Corrective Action Plans

Finding 1228550 (2024-003)

Material Weakness 2024

CITY OF CLYDE

OH

Subrecipient Monitoring Allowable Costs / Cost Principles Cash Management § 200.208 § 200.302 § 200.328 § 200.329

The reporting for these has been updated and submitted. In 2024, I was not a part of the e-mail directing these to me - corrected and now processed timely.

View Audit 410173

Finding 1228460 (2024-010)

Material Weakness 2024

Sayre Health Center

PA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Material Weakness

Finding No. 2024-010: Lack of Management Oversight to Ensure Retention of Cash Disbursements and Expenses Approval The Health Center has moved to a cloud portal for submitting and processing invoices for approval and payment as well for maintaining vendor files. Under the cloud portal, any requests ...

Finding No. 2024-010: Lack of Management Oversight to Ensure Retention of Cash Disbursements and Expenses Approval The Health Center has moved to a cloud portal for submitting and processing invoices for approval and payment as well for maintaining vendor files. Under the cloud portal, any requests for payments cannot be processed without an invoice and or any other sufficient supporting documents. Approvals of invoices is now also reflected in the portal to indicate readiness for payment. The Health Center does not anticipate to charge expenses to the awards that are not in accordance with budgeted amounts as submitted to its funding sources.

View Audit 410112

Finding 1228459 (2024-009)

Material Weakness 2024

Sayre Health Center

PA

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Finding No. 2024-009: Lack of Management Oversight to Ensure Retention of Timesheets Grant timesheets are now being maintained with appropriate charging of time that is related programmatic or administrative functions. The timesheets are signed off by the employee and their related supervisor and ma...

Finding No. 2024-009: Lack of Management Oversight to Ensure Retention of Timesheets Grant timesheets are now being maintained with appropriate charging of time that is related programmatic or administrative functions. The timesheets are signed off by the employee and their related supervisor and maintained in the shared file for immediate availability and reference.

View Audit 410112

Finding 1228407 (2024-001)

Material Weakness 2024

Team Management 2000, Inc.

NJ

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Views of Responsible Officials and Planned Corrective Actions: We acknowledge the finding related to the delayed submission of the Single Audit report and appreciate the recommendation provided. Management is committed to ensuring timely completion and submission of future Single Audit reports in ac...

Views of Responsible Officials and Planned Corrective Actions: We acknowledge the finding related to the delayed submission of the Single Audit report and appreciate the recommendation provided. Management is committed to ensuring timely completion and submission of future Single Audit reports in accordance with the required deadlines. To address this, we will implement the following corrective actions: 1. Enhanced Internal Timeline: We will establish an internal deadline for audit-related documentation and review, allowing sufficient time for finalization before the official reporting deadline. 2. Increased Coordination: Management will work closely with auditors and key stakeholders throughout the audit process to ensure timely responses and resolution of outstanding items. 3. Resource Allocation: Additional internal resources will be dedicated to supporting the audit process, ensuring that necessary documentation and financial records are prepared in advance. 4. Regular Progress Monitoring: We will implement periodic check-ins during the audit period to track progress and address any potential delays proactively. We are confident that these measures will improve our ability to meet future reporting deadlines and enhance overall efficiency in the audit process.

View Audit 410086

Finding 1228087 (2024-005)

Material Weakness 2024

East Tallahatchie School District

MS

Procurement, Suspension & Debarment Allowable Costs / Cost Principles School Nutrition Programs

Accounts payable testing and internal controls A. Name of contact person responsible for corrective action: Name: Raymond Russell Title: Superintendent B. Corrective action planned: The District will implement policies and procedures to establish an internal control system that will require accounta...

Accounts payable testing and internal controls A. Name of contact person responsible for corrective action: Name: Raymond Russell Title: Superintendent B. Corrective action planned: The District will implement policies and procedures to establish an internal control system that will require accountability with regard to accounts payable and purchasing. That will also ensure proper safeguarding of assets and accurate accounting records. C. Anticipated completion date: Immediately

View Audit 409915

Finding 1228067 (2024-003)

Material Weakness 2024

Kids Cove Community Outreach

TX

Allowable Costs / Cost Principles Material Weakness Reporting

Corrective Action Planned: Kids Cove Community Outreach acknowledges the finding related to the recording of personnel costs at the net amount paid to employees rather than recording the full gross payroll expense, including applicable employee withholdings and employer payroll taxes and matching co...

