Corrective Action Plans

Finding 515608 (2023-001)

Material Weakness 2023

City of Clarion

IA

Internal Control / Segregation of Duties

The City should review its control activities to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials, to provide additional controls through review of financial transactions, reconciliations and financial report. The r...

The City should review its control activities to obtain the maximum internal control possible under the circumstances utilizing currently available staff, including elected officials, to provide additional controls through review of financial transactions, reconciliations and financial report. The reviews should be documented by the signature or initials of the reviewer and the date of the review.

View Audit 333381

Finding 515573 (2023-008)

Significant Deficiency 2023

Unity Health Care, Inc.

MD

Eligibility Internal Control / Segregation of Duties Subrecipient Monitoring

Management Response #2023-008: Due to staff turnover, the Corporation did not consistently enforce segregation of duties between the individual responsible for determining income eligibility and the one completing the medical risk assessment. The Corporation also failed to provide sufficient support...

Management Response #2023-008: Due to staff turnover, the Corporation did not consistently enforce segregation of duties between the individual responsible for determining income eligibility and the one completing the medical risk assessment. The Corporation also failed to provide sufficient support to verify that the applicant signed the Rights and Obligations statement. Corrective Action Plan: • All eligibility verification data, including screenshots and signed Rights and Obligations statements, will be stored in a centralized, secure shared drive maintained and managed by the WIC Director to ensure it is protected with limited access and password protection. The drive will be organized using a de-identified naming convention to ensure privacy while maintaining ease of access for authorized staff. • To maintain a robust system of checks and balances, tasks related to eligibility verification and documentation will be divided among different team members. This separation will prevent any one individual from having full control over the process, reducing the risk of oversight or potential errors. • The WIC Department’s policy and procedure manuals will be revised and updated to include the new eligibility verification process. • To ensure adherence to the new protocols, periodic audits and review sessions will be conducted by the WIC Director or designated compliance staff to verify that documentation is being properly maintained and that all procedures are followed. Staff will be required to undergo refresher training sessions as needed to reinforce the updated protocols and best practices. Responsible Party: Tracy Harrison, COO

View Audit 333283

Finding 515490 (2023-129)

Significant Deficiency 2023

State of Arizona

AZ

Student Financial Aid Eligibility Matching / Level of Effort / Earmarking § 200.303

Cluster Name: Student Financial Assistance Cluster Assistance listing numbers and names: Northern Arizona University 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study 84.038 Federal Perkins Loan Program—Federal Capital Contributions 84.063 Federal Pell Grant Progra...

