Corrective Action Plans

Finding 16238 (2022-002)

Significant Deficiency 2022

DC

Equipment & Real Property Management Allowable Costs / Cost Principles Reporting § 200.313

2022-002 Equipment and Real Property Management Contact/s: Luther Lau, CFO (202) 462-5282 Mark Mackey, Controller (202) 298-5942 Completion Date: February 2023 Corrective Action: AUI maintains systems of internal controls of physical property to safeguard government assets from the risk of th...

2022-002 Equipment and Real Property Management Contact/s: Luther Lau, CFO (202) 462-5282 Mark Mackey, Controller (202) 298-5942 Completion Date: February 2023 Corrective Action: AUI maintains systems of internal controls of physical property to safeguard government assets from the risk of theft or loss. During the height of the COVID pandemic, the ALMA Observatory was necessarily staffed with a reduced number of personnel as a result of heightened restrictions on travel and cohabitation. The reduced staff ? in combination with the remote location of the Observatory ? resulted in the theft of a box of copper mesh at the Multicancha construction site. This copper mesh had a purchase price of approximately $3,200. Despite the theft being an isolated incident, AUI immediately reviewed its physical controls in place and took action to further improve monitoring and security at the site. Additional measures put in place include the following: ? During holidays and in-between shifts, valuable material was stored in a local locked warehouse. ? It was requested to ALMA to increase the frequency of guards patrolling. This is particularly important during the time the construction site is unoccupied for holidays or in-between shifts and nights. ? In Chile, the transportation of good requires an official paper called "Guia de despacho", which is a Chilean-IRS-certified document that demonstrates ownership of goods. Failing to show this paper to a local police officer may result in the detention of the driver under the alleged crime of theft. Since the incident, the Observatory is requesting this paper for all vehicles leaving the site carrying visible items. A visual inspection is performed to corroborate the paper and the cargo. ? A project to install CCTV cameras at the entrance and common areas is being developed. This is expected to mitigate risk of theft as well as having available records of events, if needed. The above internal controls over physical property, in combination with the controls already in place prior to the incident, have mitigated the risk of this type of occurrence from happening in the future.

View Audit 19698

Finding 16142 (2022-020)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting Allowable Costs / Cost Principles

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action comp...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Office has continued to strengthen internal controls for the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) reporting to ensure compliance with the federal requirements. As of May 2022, the Office: ? Transitioned the primary responsibility for centralized CSLFRF reporting to the Statewide Accounting Division. ? Hired a Budget and Grants Coordinator with experience in federal reporting to oversee the reporting process. The Office will continue to: ? Monitor updates to the U.S Treasury?s Project and Expenditure Report User Guide. ? Improve the quarterly reporting template and assist state agencies during the reporting process. ? Ensure reported amounts, including corrections or adjustments made during the reporting period, are properly tracked and documented for the subsequent reporting cycles. ? Perform reconciliations of reported expenditures to ensure agency expenditures are accurately reported, allowing for adjustments/ corrections required due to issues with the reporting system. ? Ensure reported expenditures are accurate and adequately supported by accounting records before the information is uploaded to the federal reporting system. ? Document correspondences with the U.S. Treasury when system errors are identified and resolutions recommended by the grantor, if received. Internal procedures have been developed to formally document the reporting process. Completion Date: May 2023 Agency Contact: Brian Tinney Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (564) 999-1781 brian.tinney@ofm.wa.gov

View Audit 23129

Finding 16141 (2022-019)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.1 § 200.410 § 200.516

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported, and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Fu...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported, and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $28,886,606 Status: Corrective action in progress Corrective Action: The Department implemented procedures to strengthen internal controls to ensure program expenditures are allowable, properly supported, and in compliance with the subrecipient fiscal monitoring requirements. The Homelessness Assistance Unit managing director completed the following corrective actions in July 2022: ? Updated unit reimbursement procedures to include a requirement for specific supporting documentation to accompany payment requests from all subrecipients. ? Provided training to staff on reviewing supporting documentation to ensure expenditures reconcile with reimbursement requests and to verify expenditures are within the period of performance. ? Reviewed 2 CFR 200.332 and updated procedures to include additional requirements for pass-through entities. ? Worked with the Department?s internal control officer for review and feedback of the updated procedures. The managing director will perform a review of the reimbursement process during the next fiscal year which begins July 1, 2023, to ensure procedures are followed. The Department increased the number of client files reviewed during program monitoring. The client file review included verifying household assistance expenses were allowable and incurred within the period of performance. Since the Department received the Coronavirus State and Local Fiscal Recovery Funds through legislative appropriation, resolution of the questioned costs with the grantor will be managed by the Office of Financial Management. Completion Date: Estimated September 2023 Agency Contact: Gena Allen Internal Control Officer PO Box 42525 Olympia, WA 98504 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16140 (2022-018)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Reporting § 200.334 § 200.335 § 200.336 § 200.337 § 200.410