Corrective Action Planned: Kids Cove Community Outreach acknowledges the finding related to the recording of personnel costs at the net amount paid to employees rather than recording the full gross payroll expense, including applicable employee withholdings and employer payroll taxes and matching contributions. To correct this finding, Kids Cove Community Outreach will implement a mandatory supervisory review process for all payroll-related charges to the CACFP program. All personnel costs charged to the CACFP program will be recorded using the employee's gross wages as the basis for the payroll expense. Applicable employer payroll taxes and other allowable employer-paid payroll costs will also be properly recorded when applicable and supported by payroll documentation. The organization will maintain payroll registers, employee timesheets, payroll reports, payroll tax records, canceled checks or electronic payment records, and other supporting documentation necessary to substantiate personnel costs charged to CACFP. Effective immediately, all payroll charges to the CACFP program must receive supervisory review and approval before the payroll expenditure is finalized and posted to the CACFP grant records. The Administrator and the Director will review the payroll documentation to verify that: 1. The employee is authorized to perform work charged to the CACFP program. 2. The hours worked or salary charged are supported by an approved timesheet or payroll record. 3. Gross wages, rather than net wages, are recorded as personnel expense. 4. Applicable employer payroll taxes and matching contributions are properly recorded. 5. Payroll costs are charged to the appropriate federal program and accounting period. 6. The amount recorded on the CACFP grant expenditure listing agrees with the payroll register and supporting documentation. 7. Any corrections or adjustments are properly documented and approved. The supervisory review will be documented by the supervisor's signature or initials and date on a payroll review checklist or other designated payroll approval document. No payroll expenditure will be posted to the CACFP grant program records until the mandatory supervisory review has been completed. On a monthly basis, the designated bookkeeping personnel will reconcile personnel costs charged to CACFP to the payroll register, general ledger, and supporting payroll records. The Administrator and Director will review the reconciliation to ensure that gross wages, employee withholdings, employer payroll taxes, and applicable matching contributions have been properly accounted for and that the amounts charged to CACFP are accurate and properly supported. Employees responsible for payroll processing, bookkeeping, and grant financial records will receive training regarding the proper recording of payroll costs under federal award requirements, including the difference between gross wages, employee withholdings, and employer payroll taxes and matching contributions. The Director will be responsible for ensuring that the mandatory supervisory review and monthly payroll reconciliation are completed. The designated payroll/bookkeeping personnel will be responsible for preparing the payroll records, maintaining supporting documentation, and recording payroll expenditures in the appropriate grant program records. The corrective action will be implemented immediately and will apply to all payroll charged to the CACFP program beginning with the next payroll cycle and continuing for all subsequent payroll periods. Management will periodically review CACFP payroll records, payroll registers, grant expenditure listings, general ledger activity, and supporting documentation to ensure that personnel costs are recorded accurately and completely. Any errors identified through the supervisory review or monthly reconciliation will be corrected promptly and documented. Kids Cove Community Outreach will retain documentation demonstrating completion of the mandatory supervisory review and reconciliation as part of its financial and grant records and will make such documentation available for audit and compliance monitoring.

View Audit 409908

Finding 1228066 (2024-002)

Material Weakness 2024

Kids Cove Community Outreach

TX

Allowable Costs / Cost Principles Material Weakness Reporting

Corrective Action Planned: Kids Cove Community Outreach acknowledges the finding related to the recording of personnel costs at the net amount paid to employees rather than recording the full gross payroll expense, including employee withholdings and applicable employer payroll taxes and matching co...

Corrective Action Planned: Kids Cove Community Outreach acknowledges the finding related to the recording of personnel costs at the net amount paid to employees rather than recording the full gross payroll expense, including employee withholdings and applicable employer payroll taxes and matching contributions. To correct this finding, Kids Cove Community Outreach will implement a mandatory supervisory review process for all payroll-related charges to the SFSP grant program. All payroll charged to the SFSP program will be recorded based on the employee's gross wages, rather than the employee's net paycheck amount. Applicable employer payroll taxes and other allowable employer-paid payroll costs will also be included in the total personnel expense charged to the program when applicable and properly supported. The organization will maintain payroll registers, employee time records/timesheets, payroll reports, payroll tax records, canceled checks or electronic payment documentation, and other supporting documentation necessary to substantiate personnel costs charged to the federal program. Effective immediately, all payroll charges to the SFSP program are subject to mandatory supervisory review before the payroll expenditure is finalized and posted to the grant program records. The Administrative Assistant and Director will review and approve the payroll documentation to verify that: 1. The employee was authorized to work for the program. 2. The hours or salary charged are supported by an approved timesheet or payroll record. 3. Gross wages, rather than net wages, are used to determine the personnel expense. 4. Applicable employer payroll taxes and other allowable employer-paid costs are properly included. 5. Payroll costs are charged to the appropriate program and accounting period. 6. The amounts recorded in the grant expenditure ledger agree with the payroll register and supporting payroll documentation. 7. Any corrections or adjustments are documented and approved by the supervisor. The supervisory review will be documented by the supervisor's initials/signature and date on the payroll review checklist. No payroll expenditure will be posted to the SFSP grant records without completion of the required supervisory review. The Director will perform a monthly reconciliation of payroll charged to the SFSP program to the payroll register and general ledger to ensure that personnel costs are recorded completely and accurately. The Director and Accounting Personnel responsible for payroll processing, grant accounting, and financial recordkeeping will receive training on the proper recording of payroll costs under applicable federal requirements, including the distinction between gross wages, employee withholdings, and employer payroll taxes and matching contributions. The Director will be responsible for ensuring that the mandatory supervisory review is completed. The payroll/bookkeeping personnel will prepare and maintain the payroll documentation and grant expenditure records on a quarterly basis. The mandatory supervisory review process will be implemented immediately and will apply to all payroll charged to the SFSP and CACFP program beginning with the next payroll cycle and continuing for all subsequent payroll periods. The Administrator and Secretary will periodically review payroll records, grant expenditure listings, payroll registers, and supporting documentation to ensure that the corrective action remains effective. Any errors identified during supervisory review or subsequent monitoring will be corrected promptly and documented. Management will retain evidence of the required supervisory reviews and reconciliations for audit and compliance purposes.

View Audit 409908

Finding 1227878 (2024-006)

Material Weakness 2024

International Institute of Wisconsin, Inc.