Cluster Name: Student Financial Assistance Cluster Assistance listing numbers and names: Northern Arizona University 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study 84.038 Federal Perkins Loan Program—Federal Capital Contributions 84.063 Federal Pell Grant Programs 84.268 Federal Direct Student Loans 84.379 Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) 93.364 Nursing Student Loans 93.925 Scholarships for Health Professions Students from Disadvantaged Backgrounds—Scholarships for Disadvantaged Students (SDS) Agency: Northern Arizona University (NAU) Name of contract person and title: Bradley Miner, NAU Associate Vice President and Comptroller Anticipated Completion Date June 30, 2024 Agency’s Response: Concur The University agrees with this finding and although it relies on the Federal agencies for valid identity verification, the University has already taken significant corrective action to proactively monitor and detect fraudulent student identities. The University has various internal controls, system fraud controls, and integrity measures in place as required or identified as industry best-practice to mitigate and prevent the increasing sophistication of fraudulent activity. In academic year 2023 the University had 282 online students selected for Verification by the Department of Education (ED). The 8 isolated fraud instances were the only identified fraud cases. The University receives valid identity verification checks from the Department of Education (ED) as an input for creating student profiles. Additionally, the University works with administrative agencies and leverages FAFSA checks conducted by Social Security Administration (SSA), Department of Veteran Affairs (VA), Department of Homeland Security (DHS), National Student Loan Data System (NSLDS), Department of Defense (DOD), Department of Justice (DOJ). Financial Aid does not disburse until enrollment verification is complete. 1. The University has reviewed prior fiscal years to determine if additional fraudulently enrolled students received student financial assistance, and if fraudulent loans and awards were awarded. The University conducted an in-depth analysis of multiple qualitative attributes of students receiving financial assistance. This analysis identified high risk students receiving loans and awards. Students in this population were required to complete V4 verification. 2. The University implemented anti-fraud measures as an alternative to automated student Internet Protocol (IP) verification. During the analysis to identify fraudulently enrolled students, the University identified programs at high-risk for fraudulent activity. As a proactive fraudulent activity identification measure, the University will require all students in high-risk programs, with active FAFSAs to submit and complete V4 identity verification. This anti-fraud measure will identify fraudulently enrolled students prior to the disbursement of student financial assistance including loans and awards. 3. The University has put in to place a number of additional verification measures and detective controls to validate online student identities and check for repetitive information and trends. The University is conducting feasibility studies to determine if the suggested guidance for Internet Protocol student verification abides by certain security and privacy standards and policies. Additionally, the University has concern with fraudsters ability to mask Internet Protocols by deploying Virtual Private Networks (VPNs). This renders the advanced protocols ineffective. As a compensating control, the University will begin selecting 5% of online students for V4 verification. Random sampling of online students for identity verification provides enhanced detective measures to combat the risk of identity theft for use in financial aid fraud. Additionally, the University put in place several upfront measures to detect repetitive information and trends to identify potentially fraudulent activity. Detective monitoring reporting identifies duplicate deposit information, redundant student email information, and duplicate student address information. The Department will continue to utilize these successful anti-fraud measures to proactively identify fraudulent student identities. 4. The University will continue its efforts working with law enforcement agencies to recover improper payments for fraudulent claims it paid due to identity theft, to the extent practicable. The University worked with law enforcement agencies to investigate the fraud. At the conclusion of the investigation $138,135 has been repaid. The University will continue to partner with federal, state, and local law enforcement agencies and financial institutions across the country to recover losses and aggressively pursue legal action against perpetrators of fraud.

View Audit 333243

Finding 515487 (2023-120)

Significant Deficiency 2023

State of Arizona

AZ

Subrecipient Monitoring Internal Control / Segregation of Duties Student Financial Aid

Assistance listing number and program name: 93.658 Foster Care—Title IV-E 93.658 COVID-19 - Foster Care—Title IV-E Agency: Arizona Department of Child Safety (DCS) Name of contact person and title: Emilio Gonzales, DCS Audit Administrator Anticipated completion date: Fiscal Year 2025 Agency’s Respo...

Assistance listing number and program name: 93.658 Foster Care—Title IV-E 93.658 COVID-19 - Foster Care—Title IV-E Agency: Arizona Department of Child Safety (DCS) Name of contact person and title: Emilio Gonzales, DCS Audit Administrator Anticipated completion date: Fiscal Year 2025 Agency’s Response: Concur The Department will comply with the Federal Funding Accountability and Transparency Act (FFATA) and Federal Uniform Guidance regulations in accordance with the Department’s Grant policies and procedures. As of November 2024, the Department worked with the federal agency to resolve the inability to submit outstanding subaward information prior to January 2024. The FFATA reporting was completed for fiscal years 2024, 2023, 2022 and 2021. The Department will also continue to follow its policies and procedures for reporting subaward actions, as required.

View Audit 333243

Finding 515471 (2023-133)

Significant Deficiency 2023

State of Arizona

AZ

Internal Control / Segregation of Duties Eligibility Reporting

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of B...

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Budget and Finance Anticipated completion date: December 31, 2024 Agency’s Response: Concur AHCCCS concurs with the finding in this audit and would like to note this finding is related to no notice of disenrollment being mailed to a deceased member, and not related to enrollment ineligibility. AHCCCS Division of Member and Provider Services (“DMPS”) will identify the standard process for notification that should have been followed for this case. Once the root cause of the issue has been established, AHCCCS will assess current processes and procedures, as appropriate, to address this issue.

View Audit 333243

Finding 515470 (2023-132)

Material Weakness 2023

State of Arizona

AZ

Questioned Costs Special Tests & Provisions Material Weakness

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of B...

