Corrective Action Plans

Finding 397977 (2023-006)

Material Weakness 2023

SD

Special Tests & Provisions Eligibility Material Weakness

Finding 2023-006: Material Weakness in Internal Control over Compliance - Special Tests and Provisions ...

Finding 2023-006: Material Weakness in Internal Control over Compliance - Special Tests and Provisions Corrective Action Plan: I. The DLR RA Management Analyst will prepare and submit all ETA Reports (Preparer). a. The Management Analyst will initially enter all data into the report and ensure its initial accuracy. b. The Management Analyst will also be responsible for addressing any warning message(s) or error message(s) that are generated by the reporting system. c. Once the data has been entered and all warning and error messages have been addressed, the Management Analyst will notify the DLR RA Senior Internal Auditor that the ETA Report is complete and ready for their review. 2. The DLR RA Senior Internal Auditor will Review and Sign Off on all ETA reports (Reviewer) a. The Senior Auditor will review the completed report to ensure its accuracy. b. If an issue is found during the review, it will be researched and corrected. c. Once the Senior Internal Auditor has verified all data elements within the report are correct, they will email the Management Analyst signing off on the data presented and give approval for the Management Analyst to submit the final report. 3. The Management Analyst submits the final report. 4. Once submitted, the Management Analyst will print the submitted copy of the final report to PDF. 5. Once in PDF form, the Management Analyst will add the following notes: a. Prepared By: [Name] b. Date and Time c. Reviewed By: [Name] d. Date and Time 6. With the "Prepared/Reviewed Note" added, it is now considered the "Finalized Report." 7. The Management Analyst will save an electronic copy of the Finalized Report along with copies of any supporting documentation and any email communications between the "Preparer" and the "Reviewer" to the QA records to be retained according to DLR Record Retention policies. 8. All RA Staff can access all finalized reports through the RA MS SharePoint site. Contact Person: Pauline Heier, Director, Reemployment Assistance Anticipated Completion Date: No anticipated completion date was listed in the separately issued audit report.

View Audit 306685

Finding 397976 (2023-005)

Material Weakness 2023

State of South Dakota

SD

Material Weakness Reporting Internal Control / Segregation of Duties

Finding 2023-005: Material Weakness in Internal Control over Compliance - Reporting ...

Finding 2023-005: Material Weakness in Internal Control over Compliance - Reporting Corrective Action Plan: I. The DLR RA Management Analyst will prepare and submit all ETA Reports (Preparer). a. The Management Analyst will initially enter all data into the report and ensure its initial accuracy. b. The Management Analyst will also be responsible for addressing any warning message(s) or error message(s) that are generated by the reporting system. c. Once the data has been entered and all warning and error messages have been addressed, the Management Analyst will notify the DLR RA Senior Internal Auditor that the ETA Report is complete and ready for their review. 2. The DLR RA Senior Internal Auditor will Review and Sign Off on all ETA reports (Reviewer) a. The Senior Auditor will review the completed report to ensure its accuracy. b. If an issue is found during the review, it will be researched and corrected. c. Once the Senior Internal Auditor has verified all data elements within the report are correct, they will email the Management Analyst signing off on the data presented and give approval for the Management Analyst to submit the final report. 3. The Management Analyst submits the final report. 4. Once submitted, the Management Analyst will print the submitted copy of the final report to PDF. 5. Once in PDF form, the Management Analyst will add the following notes: a. Prepared By: [Name] b. Date and Time c. Reviewed By: [Name] d. Date and Time 6. With the "Prepared/Reviewed Note" added, it is now considered the "Finalized Report." 7. The Management Analyst will save an electronic copy of the Finalized Report along with copies of any supporting documentation and any email communications between the "Preparer" and the "Reviewer" to the QA records to be retained according to DLR Record Retention policies. 8. All RA Staff can access all finalized reports through the RA MS SharePoint site. Contact Person: Pauline Heier, Director, Reemployment Assistance Anticipated Completion Date: No anticipated completion date was listed in the separately issued audit report.

View Audit 306685

Finding 397975 (2023-004)

Material Weakness 2023

State of South Dakota

SD

Internal Control / Segregation of Duties Material Weakness Matching / Level of Effort / Earmarking

Finding No. 2023-004: Inadequate Controls over the Payment of Claims ...