WI

Allowable Costs / Cost Principles § 200.431

IIW acknowledges the finding regarding the fringe benefit allocation methodology used during FY2024. The 32% rate represented a fringe benefit package that included employer payroll taxes and other applicable employee benefit costs. Based on actual costs recorded in the general ledger, the appropria...

IIW acknowledges the finding regarding the fringe benefit allocation methodology used during FY2024. The 32% rate represented a fringe benefit package that included employer payroll taxes and other applicable employee benefit costs. Based on actual costs recorded in the general ledger, the appropriate fringe benefit percentage for FY2024 was approximately 18%. IIW recognizes the importance of ensuring that fringe benefit costs charged to federal awards are based on a reasonable, consistently applied, and adequately supported methodology that appropriately reflects allowable fringe benefit costs. Management has strengthened its procedures for reviewing the components and calculation of fringe benefit costs and will continue to evaluate the methodology used to allocate these costs to grants and programs to ensure that the amounts charged are appropriately supported and consistent with applicable federal award and grant requirements. Corrective Actions Implemented and Ongoing • Strengthen procedures for identifying and documenting the allowable costs included in the fringe benefit calculation. • Ensure fringe benefit calculations include applicable employer payroll taxes and other allowable components of the fringe benefit package. • Review the fringe benefit methodology and supporting calculations against actual costs to determine whether the methodology reasonably reflects costs incurred. • Maintain review procedures and checks and balances over the calculation and allocation of fringe benefit costs to grants and programs. • Adjust the methodology or amounts charged when review of actual costs indicates that modification is necessary. • Utilize outside accounting expertise to provide additional review of fringe benefit calculations, methodology, and supporting documentation. • Continue working with applicable granting agencies, as appropriate, to ensure fringe benefit costs are appropriately supported and comply with applicable federal award requirements. Contact Persons Responsible for Corrective Action Paul F. Trebian, President & CEO Estela Vazquez-Ornelas, Vice President Anticipated Completion Date Corrective actions have been implemented and remain ongoing. IIW will continue to monitor and evaluate its fringe benefit methodology and supporting calculations to ensure that costs charged to federal awards are reasonable, appropriately supported, and compliant with applicable grant requirements.

View Audit 409801

Finding 1227877 (2024-005)

Material Weakness 2024

International Institute of Wisconsin, Inc.

WI

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Subrecipient Monitoring § 200.430

IIW acknowledges the finding regarding the allocation of payroll expenses to federal awards during the period July 2023 through October 2023. FY2024 was a significant transition period for IIW. New payroll and financial systems were implemented during the transition period from June 2023 through Jan...

IIW acknowledges the finding regarding the allocation of payroll expenses to federal awards during the period July 2023 through October 2023. FY2024 was a significant transition period for IIW. New payroll and financial systems were implemented during the transition period from June 2023 through January 2024, and management implemented significant corrective actions related to payroll allocation beginning in November 2023. These corrective actions included transitioning away from the prior budget-based payroll allocation methodology, strengthening timekeeping and payroll processes, implementing procedures designed to document actual employee activities, and enhancing supervisory review of payroll allocations. Although aspects of the prior-year condition affected the July through October 2023 period of FY2024, significant corrective measures were implemented during FY2024 beginning in November 2023. IIW continued strengthening these processes throughout FY2024. Corrective Actions Implemented and Ongoing • Implement and maintain written payroll allocation policies and procedures. • Utilize systematic timekeeping practices designed to document actual employee activities. • Allocate payroll costs based on actual work performed and appropriate supporting documentation. • Maintain supervisory review and approval procedures over employee time reporting and payroll allocations. • Maintain appropriate levels of management review and oversight to provide checks and balances over payroll reporting and allocation. • Periodically review payroll allocations for consistency with actual employee activity and make adjustments when necessary. Contact Persons Responsible for Corrective Action Paul F. Trebian, President & CEO Estela Vazquez-Ornelas, Vice President Anticipated Completion Date Significant corrective actions were implemented beginning in November 2023 and continue to be monitored and enhanced as necessary to ensure compliance with federal award requirements.

View Audit 409801

Finding 1227876 (2024-004)

Material Weakness 2024

International Institute of Wisconsin, Inc.

WI

Allowable Costs / Cost Principles Subrecipient Monitoring Reporting

IIW acknowledges that enhancements were necessary to strengthen and document internal controls over compliance with applicable federal award requirements. During FY2024, IIW continued working with granting agencies through technical assistance, monitoring, and programmatic training to improve compli...

IIW acknowledges that enhancements were necessary to strengthen and document internal controls over compliance with applicable federal award requirements. During FY2024, IIW continued working with granting agencies through technical assistance, monitoring, and programmatic training to improve compliance practices. These improvements continued throughout FY2024. Management recognizes that responsibility for the design, implementation, and maintenance of effective internal controls over federal award compliance remains with IIW. Corrective Actions Implemented and Ongoing • Strengthen documented internal controls over applicable federal compliance requirements. • Maintain documented supervisory reviews over activities allowed or unallowed, allowable costs, cash management, eligibility, period of performance, and reporting. • Periodically evaluate the effectiveness of compliance controls and address identified deficiencies. • Continue utilizing grantor technical assistance and monitoring, as appropriate, while maintaining management responsibility for IIW’s internal control environment. • Continue training appropriate financial and program personnel regarding federal award requirements and documentation expectations. Contact Persons Responsible for Corrective Action Paul F. Trebian, President & CEO Estela Vazquez-Ornelas, Vice President Anticipated Completion Date Improvements were initiated during FY2024 and continue with ongoing monitoring thereafter.