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with requirements to ensure Coronavirus State and Local Fiscal Recovery Funds were used only for allowable activities. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $30...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with requirements to ensure Coronavirus State and Local Fiscal Recovery Funds were used only for allowable activities. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $300,000,000 Status: Corrective action not taken Corrective Action: The Office does not concur with the audit finding. The state of Washington created a separate fund to track the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) expenditures. The state, through legislation, approved the transfer from the CSLFRF account to various state transportation accounts. The Office reaffirms that all expenditures from the transportation accounts that received the CSLFRF funds were used to maintain government services. The State Administrative and Accounting Manual requires all state agencies to establish internal controls over payments for goods and services, including ensuring payments are lawful and for proper purposes, reviewing payments to ensure they are supported, as well as documenting the review of all payments. State agencies continued to follow their established internal controls to ensure expenditures from the transportation accounts were proper and allowable for both non-CSLFRF and CSLFRF funds. The Office will continue to: ? Work with the U.S. Treasury through upcoming desk audits to ensure no questioned costs are required to be repaid. ? Document all correspondence with the grantor during the audit resolution process. Completion Date: Not applicable Agency Contact: Brian Tinney Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (564) 999-1781 brian.tinney@ofm.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16139 (2022-017)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Special Tests & Provisions Allowable Costs / Cost Principles

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Emergency Rental Assistance program. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 Status: Corrective action in progress Corrective A...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Emergency Rental Assistance program. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department implemented procedures to strengthen internal controls to ensure compliance with reporting and special test compliance requirements. In December 2021, the Department contracted with a vendor skilled in performing data analytics. The vendor: ? Helped aggregate the data required in the monthly and quarterly reports submitted to Treasury. ? Worked with the Department to create a report form, with embedded data validation checks, to ensure data quality and accuracy. The Department updated its process to document review of the aggregated report form data prior to submission to Treasury. Additionally, bi-monthly meetings are held with the vendor staff to ensure understanding of any updated Emergency Rental Assistance reporting requirements and discuss potential impact to the data aggregation process. Funding for this program ends June 30, 2023. The Department will follow these updated procedures until final reporting is completed. Completion Date: Estimated July 2023 Agency Contact: Gena Allen Internal Control Officer PO Box 42525 Olympia, WA 98504 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 23129

Finding 16138 (2022-016)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.1 § 200.410 § 200.516

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 A...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure payments to subrecipients of the Emergency Rental Assistance program were allowable and properly supported. Questioned Costs: Assistance Listing # 21.023 COVID-19 Amount $255,642,551 Status: Corrective action in progress Corrective Action: The Department implemented procedures to strengthen internal controls to ensure Emergency Rental Assistance program expenditures are allowable, properly supported, and in compliance with the subrecipient fiscal monitoring requirements. The Homelessness Assistance Unit managing director completed the following corrective actions in September 2022: ? Updated unit reimbursement procedures to include a requirement for specific supporting documentation to accompany payment requests from all subrecipients. ? Provided training to staff on reviewing supporting documentation to ensure expenditures reconcile with reimbursement requests and to verify expenditures are within the period of performance. ? Reviewed 2 CFR 200.332 and updated procedures to include additional requirements for pass-through entities. ? Worked with the Department?s internal control officer for review and feedback of the updated procedures. The managing director will perform a review of the reimbursement process during the next fiscal year, which begins July 1, 2023, to ensure procedures are followed. The Department will consult with the federal grantor to discuss the audit results. Completion Date: Estimated September 2023 Agency Contact: Gena Allen Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16113 (2022-015)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: ...

