Finding Number 2024-052 Subject Heading (Financial) or AL no. and program name (Federal) 10.551 – SNAP Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) concurs that opportunities existed to strengthen the EBT card inventory control environment, documentation proces...
Finding Number 2024-052 Subject Heading (Financial) or AL no. and program name (Federal) 10.551 – SNAP Cluster Planned Corrective Action The Oklahoma Department of Human Services (OKDHS) concurs that opportunities existed to strengthen the EBT card inventory control environment, documentation processes, replacement card monitoring, and overall governance supporting EBT operations. Since the audit period, the Agency has implemented significant corrective actions designed to strengthen accountability, improve documentation, enhance segregation of duties, and provide greater oversight of EBT inventory and related operational processes. The Agency recognizes that the finding identifies several distinct operational areas, including card inventory management, card destruction procedures, county reconciliation practices, card stock documentation, replacement card system functionality, and fraud monitoring. While each of these areas required evaluation and improvement, they represent separate control activities within the broader EBT control environment and have been addressed through targeted corrective actions appropriate to each process. To strengthen inventory accountability, the Agency has enhanced segregation of duties surrounding card printing, inventory reconciliation, and card destruction activities. During organizational changes associated with transitioning card printing responsibilities, system access was modified to preserve segregation of duties by removing eligibility system access from employees assuming card printing responsibilities. Additionally, EBT card destruction activities are now electronically documented through centralized tracking, with independent verification that destroyed cards have been properly deactivated within the EBT system. Daily inventory reconciliation procedures have also been strengthened through standardized reconciliation guidance, improved documentation requirements, and enhanced statewide oversight designed to identify and resolve discrepancies more timely. The Agency has also strengthened documentation surrounding EBT card stock inventory. Card stock reorder requests are now processed through a centralized electronic request process that automatically creates a permanent record of each request while providing simultaneous notification to the requesting office, vendor, and Electronic Payment Services (EPS). This process replaces reliance upon locally retained email requests and provides greater transparency, documentation retention, and management oversight over card inventory. Regarding excessive replacement card notices, the Agency concurs that a system malfunction prevented generation of certain notification letters during the audit period. Upon discovery, the underlying system issue was corrected, notice generation was restored, and monitoring procedures were implemented to promptly identify future processing failures. Because the delayed notices no longer reflected current replacement card activity, management determined that issuing notices more than one year after the triggering events would not effectively serve their intended purpose. Accordingly, the obsolete notices were not issued, and the notification process resumed prospectively following correction of the system issue. The Agency also corrected a separate system issue affecting replacement card count calculations to ensure future notices accurately reflect replacement activity. The Agency respectfully disagrees, however, with the conclusion that EBT transactions were not monitored for possible misuse or fraud during the audit period. The Office of Inspector General (OIG) utilized transaction monitoring tools, including EPPIC and BUMP, to identify potential trafficking and misuse through established fraud indicators such as even-dollar transactions, rapid successive transactions, geographically improbable transaction patterns, and other transaction anomalies indicative of potential trafficking activity. While the Agency acknowledges that documentation of these monitoring methodologies can be strengthened, it does not agree that fraud monitoring activities were absent during the audit period. The Agency also notes that excessive replacement card activity represents one of many potential indicators of fraud but is not, standing alone, determinative of trafficking or misuse. Fraud detection efforts utilize a risk-based approach that evaluates multiple data points and investigative indicators to prioritize limited investigative resources toward the highest-risk cases. Accordingly, the Agency believes replacement card activity should be considered as one component of a broader fraud detection strategy rather than as an independent indicator requiring investigation in every instance. To further strengthen the overall EBT control environment, the Agency has implemented annual EBT policy training and employee attestations for personnel responsible for EBT operations. Completion of these requirements is mandatory and tracked as part of each employee's official training record, with system access removed for employees who fail to complete the required training. The Agency has also strengthened user access reviews, enhanced onsite monitoring, implemented centralized incident tracking, and expanded management oversight to improve accountability and ensure timely resolution of identified control deficiencies. Collectively, these improvements extend beyond the individual recommendations contained within this finding and reflect the Agency's commitment to establishing a stronger and more sustainable governance framework over EBT operations. Rather than relying solely upon additional training, the Agency has redesigned several operational processes through centralized tracking, automated documentation, strengthened segregation of duties, enhanced monitoring, and improved management oversight to reduce risk and improve accountability across the EBT program. Accordingly, the Agency concurs that the EBT control environment required strengthening and has implemented significant corrective actions addressing both the specific operational issues identified during the audit and broader opportunities to improve governance over EBT operations. However, the Agency respectfully disagrees with the conclusion that fraud monitoring activities were not performed during the audit period and believes the finding is more accurately characterized as an opportunity to strengthen documentation, coordination, and governance surrounding existing fraud monitoring activities rather than the absence of such activities. Anticipated Completion Date Substantially complete Responsible Contact Person Kayla Urtz