View Audit 409801

Finding 1227789 (2024-001)

Material Weakness 2024

Housing Authority of the County of Mifflin

PA

HUD Housing Programs Allowable Costs / Cost Principles

MCHA has hired an independent HR consultant to review all personnel files and procedures and provide guidelines to ensure that supporting documentation exists for all payroll expenses. Additionally, new systems have been put into place with three layers of checks and balances to ensure that timeshee...

MCHA has hired an independent HR consultant to review all personnel files and procedures and provide guidelines to ensure that supporting documentation exists for all payroll expenses. Additionally, new systems have been put into place with three layers of checks and balances to ensure that timesheets match expenses. Policy has been set by board to ensure any bonuses or additional payments are board approved and no additional payments will be issued without board signature. MCHA has established allocation percentages for payroll and indirect costs in relation to units and/or time spent. All costs will be allocated on this basis. Allocations will be reviewed and updated annually and/or as changes are necessitated.

View Audit 409755

Finding 1227371 (2024-004)

Material Weakness 2024

Center for Family Health and Education

CA

Allowable Costs / Cost Principles

Management's Response: Management concurs with this finding. We acknowledge that the documentation supporting payroll backup and allocations to federal awards require strengthening to meet the strict standards of 2 CFR 200 (Uniform Guidance) and are committed to strengthening the systems and interna...

Management's Response: Management concurs with this finding. We acknowledge that the documentation supporting payroll backup and allocations to federal awards require strengthening to meet the strict standards of 2 CFR 200 (Uniform Guidance) and are committed to strengthening the systems and internal control around payroll process and tracking of allowable costs charges to federal grants. Responsible Party: Consultant/CEO/Legal Counsel/CFO. Completion Date: Within 60 to 90 days of the final audit report.

View Audit 409458

Finding 1226948 (2024-003)

Material Weakness 2024

Operation Hope of Fairfield, Inc.

CT

Allowable Costs / Cost Principles § 200.430

Management agrees with the finding that payroll costs charged to HUD-funded programs were based on estimated allocations and did not consistently reflect actual time and effort in accordance with 2 CFR §200.430 (Compensation—Personal Services) and applicable HUD program requirements. Management ackn...

Management agrees with the finding that payroll costs charged to HUD-funded programs were based on estimated allocations and did not consistently reflect actual time and effort in accordance with 2 CFR §200.430 (Compensation—Personal Services) and applicable HUD program requirements. Management acknowledges the requirement that personnel costs charged to HUD awards (e.g., CDBG, HOME, CoC) must be supported by records that accurately reflect work performed on eligible program activities. Corrective Actions Implemented: The Organization has strengthened internal controls over payroll allocation for HUD-funded programs by implementing a formal monthly review and reconciliation process based on after-the-fact determinations of actual activity. Under this enhanced process: • Payroll costs charged to HUD awards are reviewed monthly and supported by documentation that reflects actual time and effort by eligible activity and funding source. • Payroll distribution reports are evaluated for accuracy, allowability, and alignment with HUD-eligible program activities. • Allocated payroll costs are compared to actual program delivery (e.g., beneficiary services, project activities, administrative vs. program caps, where applicable). • Timely cost adjustments are recorded, as necessary, to ensure payroll charges are properly aligned with work performed and eligible cost objectives. • All adjustments are documented, reviewed, and approved by appropriate supervisory and finance personnel. Expected Outcome: Management believes these corrective actions will ensure that payroll costs charged to HUD-funded programs are accurate, allowable, properly documented, and aligned with eligible program activities, and fully compliant with Uniform Guidance and HUD requirements. These enhancements will strengthen internal controls, improve reporting reliability (including IDIS/financial reporting where applicable), and reduce the risk of noncompliance in future monitoring or audit reviews.

View Audit 409144

Finding 1226944 (2024-002)

Material Weakness 2024

Operation Hope of Fairfield, Inc.

CT

Allowable Costs / Cost Principles § 200.403 § 200.405

Management has updated its policies and procedures to require a formal annual review and update of the cost allocation plan. This review will occur in conjunction with the finalization and Board approval of the organization’s annual operating budget, ensuring that the CAP aligns with the most curren...

Management has updated its policies and procedures to require a formal annual review and update of the cost allocation plan. This review will occur in conjunction with the finalization and Board approval of the organization’s annual operating budget, ensuring that the CAP aligns with the most current program structure, funding sources, and cost allocation methodologies. As part of this process, management will: • Evaluate the reasonableness and appropriateness of allocation methodologies; • Ensure consistency in application across all programs and funding streams; and • Document and approve any necessary revisions to the cost allocation plan prior to implementation. Management believes this corrective action will ensure that the CAP remains current, appropriately reflects organizational activities, and complies with applicable Federal requirements. Ongoing adherence to this process will strengthen internal controls over cost allocation and financial reporting.

View Audit 409144

Finding 1226924 (2024-053)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Questioned Costs Subrecipient Monitoring § 200.303

Finding Number 2024-053 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and co...