Finding: The Office of Financial Management did not have adequate internal controls over and did not comply with reporting requirements for the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Office had controls in place for the Coronavirus Relief Fund (CRF) reporting requirements to ensure reported amounts, including corrections or adjustments made during the reporting period, were properly tracked and documented for subsequent reporting cycles. The Office performed continual monitoring of CRF expenditures to ensure the total grant expenditures reported were complete and accurate. The Office?s Statewide Accounting staff took over the responsibility for reviewing and certifying cycle 8 to 10 reports. Each report was reviewed prior to submission and documentation of the review was adequately maintained. The review ensured amounts submitted on the reports reconciled to supporting documentation provided by agencies at the time the reports were prepared. However, system issues in the federal reporting system created challenges in documenting changes to the templates as errors appeared and were subsequently corrected for the reporting cycle. For the final cycle 10 report, the Office ensured the cumulative amounts on the CRF report were supported by the underlying accounting records and performed a complete reconciliation of expenditures to the totals reported for each expenditure category. All revisions and resubmissions of the final report were completed in cycle 10. No additional revisions are required at this time. The final report was submitted in January 2023 and the grant is in its closeout phase. The Office considers this issued resolved. The conditions noted in this finding were previously reported in finding 2021-014. Completion Date: January 2023 Agency Contact: Brian Tinney Statewide Accounting Director PO Box 43127 Olympia, WA 98504-3127 (564) 999-1781 brian.tinney@ofm.wa.gov

View Audit 23129

Finding 16112 (2022-014)

None 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410 § 200.516

Finding: The Department of Social and Health Services improperly charged $390 to the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $390 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. Since the De...

Finding: The Department of Social and Health Services improperly charged $390 to the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $390 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. Since the Department received CRF funding through legislative appropriation, resolution of the questioned costs with the grantor will be managed by the Office of Financial Management. Completion Date: Estimated October 2023 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16111 (2022-013)

None 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410

Finding: The Department of Corrections improperly charged $37,392 to the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $37,392 Status: Corrective action complete Corrective Action: The Department concurs that the questioned costs identified by th...

Finding: The Department of Corrections improperly charged $37,392 to the Coronavirus Relief Fund. Questioned Costs: Assistance Listing # 21.019 COVID-19 Amount $37,392 Status: Corrective action complete Corrective Action: The Department concurs that the questioned costs identified by the auditors resulted from an employee?s overpayment inappropriately charged to the Coronavirus Relief Fund (CRF). The Department is committed to ensuring compliance with federal grant requirements. In response to this audit finding, the Department: ? Reviewed controls around payroll overpayments and developed a process to ensure they are not included in any future federal funding transfers. ? Reviewed and identified allowable costs that were not initially charged to the grant which would compensate for the questioned costs identified. The identified costs have been filed with the original transfer journal voucher and will be provided to the Office of Financial Management (OFM). Since the Department received CRF funding through legislative appropriation, resolution of the questioned costs with the grantor will be managed by the OFM. Completion Date: June 2023 Agency Contact: Anita Kendall Senior Director, Business Services PO Box 41106 Olympia, WA 98504-1106 (360) 480-7915 Anita.kendall@doc1.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16107 (2022-006)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listin...

Finding: The Employment Security Department did not have adequate internal controls over and did not comply with federal requirements to conduct case reviews for the Benefit Accuracy Measurement program of the Unemployment Insurance program in a timely manner. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: Historically, the Benefit Accuracy Measurement (BAM) unit has been challenged to maintain full levels of staffing. Staff turnover, long training requirements, and unique skill sets make these positions difficult to maintain. The BAM Unit currently has one vacancy and is expected to have more with upcoming retirements. The Department is currently in a hiring freeze for Unemployment Insurance administrative funding, furthering the challenge to fully staff the unit and meet program requirements. Once the hiring freeze is lifted, the unit will fill the vacant position. The Department anticipates the unit will meet federally mandated timelines for case reviews when the unit is fully staffed and trained. The Department continues to partner and frequently communicate with the U.S. Department of Labor (USDOL) Regional Offices to discuss staffing and training models. The Quality Assurance Manager and the Case Review Supervisor are committed to routinely monitor caseload, workload, and the overall assurance of meeting the BAM operations performance goals and measures as set forth by USDOL. The conditions noted in this finding were previously reported in findings 2021-005 and 2020-011. Completion Date: Estimated June 2024 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 23129

Finding 16106 (2022-005)

Significant Deficiency 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Equipment & Real Property Management

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Correctiv...