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Budget and Finance Anticipated completion date: December 31, 2024 Agency’s Response: Concur AHCCCS concurs with the finding and would like to note this matter was discovered through internal review of OIG recoupment documentation and filings with CMS. This matter was reviewed in detail by our financial management team and AHCCCS determined this was caused by a few factors: (1) staffing issues and employee turnover in all units involved in the process to return OIG recoupments to CMS. (2) A breakdown of inter and intra-departmental communication and collaboration. Efforts to eliminate this from occurring in the future include recently filling the related following positions that experienced turnover: Accounting Supervisor, Reporting Administrator, and 2 Accounting Specialists. In addition, AHCCCS has increased collaboration across the respective departments and divisions to ensure the federal share of all case recoupments is timely returned to CMS. Further, we have revised our standard work processes to include monthly reconciliations of case recoupments among the various departments and divisions. AHCCCS anticipates to have returned the federal share to CMS for all case recoupments identified by December 31, 2024.

View Audit 333243 Questioned Costs: $1

Finding 515469 (2023-131)

Material Weakness 2023

State of Arizona

AZ

Questioned Costs Special Tests & Provisions Material Weakness

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact persons and titles: Vanessa Templeman, Inspector General, AHCCCS Offic...

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact persons and titles: Vanessa Templeman, Inspector General, AHCCCS Office of Inspector General; Jeff Tegen, Assistant Director, AHCCCS Division of Budget and Finance Anticipated completion date: December 31, 2024 Agency’s Response: Concur AHCCCS OIG agrees with the finding as stated above. AHCCCS OIG commits to a review of the current Deferred Process and will determine areas of improvement to include; timelines for deferred case review completion, quarterly completed deferred case review reports, and required documentation for all deferred case processes.

View Audit 333243 Questioned Costs: $1

Finding 515468 (2023-130)

Material Weakness 2023

State of Arizona

AZ

Questioned Costs Special Tests & Provisions Procurement, Suspension & Debarment

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of B...

Assistance listing number and program name: 93.778 Medicaid Assistance Program (part of the Medicaid Cluster 93.778 COVID-19 Medicaid Assistance Program Agency: Arizona Health Care Cost Containment System (AHCCCS) Name of contact person and title: Jeff Tegen, Assistant Director, AHCCCS Division of Budget and Finance Anticipated completion date: December 31, 2024 Agency’s Response: Concur In May 2023, AHCCCS announced its initial findings of credible and willful fraud by sober-living providers across the state. Since then, AHCCCS has suspended more than 300 providers, assisted over 10,000 individuals with the humanitarian response, and implemented more than 20 new initiates to combat fraud, waste, and abuse in the Medicaid program. As the extent of the fraud was revealed, AHCCCS recognized the need for holistic and systemwide changes. AHCCCS partnered with the Attorney General and Governor’s Office to develop a comprehensive plan to address the loopholes fraudulent providers were exploiting. Stop gap strategies implemented include, but may not limited to the following: · Increased scrutiny of claims based on claims volume. · Issued a moratorium on new provider registrations for impacted provider types · Prevented Reimbursement of Claims for Impossibly Rendered Services · Claims for Substance Abuse Services for Children under the age of 12 to Require Clinical Review Prior to Payment · Set thresholds for services to initiate a prepayment review. · Required claims to be billed for specific dates of service rather than ranges. · Flagged claims for services of the same style/overlapping codes. · Created a prepayment review process for providers utilizing suspicious billing practices. · Eliminated retroactive billing. · Credible Allegation of Fraud (“CAF”) suspensions include both provider entities and owners/ behavioral health (“BH”) practitioners. · Implemented ID.Me identity verification for AHCCCS Online. · Required providers to disclose any third-party billing relationships. · Behavioral Health Providers are now considered high-risk provider types for provider enrollment. · Per Diem codes have been set to only be able to be billed once per day. · Practitioners, including Behavioral Health Technicians, can no longer be patients at the same provider. · Worked with the Arizona Corporation Commission to flag suspicious registrations. · Ensured AHCCCS coding adhered to National Correct Coding Initiative (“NCCI”) standards and confirmed no edits had been turned off. · Streamlined AHCCCS reporting of bad actors to the appropriate professional oversight boards. Stop gap strategies in process include, but may not be limited to, the following: · Implementing eligibility integrity requirements for AIHP enrollment. · Linking BHP to BH companies they work for. · Link BH Providers to BH facilities they work at. · Conduct onsite quality of care reviews for patients in treatment longer than 90 days. · Require medical records to define specialized services. · Implement a new pre/post pay claims system. · Mandatory transition to Electronic Fund Transfer (direct deposit) for all AHCCCS provider reimbursements. AHCCCS continues to investigate and identify areas of concern and implement necessary system improvements until it is determined that the integrity of the AHCCCS provider network is restored.