Finding Number 2024-053 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. OMES acknowledges that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2024. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI in these findings. Beginning with FY2025, OMES has taken the following measures: • OMES disagrees that they had sufficient and timely notice to make full corrective actions prior to this FY2024 audit for the following reasons: the FY2021 State auditor & Inspector (SAI) audit was released four days prior to the beginning of FY2024, the FY2022 SAI audit was released near the end of FY2025, and the FY2023 audit was released in FY2026; therefore, OMES could not take corrective action prior to the FY2024 audit began. At the beginning of FY2025, OMES began corrective measures as noted in SAI’s Condition and Context in this finding. • OMES acknowledges OMES subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI as noted in SAI’s Condition and Context in this finding. Beginning with FY2025, OMES has taken the following measures:  Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience.  OMES ensured that the subrecipient agreement included all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) executed an updated Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies.  OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed.  OMES-GMO has in place a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements.  Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMESGMO conducted bi-weekly monitoring meetings with CFO and reviewed documentation provided by CFO to ensure all ERA projects were eligible under the ERA guidelines and that CFO exercised the proper oversight over their subrecipients and spending. Anticipated Completion Date Completed Responsible Contact Person Brandy Manek

View Audit 409119

Finding 1226923 (2024-038)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303 § 200.334 § 200.337 § 200.450

Finding Number 2024-038 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and co...

Finding Number 2024-038 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. OMES acknowledges that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2024. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI in these findings. Beginning with FY2025, OMES has taken the following measures: • OMES disagrees that they had sufficient and timely notice to make full corrective actions prior to this FY2024 audit for the following reasons: the FY2021 State auditor & Inspector (SAI) audit was released four days prior to the beginning of FY2024, the FY2022 SAI audit was released near the end of FY2025, and the FY2023 audit was released in FY2026; therefore, OMES could not take corrective action prior to the FY2024 audit began. At the beginning of FY2025, OMES began corrective measures as noted in SAI’s Condition and Context in this finding. • OMES acknowledges OMES subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI as noted in SAI’s Condition and Context in this finding. Beginning with FY2025, OMES has taken the following measures:  Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience.  OMES ensured that the subrecipient agreement included all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) executed an updated Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies.  OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed.  OMES-GMO has in place a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements.  Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMESGMO conducted bi-weekly monitoring meetings with CFO and reviewed documentation provided by CFO to ensure all ERA projects were eligible under the ERA guidelines and that CFO exercised the proper oversight over their subrecipients and spending. Anticipated Completion Date Completed Responsible Contact Person Brandy Manek

View Audit 409119

Finding 1226922 (2024-024)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Subrecipient Monitoring § 200.303 § 200.334 § 200.337 § 200.403 § 200.430

Finding Number 2024-024 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and co...

Finding Number 2024-024 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) acknowledges subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. OMES acknowledges that OMES did not implement the proper internal controls and oversight of the ERA Program during FY2024. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI in these findings. Beginning with FY2025, OMES has taken the following measures: • OMES disagrees that they had sufficient and timely notice to make full corrective actions prior to this FY2024 audit for the following reasons: the FY2021 State auditor & Inspector (SAI) audit was released four days prior to the beginning of FY2024, the FY2022 SAI audit was released near the end of FY2025, and the FY2023 audit was released in FY2026; therefore, OMES could not take corrective action prior to the FY2024 audit began. At the beginning of FY2025, OMES began corrective measures as noted in SAI’s Condition and Context in this finding. • OMES acknowledges OMES subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI as noted in SAI’s Condition and Context in this finding. Beginning with FY2025, OMES has taken the following measures:  Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience.  OMES ensured that the subrecipient agreement included all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) executed an updated Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies.  OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed.  OMES-GMO has in place a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements.  Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMESGMO conducted bi-weekly monitoring meetings with CFO and reviewed documentation provided by CFO to ensure all ERA projects were eligible under the ERA guidelines and that CFO exercised the proper oversight over their subrecipients and spending. Anticipated Completion Date Completed Responsible Contact Person Brandy Manek

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Finding 1226920 (2024-014)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting § 200.303 § 200.331 § 200.332 § 200.334 § 200.337

Finding Number 2024-014 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) partially concurs with these findings. • OMES disagrees that they had s...