Finding: The Employment Security Department did not have adequate internal controls to ensure it submitted accurate monthly reports for the Unemployment Insurance program. Questioned Costs: Assistance Listing # 17.225 17.225 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department implemented a secondary review of the monthly ETA 9055 performance report to verify the data pulled from source documentation is accurately represented prior to submitting to the federal reporting system. Completion Date: May 2023 Agency Contact: Jay Summers External Audit Manager PO Box 9046 Olympia, WA 98507-9046 (360) 529-6718 Joshua.Summers@esd.wa.gov

View Audit 23129

Finding 16104 (2022-004)

Significant Deficiency 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Procurement, Suspension & Debarment Allowable Costs / Cost Principles

Finding: The Department of Health did not have adequate internal controls to ensure payments to providers were allowable, met cost principles, and were within the period of performance for the Special Supplemental Nutrition Program for Women, Infants, and Children. Questioned Costs: Assistance L...

Finding: The Department of Health did not have adequate internal controls to ensure payments to providers were allowable, met cost principles, and were within the period of performance for the Special Supplemental Nutrition Program for Women, Infants, and Children. Questioned Costs: Assistance Listing # 10.557 10.557 COVID-19 Amount $0 Status: Corrective action not taken Corrective Action: The Department disagrees with the auditor?s assessment of a significant deficiency in internal controls over the consolidated contract provider payment process for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). The Department has established processes in place to ensure payments are allowable, meet cost principles, and comply with period of performance requirements for the WIC program. These include: ? Perform annual review and approval of detailed subrecipient budgets. ? Compare invoice amounts to budgeted amounts for reasonableness before payment approval. ? Provide subrecipients regular technical assistance and training on applicable policies related to fiscal and programmatic processes. ? Conduct biennial program and fiscal monitoring visits to subrecipients as part of the Department?s monitoring procedures. In addition, the WIC program has monitoring controls in place and evidence of review at the program level. The quality assurance program staff maintain a detailed payment log that documents review and approval and details any amounts that need to be withheld until issues with invoice support are resolved. These reviews are to be completed within the 10-day period before payment is released. Similar conditions noted in this finding were previously reported in finding 2021-004. Completion Date: Not applicable Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 23129

Finding 16088 (2022-001)

Significant Deficiency 2022

Southern New Jersey Regional Early Intervention Collaborative, Inc.

NJ

Allowable Costs / Cost Principles Subrecipient Monitoring Significant Deficiency

Southern New Jersey Regional Early Intervention Collaborative, Inc. has drafted a new policy and procedure ?new employee payroll processing?. The new policy ensures that there is a uniform mechanism for documenting, recording, and verifying all necessary employee information that is required to acc...

Southern New Jersey Regional Early Intervention Collaborative, Inc. has drafted a new policy and procedure ?new employee payroll processing?. The new policy ensures that there is a uniform mechanism for documenting, recording, and verifying all necessary employee information that is required to accurately enroll employees into the Asure payroll system. Employee who was underpaid was owed an additional $6.92 for each pay, for a total of 6 pay periods. The retro check was issued with the 9/16/2022 payroll. Jennifer Buzby, Executive Director will be responsible for the implementation of the corrective action plan

View Audit 19589

Finding 16082 (2022-002)

Significant Deficiency 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Special Tests & Provisions § 200.1

Finding: The University of Washington did not have adequate internal controls to ensure key personnel commitments specified in grant proposals or awards were met. Questioned Costs: Assistance Listing # Various Amount $0 Status: Corrective action in progress Corrective Action: The Univer...