Finding No. 2023-004: Inadequate Controls over the Payment of Claims Corrective Action Plan: The claim initiation duties have been separated from the claim approval responsibilities. When a claim is initiated in FACIS, that request can only be approved by someone with permissions to review and approve claims on the case. Reviewing and approving authorizations on the FACIS system can only be issued to an individual on CPS staff who does not have claim entry responsibilities. Payment is generated only after approval is completed. During the period audited, the FACIS system did not save information about which staff member had approved the claim. This left no record to verify the name and date for claim approvals. Contact Person: Jason Simmons, Chief Financial Officer, Department of Social Services Anticipated Completion Date: In state fiscal year 2024, FACIS was updated to fully document this information for later retrieval and review, essentially the implementation of this corrective action plan prior to the completion of DLA's audit; therefore, this finding has been corrected.

View Audit 306685

Finding 397972 (2023-002)

Significant Deficiency 2023

Memphis Area Legal Services, Inc.

TN

Internal Control / Segregation of Duties

MALS will update SOPs to ensure that time sheets are timely reviewed and approved by the relevant Managing Attorney/Supervisor in the Kemps Timekeeping Software. At a bi-weekly minimum, each Managing Attorney/Supervisor will send to the Director of Finance and Grant Compliance or the COO, an email r...

MALS will update SOPs to ensure that time sheets are timely reviewed and approved by the relevant Managing Attorney/Supervisor in the Kemps Timekeeping Software. At a bi-weekly minimum, each Managing Attorney/Supervisor will send to the Director of Finance and Grant Compliance or the COO, an email regarding the accuracy of the Kemps Timekeeping, confirming that the Managing Attorney/Supervisor has reviewed and approved the Time entered into the System.

View Audit 306682

Finding 397968 (2023-002)

Material Weakness 2023

The Harry and Jeanette Weinberg Terrace, Inc.

MD

HUD Housing Programs Cash Management Internal Control / Segregation of Duties

Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following ...

Project Legal Name: The Harry and Jeanette Weinberg Terrace, INC HUD Project No.: 502-EE015 Audit Firm: CohnReznick Period covered by the audit: Year end June 2023 Corrective Action Plan prepared by: Name: Shantay Hall Position: HUD Compliance Specialist Telephone Number: 571-307-6571 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding # 2023‐002; Section 202 Supportive Housing for the Elderly, Assistance Listing 14.157 a. Recommendation: Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. b. Action(s) Taken or Planned on the Finding The inspection was conducted under previous management. The Franklin Johnston Group took over July 1st, 2023. When the Franklin Johnston group took over, we were unable to get in contact with HUD for months to receive Confirmation wiring instructions. HUD requires Residual receipts to be remitted and deposited no later than the termination/renewal date. The Franklin Johnston group just received confirmation wiring instructions as of January 2024. Funds of $2,794.00 are now paid as of January of 2024. The Franklin Johnston Group will ensure that moving forward all residual receipts are to be remitted and expedited in a timely matter.

View Audit 306676

Finding 397955 (2023-001)

Significant Deficiency 2023

Youthbuild Lake County, INC

IL

Reporting Significant Deficiency Internal Control / Segregation of Duties § 200.512

There has been changes in our fiscal department that will allow YBLC, Inc to be on time with compliance

View Audit 306666

Finding 397950 (2023-002)

Significant Deficiency 2023

City of South Haven

MN

Internal Control / Segregation of Duties

Segregation of Duties. Name of Contact Person: Melissa Stenson, City Clerk. Correction Action: The finance related tasks will be separated as much as possible and alternative controls will be used to compensate for the lack of separation. The City Council will become more involved in providing so...

Segregation of Duties. Name of Contact Person: Melissa Stenson, City Clerk. Correction Action: The finance related tasks will be separated as much as possible and alternative controls will be used to compensate for the lack of separation. The City Council will become more involved in providing some of these controls. Proposed Completion Date: The City Council will implement the above procedures immediately.

View Audit 306665

Finding 397947 (2023-002)

Significant Deficiency 2023

Cla Homes I, Corp.

VA

HUD Housing Programs Internal Control / Segregation of Duties Special Tests & Provisions

2023-02 Special Test and Provisions - Replacement Reserve Federal agency: US Department of Housing and Urban Development AL number: 14.181, Supportive Housing for Persons with Disabilities Federal Award year: July 1, 2022, through June 30, 2023 Condition: The required $400 monthly deposit to the rep...