Finding Number 2024-014 Subject Heading (Financial) or AL no. and program name (Federal) EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA) AL #21.019 Planned Corrective Action Oklahoma Office of Management and Enterprise Services (OMES) partially concurs with these findings. • OMES disagrees that they had sufficient and timely notice to make full corrective actions prior to this FY2024 audit for the following reasons: the FY2021 State auditor & Inspector (SAI) audit was released four days prior to the beginning of FY2024, the FY2022 SAI audit was released near the end of FY2025, and the FY2023 audit was released in FY2026; therefore, OMES could not take corrective action prior to the FY2024 audit began. At the beginning of FY2025, OMES began corrective measures as noted in SAI’s Condition and Context in this finding. • OMES acknowledges OMES subrecipient monitoring process lacked the strength and consistency to ensure subrecipients established and maintained effective internal control. However, OMES has taken steps to correct these findings and follow the recommendations set forth by SAI as noted in SAI’s Condition and Context in this finding. Beginning with FY2025, OMES has taken the following measures:  Oversight and management of the ERA program has been transferred to the OMES Grant Management Office (OMES-GMO) which has staff with several years of grant experience. OMES-GMO has recently hired additional staff, and the two staff members dedicated to the management of the ERA program have 20+ years of combined federal grant specific experience.  OMES ensured that the subrecipient agreement included all the required terms under the ERA Program and that the agreement does not expire, OMES-GMO and the Communities of Foundation of Oklahoma (CFO) executed an updated Subrecipient Grant Agreement Amendment that details the responsibilities of OMES to monitor CFO and the duties and processes that CFO must follow in regard to ERA Program, including detailed cash management policies.  OMES-GMO required the return of the remaining ERA2 Program funds from CFO to ensure proper oversight and review of ERA expenditures is performed.  OMES-GMO has in place a multi-level system of internal controls for grant management and oversight that includes routine monitoring, desk review, and site visits for all projects and associated project/administrative expenditures to ensure allowability, accuracy, and assist in the detection of fraud. For example, OMES-GMO’s process for disbursing funds to a subrecipient requires a written request from the subrecipient with supporting documentation, then OMES-GMO assigns a staff lead and secondary grant analyst to perform a primary and secondary review for compliance and to require additional supporting documentation if needed to approve the request. Once those reviews are completed and approved by the OMES-GMO staff, the Director of the OMES-GMO must approve the request before it is sent to the OMES Finance Division, who will then verify the calculated amount(s) before completing the disbursement to the subrecipient. These internal controls and policies have been implemented for the management and oversight of the ERA Program and provide a multilayer review that will prevent fraud and risk factors applicable to the ERA program. Additionally, the OMES-GMO staff assigned to the ERA program have the training and knowledge to ensure compliance with the Federal grant requirements.  Depending on the level of risk, OMES-GMO conducts monthly, bi-weekly or weekly meetings with each subrecipient to monitor the progress of projects and address any issues or changes that might impact the project. For the ERA Program, OMESGMO conducted bi-weekly monitoring meetings with CFO and reviewed documentation provided by CFO to ensure all ERA projects were eligible under the ERA guidelines and that CFO exercised the proper oversight over their subrecipients and spending. Anticipated Completion Date Completed Responsible Contact Person Brandy Manek

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Finding 1226919 (2024-098)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles § 200.403 § 200.431

Finding Number 2024-098 Subject Heading (Financial) or AL no. and program name (Federal) 97.036 – Disaster Grants – Public Assistance Planned Corrective Action Management has discussed this issue with ABS, and ABS is aware of the agency's expectation that all required Pathfinder correction entries, ...

Finding Number 2024-098 Subject Heading (Financial) or AL no. and program name (Federal) 97.036 – Disaster Grants – Public Assistance Planned Corrective Action Management has discussed this issue with ABS, and ABS is aware of the agency's expectation that all required Pathfinder correction entries, including both regular and supplemental payroll transactions, be processed as part of the correction process. Going forward, the agency will coordinate with ABS and perform periodic verification that both regular and supplemental payroll corrections have been included. The agency will also work with ABS to address any identified omissions to help ensure that only allowable employer retirement contributions are charged to federal awards. Anticipated Completion Date 1/31/2027 Responsible Contact Person Brianna Thomas

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Finding 1226907 (2024-005)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Eligibility HUD Housing Programs

Finding Number 2024-005 Subject Heading (Financial) or AL no. and program name (Federal) 93.767 Children’s Health Insurance Program 93.778 Medicaid Cluster Planned Corrective Action OKDHS Response: We are using Azure DevOps to track the work related to the findings for the mentioned issues. The work...

Finding Number 2024-005 Subject Heading (Financial) or AL no. and program name (Federal) 93.767 Children’s Health Insurance Program 93.778 Medicaid Cluster Planned Corrective Action OKDHS Response: We are using Azure DevOps to track the work related to the findings for the mentioned issues. The work is being completed under User Story 455612 - PS2 | AFS | Notices | Update Medical Notices Language for CMS Audit Finding Corrective Action (2024-005). To ensure all required notice language updates are implemented accurately and consistently, OKDHS is currently utilizing an Azure DevOps tracking tool to conduct a thorough discovery and analysis of all aspects of this issue. Our primary focus is identifying every notice and process that may be impacted by this change. OHCA Response: Additional post-CAP audits will be conducted by Member Audits upon notification from OHS all corrective measures have been implemented, should occur after August 1, 2026. Anticipated Completion Date August 1, 2026 Responsible Contact Person Chris Dees, Eligibility and Coverage Services Technical Director; April Anonsen, Deputy State Medicaid Director; Aubrey McDonald, OKDHS Medicaid Program Administrator; Tana Parrott, OHCA Director of Member Audits; Kristin Edwards OHCA Senior Director of Program & Accountability

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Finding 1226879 (2024-010)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles

Finding Number 2024-010 Subject Heading (Financial) or AL no. and program name (Federal) 93.767 Children’s Health Insurance Program Planned Corrective Action OHCA remains committed to using established control processes and procedures to ensure medical claims are managed accurately and efficiently. ...