Finding: The University of Washington did not have adequate internal controls to ensure key personnel commitments specified in grant proposals or awards were met. Questioned Costs: Assistance Listing # Various Amount $0 Status: Corrective action in progress Corrective Action: The University has established internal controls to ensure compliance with key personnel program requirement through time and effort certifications, project reporting processes, and budget reconciliation requirements. Additionally, the University offers multiple training courses to research administrators and principal investigators (PI) on management of sponsored awards. The University agrees there are areas for improvement over staff and PI training, and resources available to monitor contribution and documentation of committed levels of time and effort. The University will implement the following improvements: ? Update training materials and provide additional training to PIs and key personnel on: o Documentation of time and effort. o Prior approval requirements for reductions in time and effort. ? Update guidance and instructions for time and effort certifications to ensure all personnel involvement in various grant programs is properly accounted for during the certification process. ? Develop exception reports to provide additional oversight to monitor deviations from committed time and effort for PIs and key personnel. Completion Date: Estimated February 2024 Agency Contact: Erick Winger Controller 4300 Roosevelt Way NE Seattle, WA 98195 (206) 543-5322 erickw@uw.edu

View Audit 23129

Finding 16064 (2022-068)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it met the earmarking requirement for the Block Grants for Prevention and Treatment of Substance Abuse. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it met the earmarking requirement for the Block Grants for Prevention and Treatment of Substance Abuse. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19 Amount $661 Status: Corrective action in progress Corrective Action: The Federal Financial Reporting unit will update procedures for preparing monthly earmarking tracking workbooks to ensure the Authority does not exceed the maximum allowable amount for administrative costs. The procedures will also include management review and approval of the earmarking tracking workbooks. The Authority processed subsequent adjustments reducing the administrative costs charged to the grant, which the auditors did not take into consideration. The Authority does not concur with the questioned costs identified in the audit and will confirm with the federal grantor that the questioned costs do not need to be repaid. The conditions noted in this finding were previously reported in finding 2021-056. Completion Date: Estimated September 2023 Agency Contact: William Sogge, CPA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16063 (2022-067)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410 § 200.502

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure payments to providers for the Block Grants for Prevention and Treatment of Substance Abuse program were allowable and met period of performance requirements. Questioned ...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure payments to providers for the Block Grants for Prevention and Treatment of Substance Abuse program were allowable and met period of performance requirements. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19 Amount $19,959,714 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the audit recommendations. The Authority concurs that expenditures for indirect charges were applied to the award, through the Authority?s cost allocation system, for activities that occurred after the period of performance. The Authority will develop written procedures to review allocation bases at the end of a grant period. The Authority does not concur with the audit exceptions related to two accruals recorded in the accounting system before the period of performance. As noted by the auditors, no payments were made on these accruals. The period of performance of the grant extends beyond the end of the state?s fiscal year. Invoices for the program continue to be received after fiscal year end and the cut-off date for reporting on the Schedule of Expenditures of Federal Awards. Staff review payments for grant allowability based on service month when invoices are received. The Authority does not concur with the questioned costs related to the year-end accruals and will verify with the grantor that questioned costs do not need to be repaid. The year-end accruals were solely recorded as estimates and were not used to make any program payments or draw funds from the grantor. While the year-end accruals may include some amounts beyond the state fiscal year, questioning the year-end accruals in their entirety is an overstatement of any potential error that was made. The Authority will update procedures for calculating year-end accruals to: ? Maintain all supporting documentation used to calculate the year-end accrual transactions. ? Maintain a workbook to calculate estimated expenditures to be accrued for the fiscal year. The conditions noted in this finding were previously reported in findings 2021-057 and 2020-059. Completion Date: Estimated September 2023 Agency Contact: William Sogge, CPA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16049 (2022-066)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking § 200.208 § 200.332 § 200.339 § 200.501 § 200.513

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Block Grants for Community Mental Health Services program and the Block Grants for Prevention and Treatment of Substance Abuse program received...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Block Grants for Community Mental Health Services program and the Block Grants for Prevention and Treatment of Substance Abuse program received required single audits, and that it appropriately followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.958 93.958 COVID-19 93.959 93.959 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Authority concurs with the finding. The Authority will: ? Follow established procedures related to the agency-wide monitoring of subrecipients? single audits. ? Issue management decision letters for findings subrecipients received related to programs that are funded by the Authority?s pass-through federal funding. ? Evaluate corrective actions to ensure subrecipients adequately address audit recommendations. Completion Date: Estimated July 2023 Agency Contact: William Sogge, CPA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

View Audit 23129

Finding 16046 (2022-063)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.1 § 200.410 § 200.52

Finding: The Health Care Authority did not have adequate controls over and did not comply with requirements to ensure payments to providers for the Block Grants for Community Mental Health Services were allowable and met period of performance requirements. Questioned Costs: Assistance Listing # ...