View Audit 333243 Questioned Costs: $1

Finding 515369 (2023-127)

Material Weakness 2023

State of Arizona

AZ

Allowable Costs / Cost Principles Cash Management Reporting § 200.301 § 200.302 § 200.303

Assistance listing numbers and program names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance to Non-Public Schools (CRSSA EAN...

Assistance listing numbers and program names: 84.425D COVID-19 - Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance to Non-Public Schools (CRSSA EANS) Agency: Arizona Department of Education (ADE) Name of contact persons and titles: Michelle Udall, ADE Associate Superintendent Dr. Sarka White, ADE Deputy Associate Superintendent Anticipated completion date: November 30, 2024 Agency’s response: Concur ESSER Reporting will be validated by at least 2 people before submitting to U.S. Department of Education. This validation will include the reconciliation of data from the LEA to ADE's report. ADE is finalizing policies and procedures for validating the data prior to submission. ADE has already begun implementing a reconciliation system to ensure accurate reporting in the EANS annual performance report. This system tracks obligations by category, expenses, and appropriate earmarking of nonpublic schools (e.g., DUNS/UEI, grades served). ADE is finalizing general policies and procedures for how this data is compiled, interpreted, and reported based on the initial implementation and corrections of the EANS program.

View Audit 333243

Finding 515348 (2023-126)

Material Weakness 2023

State of Arizona

AZ

Reporting Subrecipient Monitoring Internal Control / Segregation of Duties § 200.303

Assistance listing number and program name: 84.010 Title I Grants to Local Educational Agencies 84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 84.425D COVID-19 - Education Stabilization Fund-Elementary and Secondary School Emergency Relief (ESS...

Assistance listing number and program name: 84.010 Title I Grants to Local Educational Agencies 84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) 84.425D COVID-19 - Education Stabilization Fund-Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425U COVID-19 - Education Stabilization Fund - American Rescue Plan - Elementary and Secondary Schools Emergency Relief (ARP ESSER) Fund Agency: Arizona Department of Education (ADE) Name of contact persons and titles: Nicole Von Prisk, ADE Deputy Associate Superintendent of Grants Management Matt McClary, ADE Compliance Officer Anticipated completion date: October 30, 2024 Agency’s response: Concur Arizona Department of Education has worked in cooperation with our vendor to correct outdated SQL queries that were identified and returning only approved grant award amounts rather than all awarded amounts, regardless of approval status. We will ensure that the original award amounts are being queried and, in return, reported within the FFATA Subaward Reporting System (FSRS). Additionally, through the reconciliation process each month, correct award amounts will align with corresponding Federal Award Identification Number (FAIN). We have implemented an automated monthly reporting workflow/schedule which will help ensure required FFATA reporting is submitted timely. This process automation helps prompt monthly FFATA reporting uploads by leveraging office tools that are readily available and ensures monthly upload deadlines are met by automatically scheduling the task and requiring follow-up by the assignee. In January of 2024 the staff assigned to FFATA uploads changed again (for the fourth time in a year) and at that point a new staff member assumed responsibility for FFATA uploads. As numerous corrections needed were discovered through the reconciliation process, new reports were uploaded. Some of these were original uploads for entities that were missing FSRS information altogether and some were corrections to previously uploaded yet incorrect information. With each monthly upload, a new date was being captured and while some of the information was new entity award information, not all of the information being updated was untimely. This has been a long and arduous process, and we look forward to not having continued FFATA findings, as we are making progress to correcting award information for all federal grants moving forward from this point. Our Compliance Officer reconciles the current FSRS award information monthly with our Lead Grants Coordinator or our Deputy Associate Superintendent. Any missing or duplicate information is corrected prior to the FSRS upload.