Finding Number 2024-010 Subject Heading (Financial) or AL no. and program name (Federal) 93.767 Children’s Health Insurance Program Planned Corrective Action OHCA remains committed to using established control processes and procedures to ensure medical claims are managed accurately and efficiently. Processes such as Provider Training, annual Payment Accuracy Measurement (PAM) project, medical reviews, data analytic processes, external CMS-UPIC CE and FFS audits, prior authorizations, system edits, continuously updating OHCA’s system with National Correct Coding Initiative (NCCI), and on a 3-year cycle the Federal Payment Error Rate Measurement (PERM) project. Anticipate the question costs of $1,996 will be reported in full by end of SFY2026 Q4 Below addresses each identified challenge from above and potential remedies to assist in mitigation in the future: One claim was unsupported by medical records. To address the finding associated with the claim containing unsupported medical records, the agency will return the federal share for SFY 2026, Quarter 4 associated with PI case number 2026E00013. The agency elected not to issue an error letter to the provider at this time because the provider is currently undergoing other reviews, and we do not want to jeopardize those processes. This type of error continues to be monitored by the PI team through PAM reviews and clinical provider audit reviews. When findings occur, those reviews will issue error letters, which also serve as provider education. One claim was for an evaluation that lacked supporting documentation for the start/stop time. Policy: OAC 317:30-3-15-units based on time – The finding related to one claim involved an evaluation that lacked supporting documentation for the start and stop time. A provider education letter addressing this issue was sent on 5/19/2026 under PI case number 2026E00014. The case will be forwarded to Finance and included in the quarterly reporting once all provider deadlines related to appeal rights have passed. The provider education letter informed the provider of the error—specifically, the absence of documented beginning and end times in the medical record. This type of error continues to be monitored by the PI team through PAM reviews and clinical provider audit reviews. When findings occur, those reviews will issue error letters, which also serve as provider education. One claim was for services performed by a provider not contracted as a Medicaid provider. To address the finding associated with the claim containing unsupported medical records, the agency will return the federal share for SFY 2026, Quarter 4 associated with PI case number 2026E00013. The agency elected not to issue an error letter to the provider at this time because the provider is currently undergoing other reviews, and we do not want to jeopardize those processes. This type of error continues to be monitored by the PI team through PAM reviews and clinical provider audit reviews. When findings occur, those reviews will issue error letters, which also serve as provider education. One claim had a payment error totaling $1,100, of which $850 ($1,100 x the applicable Federal Medical Assistance Percentage (FMAP) rate (77.27% for QE 6/30/24) is the federal questioned costs. To address the finding associated with the Single Contract Agreement (SCA) expenditure: Finance was notified and corrected the expenditure on 7/21/2025 for one day totaling $1,100 and is in PI case number 2026E00015. Two claims had documentation errors. One claim had a progress note in the medical records that was not signed by the rendering provider. The second was a DRG claim that billed for a beginning date of service that was prior to the doctor’s admission order. None of these claims resulted in an underpayment or overpayment. & One claim had a documentation error. The dates of service were entered incorrectly, resulting in 16 days instead of the correct 15 days. This claim did not result in an underpayment or overpayment. These types of deficiencies continue to be monitored by the PI team through PAM reviews and clinical provider audit reviews. Anticipated Completion Date September 30, 2026 Responsible Contact Person Kristin Edwards, OHCA Senior Director of Program Integrity and Accountability, James Keethler, OHCA Director Data Analytics & Payment Accuracy

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Finding 1226866 (2024-078)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Reporting Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Finding Number 2024-078 Subject Heading (Financial) or AL no. and program name (Federal) 93.658 – Foster Care Planned Corrective Action OKDHS concurs that documentation supporting the preparation, review, and reconciliation of the CB-496 report should be strengthened. OKDHS has previously directed t...

Finding Number 2024-078 Subject Heading (Financial) or AL no. and program name (Federal) 93.658 – Foster Care Planned Corrective Action OKDHS concurs that documentation supporting the preparation, review, and reconciliation of the CB-496 report should be strengthened. OKDHS has previously directed the CARE team to improve documentation of adjustments and corrections made during the financial reporting process so that changes are clearly supported and can be independently reviewed. OKDHS is currently working through its broader financial reporting and reconciliation processes to improve consistency in the preparation, documentation, review, and retention of supporting records. This work includes strengthening the documentation of adjustments and corrections and ensuring that differences between financial reports and underlying accounting or cost allocation records are clearly identified, explained, and supported. OKDHS will continue developing and implementing standardized procedures for the preparation and review of federal financial reports. The updated process will include clearer documentation requirements for adjustments and corrections, reconciliation of reported amounts to supporting financial records, and evidence of independent review prior to submission. Anticipated Completion Date 9/30/2026 Responsible Contact Person Kayla Urtz

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Finding 1226852 (2024-067)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Questioned Costs Eligibility § 200.303

Finding Number 2024-067 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action OKDHS agrees that additional review procedures would have strengthened controls over the Workforce Support Grant payment approval process and may have prevented th...

Finding Number 2024-067 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action OKDHS agrees that additional review procedures would have strengthened controls over the Workforce Support Grant payment approval process and may have prevented the issuance of payments to individuals who did not meet all eligibility requirements at the time of application. The agency concurs that two Workforce Support Grant payments were issued to individuals whose employment termination dates preceded the application date. As a result, the individuals did not meet the program eligibility requirements for receipt of the workforce bonus payment. Upon identification of the issue, OKDHS reviewed the circumstances surrounding the payments and initiated appropriate corrective actions. The agency has evaluated the affected payments and will pursue recovery of funds as appropriate. OKDHS has reviewed the eligibility verification process associated with Workforce Support Grant payments and has implemented additional procedures designed to strengthen verification of employment status prior to payment approval. These procedures include enhanced review of available employment records and validation of eligibility information submitted as part of the application process. Additionally, OKDHS will continue recovery efforts related to identified ineligible payments and will monitor compliance with updated review procedures to reduce the likelihood of similar errors occurring in future provider assistance initiatives. Anticipated Completion Date N/A Responsible Contact Person Kayla Urtz

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Finding 1226851 (2024-037)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Finding Number 2024-037 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) respectfully disagrees with this finding because the questioned costs are based on application of standard Child ...