Finding: The Health Care Authority did not have adequate controls over and did not comply with requirements to ensure payments to providers for the Block Grants for Community Mental Health Services were allowable and met period of performance requirements. Questioned Costs: Assistance Listing # 93.958 93.958 COVID-19 Amount $8,668,982 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the audit recommendations. The Authority will: ? Maintain all supporting documentation used to calculate the year-end accrual transactions. ? Maintain a workbook to calculate estimated expenditures to be accrued for the fiscal year. The Authority will continue to review payments for allowability and ensure they occur within the grant period. The period of performance of the grant extends beyond the end of the state?s fiscal year. Invoices for the program continue to be received after fiscal year end and the cut-off date for reporting on the Schedule of Expenditures of Federal Awards. The Authority does not concur with the questioned costs and will verify with the grantor that questioned costs do not need to be repaid. Completion Date: Estimated September 2023 Agency Contact: William Sogge, CPA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16036 (2022-055)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Procurement, Suspension & Debarment § 200.1 § 200.410 § 200.516

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children?s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children?s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the finding. The Authority agrees that ProviderOne sends revalidation notifications one day after the due date rather than before the due date. A system revision to correct this issue is expected to be in place by the beginning of 2024. The Authority does not concur with the remainder of the audit finding as stated in the description of condition. The auditor did not provide sufficient information for the Authority to review the identified exceptions and associated questioned costs. Due to the lack of information provided, the Authority is unable to agree or disagree with the results of the audit. The Authority will work with the auditor to obtain sufficient supporting information to review the exceptions and questioned costs. Once this process is completed, the Authority will work with the Centers for Medicare & Medicaid Services on finding resolution. The conditions noted in this finding were previously reported in findings 2021-047, 2020-046, 2019-048, 2018-042, 2017-033, and 2016-035. The auditors determined 2016-035 as resolved. Completion Date: Estimated March 2024 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-5337 Kari.Summerour@hca.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16035 (2022-054)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Special Tests & Provisions Internal Control / Segregation of Duties

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action com...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action complete Corrective Action: The Authority implemented policies and procedures and established a process to: ? Collect audited financial reports annually from managed care organizations. ? Conduct audits of encounter and financial data no less than once every three years. Additionally, the Authority amended managed care contract language to include the following: ? Required managed care organizations to submit audited financial reports annually beginning in fiscal year 2023. ? Directed managed care organizations to follow the required timing and procedures for submitting audited financial reports. ? Clarified that failure to submit reports is sanctionable. The Authority also conducted an encounter validation audit and is conducting a financial report validation audit. These audits are completed in a frequency outlined in federal regulations. The conditions noted in this finding were previously reported in finding 2021-048. Completion Date: May 2022 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 23129

Finding 16034 (2022-053)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.410 § 200.516

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure clients were eligible for the Children?s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 Status: Corrective action not requi...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure clients were eligible for the Children?s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 Status: Corrective action not required Corrective Action: The Authority does not concur with the finding. The Authority pursued and was notified of approval for the 1115 disaster waiver from the Centers for Medicare & Medicaid Services (CMS). The waiver will approve Children?s Health Insurance Program (CHIP) funding for clients aged 19 and over during the public health emergency, retroactive to March 18, 2020. Once the official approval letter is received from CMS, the issue will be resolved, and the approval letter will be provided to CMS Audit Resolution. The Children?s Health Insurance Program Reauthorization Act (CHIPRA) postpartum period is state-funded and the Authority processes manual journal vouchers to move federal funding to state funding each quarter. For this audit, the auditors did not allow sufficient time for accounting staff to provide the journal vouchers for inclusion in the audit results. The Authority will work with CMS during the audit resolution process and provide the journal vouchers as needed to demonstrate that state funds were used for the postpartum expenditures. Effective July 1, 2022, the Authority added coding to ProviderOne which automates the accounting process for CHIPRA postpartum client funding. The conditions noted in this finding were previously reported in finding 2021-046. Completion Date: Not applicable Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 23129 Questioned Costs: $1

Finding 16014 (2022-001)

Significant Deficiency 2022

Youth Network Council

IL

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Name of Contact Person: Andrea Durbin, Executive Director Corrective Action: The Organization recognizes this finding and agrees with the recommendation. Going forward the Organization will implement a control to reconcile timecard allocations with general ledger allocations. Proposed Completion Dat...