View Audit 333243

Finding 515347 (2023-125)

Material Weakness 2023

State of Arizona

AZ

Questioned Costs Subrecipient Monitoring Internal Control / Segregation of Duties § 200.303 § 200.332 § 200.513 § 200.521

Assistance listing numbers and program names: 84.010 Title I Grants to Local Educational Agencies 84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) Agency: Arizona Department of Education (ADE) Name of contact person and title: Dr. Sarka White, AD...

Assistance listing numbers and program names: 84.010 Title I Grants to Local Educational Agencies 84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) Agency: Arizona Department of Education (ADE) Name of contact person and title: Dr. Sarka White, ADE Deputy Associate Superintendent Anticipated completion date: December 15, 2024 Agency’s response: Concur The Arizona Department of Education (ADE) has already begun implementing a program to ensure accurate and quality programmatic monitoring for all ESEA programs which specifically requires LEAs to meet 100% of the requirements of all statutorily required items to be monitored regardless of CMO affiliation. This development of programmatic monitoring will design a system of integrity to allow each LEA to have unique monitoring findings and ensure they are treated as all other LEAs regardless of management status. The Arizona Department of Education (ADE) is finalizing all program policies and procedures along with field training and staff training on how this program is implemented. ADE began providing an assurance document to charters in May 2024 which asks the charters to assure that if they do business with a CMO, the CMO does not have fiscal or operational authority for the LEA. The charter is asked to submit to ADE a copy of their organizational chart, along with the assurances document. Grants Management has created a new user role in the Grants Management Enterprise (GME) system, called the LEA Contracted Update role. This role allows a CMO person the access to perform fiscal tasks for which they have been contracted but does not hold the final submit or approve capacity, that must be reserved for authorized employees of the LEA. Grants Management has provided the placeholder for the assurance and organizational chart in the LEA Document Library, along with the communication to eligible entities (charters in this case). Individual program areas within ADE who review and approve funding applications will be responsible for verifying the assurances have been signed and uploaded and only authorized people at the LEA are actioning funding applications in GME prior to the program area giving director approval to the application.

View Audit 333243 Questioned Costs: $1

Finding 515346 (2023-124)

Material Weakness 2023

State of Arizona

AZ

Subrecipient Monitoring Eligibility Period of Performance § 200.303

Assistance listing number and program name: 84.010 Title I Grants to Local Educational Agencies Agency: Arizona Department of Education (ADE) Name of contact person and title: Tim McCain, ADE Chief Financial Officer Chris Brown, ADE Business Officer of Education Programs Anticipated completion date:...

Assistance listing number and program name: 84.010 Title I Grants to Local Educational Agencies Agency: Arizona Department of Education (ADE) Name of contact person and title: Tim McCain, ADE Chief Financial Officer Chris Brown, ADE Business Officer of Education Programs Anticipated completion date: January 2025 Agency’s response: Concur • ADE is working on standardizing fiscal efficiency by adopting uniform guidelines that monitor obligations and expenditures. These guidelines outline available resources and determine allocation amounts within federal awards and earmark expiration dates within programs. • ADE is also working on standardizing how funds may be reallocated to ensure that no funds are at risk of reverting to USED. Specifically, school improvement funds are now also tracked as part of Title I allocation and reallocation process. This will ensure funds are earmarked and obligated in a timely fashion (i.e., in the period of performance). This item is planned to be completed by January 2025.

View Audit 333243

Finding 515225 (2023-103)

Material Weakness 2023

State of Arizona

AZ

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

Assistance listing number and program name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Agency: Arizona Governor’s Office of Strategic Planning and Budgeting (Office) Name of contact person and title: Sarah Brown, Director Anticipated completion date: February 28, 2025 Agency...

