticketing system ending with a copy of the site update each quarter.