Name of Contact Person: Andrea Durbin, Executive Director Corrective Action: The Organization recognizes this finding and agrees with the recommendation. Going forward the Organization will implement a control to reconcile timecard allocations with general ledger allocations. Proposed Completion Date: January 2023

View Audit 19582

Finding 16012 (2022-052)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Matching / Level of Effort / Earmarking Subrecipient Monitoring Allowable Costs / Cost Principles

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over level of effort requirements for the Adoption Assistance program. Questioned Costs: Assistance Listing # 93.659 93.659 COVID-19 Status: Corrective action complete Corrective Action: When...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over level of effort requirements for the Adoption Assistance program. Questioned Costs: Assistance Listing # 93.659 93.659 COVID-19 Status: Corrective action complete Corrective Action: When the auditors issued the prior year finding, the Department had taken the following actions: ? In February 2022, hired a new position to manage the adoption savings program. ? In May 2022: o Reviewed federal grantor?s reporting instructions and guidance with staff involved in the preparation and submission of the financial report. o Reviewed written procedures for tracking and monitoring adoption savings expenditures to ensure compliance with level of effort requirements. o Established monthly meetings between the Child Welfare Program and Cost Allocation and Grant Management Unit staff to review expenditures and level of effort requirements prior to report submission. These meetings help to improve processes for monitoring and verifying adoption savings expenditures. The auditors issued the fiscal year 2021 finding in May 2022, which was 11 months after fiscal year 2022 began. The delay did not allow corrective actions to be developed and implemented timely for fiscal year 2022 and resulted in a repeat finding. The conditions noted in this finding were previously reported in finding 2021-045. Completion Date: May 2022 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 23129

Finding 15995 (2022-051)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties Student Financial Aid

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with reporting requirements for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Cor...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with reporting requirements for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department acknowledges that errors were made in the quarterly reports submitted during the audit period. The errors were identified by the Department and corrected in October 2022. The Department understands accuracy in reporting is vital. To address the audit finding and recommendations, the Department took the following corrective actions: ? The lead worker established three meetings each quarter with the Cost Allocation and Grants Director for processing the quarterly reports: o A pre-meeting to discuss the reporting requirements, o A meeting during the reporting process to review the final report prior to submission, and o A post reporting meeting to discuss any concerns encountered during the reporting process. ? Implemented a data verification process by management prior to submission of the quarterly reports. The Department is committed to improving internal controls over grant management activities and will continue to properly follow the grantor?s published instructions when completing the quarterly reports. Completion Date: October 2022 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 23129

Finding 15994 (2022-050)

Material Weakness 2022

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure group care facility employees had cleared background checks before having unsupervised access to children. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Stat...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure group care facility employees had cleared background checks before having unsupervised access to children. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department partially concurs with the finding. The Department is committed to ensuring the health, safety, and well-being of all children in our care. As stated in the Effect of Condition on the audit finding, the auditors found all group care facility staff sampled during the audit had a cleared background check prior to working in the facility. While the Department agrees the use of definitions such as ?effective date? and ?start date? in FamLink could be misleading, the Department does not concur internal controls were not adequate to ensure group care facility employees had cleared background checks before having unsupervised access to children. The Department is confident that all staff who work with children and youth have cleared background checks. Effective April 1, 2023, the Department implemented a new process for processing background checks for group care facilities to strengthen internal controls, documentation, and clarification on the ?effective date.? The updated process is outlined below: ? A new form was created with clear instructions for the group care facilities to provide the applicant/employee information, including the background check confirmation code, directly to the Department?s Background Check Unit (BCU). ? The BCU works with the applicant/employee through the fingerprint background check process. ? The results are sent directly to the BCU at which time they complete a child abuse/neglect history check and, if needed, a suitability assessment. The BCU documents the results in FamLink with the date the background check is completed. ? The BCU emails the results to the group care facility and the Department?s Licensing Division (LD) group. If the applicant/employee is cleared and is not a renewal, LD staff adds the applicant/employee to the group care facility in FamLink with the clearance information attached. Completion Date: April 2023 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 23129

Corrective Action Plans

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