Assistance listing number and program name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Agency: Arizona Governor’s Office of Strategic Planning and Budgeting (Office) Name of contact person and title: Sarah Brown, Director Anticipated completion date: February 28, 2025 Agency’s response: Concur The Office agrees with this finding and will begin to take corrective action to bring the program fully into compliance with SLFRF Federal grant reporting requirements. The Office recognizes the importance of transparency in utilizing Federal grants and has taken significant corrective action to resolve any inaccuracies in Federal grant reporting. The Office has implemented specific actions to ensure reporting inaccuracies and program expenditure understatements/overstatements do not occur. During fiscal year 2025, the Office is taking corrective action to improve SLFRF reporting, including the following: • Award Reconciliation—The Office has conducted a comprehensive review and extensive reconciliation of all awards to identify reporting inaccuracies. • Expenditure Reconciliation—The Office staff responsible for preparing the SLFRF quarterly reports is completing the reconciliation of all expenditures to the State’s accounting records, which are the official expenditures made for the program. • Enhanced Reporting Mechanisms—The Office will review, correct, and/or resubmit any inaccurately reported information. The staff responsible for preparing the SLFRF quarterly reports is no longer reconciling to the Office’s internal grants-management system. • Update Written Procedures—Based on the comprehensive review noted in the response above, the Office is working to develop improved reporting procedures to ensure accurate submission of grant expenditure data. This may include revised standardized templates, improved guidelines, and enhanced communication channels to improve reporting accuracy. • Ongoing Training—Office staff now attend ongoing internal and external training to improve their understanding of compliance requirements, identify noncompliance, and actively reduce the risks of reporting errors. The Office will continue to strengthen internal controls to prevent similar issues from occurring in the future. This will involve strengthening oversight, providing additional training to staff members in reporting processes, and implementing regular quality assurance checks. As of this date, the Office has allocated sufficient resources to comply with the award terms and program reporting requirements by establishing a new Grants Technology and Data team dedicated to the oversight of performing necessary SLFRF program reporting procedures.

View Audit 333243

Finding 515214 (2023-108)

Significant Deficiency 2023

State of Arizona

AZ

Period of Performance Reporting Internal Control / Segregation of Duties § 200.303 § 200.344

Assistance listing number and program name: 21.023 COVID-19 - Emergency Rental Assistance Program Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Leanna DeKing, DES Policy Planning Project Manager Anticipated completion date: June 30, 2025 Agency’s Response: ...

Assistance listing number and program name: 21.023 COVID-19 - Emergency Rental Assistance Program Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Leanna DeKing, DES Policy Planning Project Manager Anticipated completion date: June 30, 2025 Agency’s Response: Concur The Department of Economic Security will address the audit recommendations as follows: The Department will ensure program costs are properly recorded in the financial system during the period of performance and only obligated costs are spent during the liquidation period. Closeout activities, such as direct administrative costs, will be obligated prior to the end of the award period and spent within the liquidation period, or 120 calendar days after the period of performance ends. The Department will allocate sufficient resources to perform essential grant closeout functions to help prevent inappropriate charges. The Department will also update existing grant closeout procedures to require a review and approval of grant expenditures during the liquidation period to ensure they are allowable and properly obligated prior to the period of performance end date.

View Audit 333243

Finding 515213 (2023-107)

Material Weakness 2023

State of Arizona

AZ

Reporting Period of Performance Internal Control / Segregation of Duties § 200.303 § 200.334

Assistance listing number and program name: 21.023 COVID-19 - Emergency Rental Assistance Program Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Molly Bright, DES CCSD Assistant Director Anticipated completion date: June 30, 2025 Agency’s response: Concur The...