Finding Number 2024-037 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) respectfully disagrees with this finding because the questioned costs are based on application of standard Child Care payment requirements rather than the temporary COVID-19 payment flexibilities that governed the program during the audit period. Oklahoma's temporary Child Care payment flexibilities were incorporated into the Oklahoma Child Care and Development Fund (CCDF) State Plan Amendments and approved by the Administration for Children and Families (ACF). Those approved provisions constituted the governing payment requirements during the public health emergency and represent the appropriate criteria against which these transactions should be evaluated. The finding acknowledges that Oklahoma's temporary COVID-19 payment flexibilities included reimbursement of part-time school-age care at the full-time reimbursement rate and that these temporary policies were incorporated into the federally approved State Plan Amendments. These temporary payment methodologies were intentionally established to stabilize child care providers during the COVID-19 public health emergency. However, despite acknowledging the existence of these federally approved flexibilities, the questioned costs are derived by applying standard program requirements rather than the temporary payment framework approved by ACF and in effect during the audit period. Accordingly, the Agency believes the transactions should be evaluated using the federally approved emergency payment requirements rather than the standard reimbursement methodology that had been temporarily modified. The Agency further notes that the costs questioned are not based on payments for services provided during the regular school day, but rather on the auditors' interpretation of how the temporary COVID-19 payment flexibilities should have been applied. Likewise, the audit does not identify deficiencies in provider eligibility determinations, approved reimbursement rates, payment calculations, or the Agency's authority to implement the temporary payment flexibilities approved by ACF. Instead, the disagreement centers on the interpretation of the temporary payment rules that governed the program during the emergency period. OKDHS recognizes that the audit identified an opportunity to strengthen detective controls over attendance patterns and absent-day payments. The Agency has continued to enhance provider guidance, supervisory review, and analytical monitoring to better identify potential payment anomalies and improve consistency in the administration of payment policies. Because the questioned costs result from application of audit criteria that do not reflect the federally approved payment framework governing the audit period, OKDHS respectfully disagrees with the condition, cause, effect, recommendation, and questioned costs identified in this finding. Although the Agency disagrees with the audit's conclusions, Child Care Services has continued to review and clarify payment guidance, reinforce policy training, and strengthen oversight procedures to support consistent administration of both temporary and permanent payment policies. This will be implemented with the upcoming child care billing system. Anticipated Completion Date In Progress Responsible Contact Person Kayla Urtz

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Finding 1226850 (2024-033)

Material Weakness 2024

Oklahoma Water Resources Board

OK

Allowable Costs / Cost Principles Subrecipient Monitoring § 200.1 § 200.303 § 200.403

Finding Number 2024-033 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action The Agency agrees that additional oversight activities could have provided greater visibility into provider use of Stabilization Payments and has incorporated less...

Finding Number 2024-033 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action The Agency agrees that additional oversight activities could have provided greater visibility into provider use of Stabilization Payments and has incorporated lessons learned into subsequent provider assistance initiatives through enhanced monitoring, documentation expectations, and recovery procedures for confirmed noncompliance. However, OKDHS respectfully disagrees with several conclusions contained within the finding, including the characterization of questioned costs and the extrapolation of provider-specific exceptions across the broader population of Stabilization Payment recipients. The Child Care Stabilization Payment Program was established under the American Rescue Plan Act to provide emergency financial assistance intended to stabilize the child care industry during the COVID-19 public health emergency. Stabilization Payments were awarded using an approved payment methodology based upon provider eligibility, licensed capacity, and applicable STAR level. As previously communicated to the Administration for Children and Families (ACF), OKDHS does not concur with the assertion that the monitoring activities identified by SAI were required under the Stabilization Payment Program. The applicable Notice of Award specifically excluded significant portions of the traditional federal post-award administrative requirements, including most post-award requirements and the federal cost principles. Accordingly, OKDHS does not believe the Stabilization Payment Program should be evaluated using the same oversight framework applicable to traditional reimbursement or discretionary grant programs. Providers receiving Stabilization Payments were required to certify that funds would be used only for allowable purposes established by the American Rescue Plan Act and applicable program guidance and were responsible for maintaining supporting documentation for those expenditures. When information indicating potential misuse of funds is identified, OKDHS reviews the circumstances and pursues recovery actions as appropriate. While documentation obtained from providers may assist in evaluating provider compliance, the absence of documentation during the audit does not, by itself, establish that Stabilization Payments were improperly awarded or expended for unallowable purposes. OKDHS also respectfully disagrees with the treatment of unsupported expenditures as equivalent to known unallowable expenditures. Unsupported expenditures reflect circumstances in which documentation was unavailable for audit review and do not establish that funds were expended for unallowable purposes. As a result, the Agency believes the questioned costs materially overstate actual federal exposure. Finally, OKDHS does not concur that provider-specific exceptions may be extrapolated across the broader provider population. The exceptions identified by SAI reflect individual provider documentation and spending practices rather than a common agency-level eligibility, payment methodology, or processing error. Accordingly, the Agency does not believe the audit evidence supports extrapolating these exceptions to estimate program-wide questioned costs. Although the Stabilization Payment Program has concluded, OKDHS has strengthened oversight of subsequent provider assistance initiatives by enhancing monitoring procedures, documentation expectations, and recovery processes for confirmed provider noncompliance. The Agency will continue reviewing cases identified through audit activities and pursue recovery of confirmed unallowable expenditures in accordance with applicable federal requirements. Anticipated Completion Date N/A Responsible Contact Person Kayla Urtz

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Corrective Action Plans

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