Assistance listing number and program name: 21.023 COVID-19 - Emergency Rental Assistance Program Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Molly Bright, DES CCSD Assistant Director Anticipated completion date: June 30, 2025 Agency’s response: Concur The Department of Economic Security will address the audit recommendations as follows: The Department will prepare and retain detailed documentation including system reports, queries, screenshots, and other evidence supporting the program information being reported to the federal agency for each Emergency Rental Assistance Program (ERAP) award. DES will also abide by its policies and procedures to retain all records relating to federal awards for a period of 5 years after all the federal funds are expended. For future related programs with this requirement, the Department will develop and implement internal control policies and procedures that ensure systems properly display complete and accurate data on the federal reporting dashboard as instructed by the federal agency’s reporting guidelines. Additionally, these policies and provisions will ensure that any future ERAP award funding received by the Department will be separately reported to avoid commingling. Finally, the Department will require that ERAP personnel verify the reported program information to ensure all report element sections are complete and accurate, and that it matches the underlying benefits and financial systems data. The Department sunset the ERAP program on October 13th, 2023, due to an exhaustion of ERA 1 and ERA 2 funding.

View Audit 333243

Finding 515207 (2023-110)

Significant Deficiency 2023

State of Arizona

AZ

Internal Control / Segregation of Duties Reporting Matching / Level of Effort / Earmarking § 200.303 § 200.334

Assistance listing number and program name: 17.225 Unemployment Insurance Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Tracy Raymer, DES Business Analyst Manager Anticipated completion date: June 30, 2025 Agency’s Response: Concur The Department of Economi...

Assistance listing number and program name: 17.225 Unemployment Insurance Agency: Arizona Department of Economic Security (DES) Name of contact person and title: Tracy Raymer, DES Business Analyst Manager Anticipated completion date: June 30, 2025 Agency’s Response: Concur The Department of Economic Security will address the audit recommendations as follows: Develop and implement written policies and procedures to ensure it prepares and retains detailed documentation, such as system reports, queries, or screenshots, to support the program information it reports to the federal agency for the UI program for a period of at least three (3) years. Beginning July 2024, the Department has assembled and retained all detailed supporting source documentation that supports the data provided in the 9050 - Time Lapse of All First Payments except Workshare report and will retain it for a period of no less than three (3) years.

View Audit 333243

Finding 515206 (2023-109)

Significant Deficiency 2023

State of Arizona

AZ

Special Tests & Provisions Reporting Internal Control / Segregation of Duties § 200.303

Assistance listing number and program name: 17.225 Unemployment Insurance Agency: Arizona Department of Economic Security (DES) Name of contact persons and titles: Jacqueline Butera, DES Administrator Jean Ahumada, DES BAM Manager Anticipated completion date: March 18, 2024 Agency’s Response: Concu...

Assistance listing number and program name: 17.225 Unemployment Insurance Agency: Arizona Department of Economic Security (DES) Name of contact persons and titles: Jacqueline Butera, DES Administrator Jean Ahumada, DES BAM Manager Anticipated completion date: March 18, 2024 Agency’s Response: Concur The Department of Economic Security will address the audit recommendations as follows: The controls the Department put in place to address the federal regulation requirements, are multi-year remediation plans. The controls include recruiting and retaining a workforce with a strong knowledge and understanding of Unemployment Insurance Laws, Policies, and Procedures, as well as proper case management skills. From December 2022 through March 2024, the Benefit Accuracy and Measurement (BAM) unit experienced an 18 percent attrition rate. Given the fact that the BAM unit is made up of nine (9) auditors, one of which is a lead who does not receive a full caseload, an 18 percent attrition rate results in a significant impact on the distribution of workloads amongst experienced and new staff, respectively. As of December 2023, the BAM unit was 90 percent staffed with only 67 percent of auditors working a full caseload. This is because new hires with prior program knowledge do not receive a full caseload until three (3) months from their new hire date. During SFY 2023, the Department carefully balanced meaningful recruitments, staff training, and case assignments in order to support staff retention while addressing the federal timeliness requirements. As of March 18, 2024, the Department fully implemented the multi-year remediation plan, and has shown sustainable performance improvement in both the paid and denied claims accuracy measures since September 2023, due to these controls. As of SFY 2024, the Department has met all Paid Case Accuracy and Denied Case Accuracy timeliness performance measures.

View Audit 333243

Finding 515129 (2023-002)

Material Weakness 2023

Exira-Elk Horn-Kimballton Community School District

IA

Internal Control / Segregation of Duties

We will continue to review our control procedures to obtain the maximum internal control possible under the circumstances.

View Audit 333159

Finding 515081 (2023-001)

Material Weakness 2023

Shalom Health Care Center, Inc.

IN

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Cash Management

The following steps have been taken or will be taken to address Finding 2023-001: Shalom Health Care Center, Inc. has made some changes in how the draws are done with each payroll versus previously per month. Shalom has also hired new staff to help keep up with the grants and payrolls and entering d...

The following steps have been taken or will be taken to address Finding 2023-001: Shalom Health Care Center, Inc. has made some changes in how the draws are done with each payroll versus previously per month. Shalom has also hired new staff to help keep up with the grants and payrolls and entering data into the accounting system, as we had previously had turnover and were using temp services for some of the prior year. Contact Person: Michael A. Nino, Chief Financial Shalom Health Care Center, Inc. anino@shalomhealthcenter.org 317-269-7198

View Audit 333141

Finding 514720 (2023-004)

Material Weakness 2023

Coastal Harvest

WA

Special Tests & Provisions Cash Management Eligibility § 200.303

Corrective Action: Coastal Harvest will implement formal internal control procedures, including independent reviews or other checks and balances, for all significant compliance requirements for its federal programs. Anticipated Completion Date: June 30, 2024

View Audit 333105

Finding 514679 (2023-005)

Material Weakness 2023

Career Academy of South Bend, INC

IN

Special Tests & Provisions Internal Control / Segregation of Duties

2023-005 SPECIAL TESTS AND PROVISIONS Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has created and filled the position of Manager of Grants Management. This staff member will be responsible for the oversight and management of all grants. Addit...

2023-005 SPECIAL TESTS AND PROVISIONS Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has created and filled the position of Manager of Grants Management. This staff member will be responsible for the oversight and management of all grants. Additionally CANOPS has contracted with an outside firm that specializes in SBOA compliance, as well as Federal Award Compliance in line with Uniform Guidance. The firm will assist in the development of the required manuals, policies, procedures and review processes. The current estimated completion date is February 28, 2025.

View Audit 333072

Finding 514668 (2023-003)

Material Weakness 2023

Career Academy of South Bend, INC

IN

Internal Control / Segregation of Duties Material Weakness School Nutrition Programs

2023-003 Internal Control over Compliance Requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has contracted with an outside firm that specializes in SBOA compliance, as well as Federal Award Compliance in line with Uniform Guidance. Th...

2023-003 Internal Control over Compliance Requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has contracted with an outside firm that specializes in SBOA compliance, as well as Federal Award Compliance in line with Uniform Guidance. The firm will assist in the development of the required manuals, policies, procedures and review processes. The current estimated completion date is February 28, 2025.

View Audit 333072

Finding 514642 (2023-002)

Material Weakness 2023

Memorial Community Corporation Dba Cedar Spring Terrace

RI

Internal Control / Segregation of Duties

FINDING 2023-002: Section 202 Project Rental Assistance ALN# 14.157 Recommendation: Management has designed and implemented internal controls to ensure that deposits are made timely to the replacement reserve. Action Taken: Management agrees with the auditors' finding and recommendation.

View Audit 333017

Finding 514641 (2023-001)

Material Weakness 2023

Memorial Community Corporation Dba Cedar Spring Terrace

RI

Internal Control / Segregation of Duties

FINDING 2023-001: Section 202 Project Rental Assistance ALN# 14.157 Recommendation: Management has designed and implemented internal controls to ensure all required documentation is collected and maintained for all tenants and will conduct an inspection of all tenant files to ensure completeness. Ac...

FINDING 2023-001: Section 202 Project Rental Assistance ALN# 14.157 Recommendation: Management has designed and implemented internal controls to ensure all required documentation is collected and maintained for all tenants and will conduct an inspection of all tenant files to ensure completeness. Action Taken: Management agrees with the auditors' finding and recommendation.

View Audit 333017

Finding 514627 (2023-002)

Material Weakness 2023

Hartley-Melvin-Sanborn Community School District

IA

Internal Control / Segregation of Duties Reporting

The District will review its control procedures to obtain the maximum internal control possible.

View Audit 332999

Corrective Action Plans

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