2023-02 Special Test and Provisions - Replacement Reserve Federal agency: US Department of Housing and Urban Development AL number: 14.181, Supportive Housing for Persons with Disabilities Federal Award year: July 1, 2022, through June 30, 2023 Condition: The required $400 monthly deposit to the replacement reserve account was not transferred monthly from January 2022 through August 2022. A catch-up transfer occurred in September 2022 to rectify the deficiency. Responsible persons: Susan Keenan, Executive Director and Monica Duggal, Project Manager Actions Taken: Corrective action has been taken, a catch-up transfer occurred on September 19, 2022, to rectify the deficiency and the Entity is up to date on its monthly deposits.

View Audit 306659

Finding 397877 (2023-001)

Material Weakness 2023

Accord

MN

Internal Control / Segregation of Duties Eligibility Subrecipient Monitoring § 200.303

Compliance and Controls over Compliance – Eligibility Home Investment Partnership Program, AL# 14.239 Material Weakness Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual performing...

Compliance and Controls over Compliance – Eligibility Home Investment Partnership Program, AL# 14.239 Material Weakness Accord did not have controls in place to ensure that eligibility criteria and rent calculations were being reviewed and/or approved by someone other than the individual performing the initial determination or annual reexamination. Actions Taken or Planned: Management agrees with this finding. As of December 31, 2023, the Organization has sold all properties financed by HOME funds. Contact Persons: Robert Pickering, Chief Financial Officer

View Audit 306612

Finding 397866 (2023-001)

Material Weakness 2023

Msad #27

ME

Questioned Costs Special Tests & Provisions Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN (Concerning Audit Finding 2023-001) Contact Person Responsible for Corrective Action: Lucie Tabor, Director of Finance Corrective Action: The Maine School Administrative District 27 will take the following actions to address finding 2023-001: As a Federal response to COVID-19,...

CORRECTIVE ACTION PLAN (Concerning Audit Finding 2023-001) Contact Person Responsible for Corrective Action: Lucie Tabor, Director of Finance Corrective Action: The Maine School Administrative District 27 will take the following actions to address finding 2023-001: As a Federal response to COVID-19, the Federal and State Governments provided grants to school districts to address the COVID-19 pandemic response for Schools. The CARES and ESSER Grants were initially distributed with a very short timeline on spending, initially by the end on December 2020, then subsequently extended to March 31 st and then extended beyond with additional Grants provided (ESSER I, 2 and ESSER ARP). This made for a very confusing and intense period to spend, track and coordinate spending and projects across three School Districts that the Valley Unified Education Service Center oversees. Also, the initial Grant that was provided to school Districts (CARES/ESSER I) were done so without clear directives from the Department of Education as to whether these were State Funds or Federal Funds . We were well under way with Committing and spending the funds before it was communicated that the initial funds were State funds (CARES), but subsequent ones were Federal Funds. By then, most of our projects were well under way and/or had been committed and we were now dealing with COVID-19 illnesses, remote school days, school shutdowns and delays/difficulties getting our products and contractors to pro vi de their services on the timeline we needed for the grants. These grants ran concurrently with one another and panned four Fiscal Years: 2020-21 , 2021-2022, 2022-2023 and 2023-2024. It is very rare that we have the opportunity to use Federal funds to address building or renovation projects for our school districts , so we have had no experience with the David Bacon prevailing wage requirement prior to these Federal fund , and therefore, this was not something on our radar at the time. Most of the Federal funding grants that we are used to (ESEA and Special Education) are spent on wages and purchases of materials and equipment, not projects of the scope that we were able to provide using ESSER Grant Funds. For any future projects requiring contractors, we will ensure that MSAD 27 provides the Davis Bacon requirement for prevailing wage rates including the information with the Request for Proposals or Bids (if applicable) and also with the contracts for the service once awarded. We will then ensure that the prevailing wage rates app licable to the contractor were paid to the workers (if applicable) prior to us paying the invoice to the contractor. Anticipated Compl etion Date: August 31 , 2024 to develop the policy and procedure for future Request for Propo als/ Bids that require the Davis Bacon prevailing wage rates.

View Audit 306609 Questioned Costs: $1

Finding 397858 (2023-001)

Significant Deficiency 2023

City of Weslaco

TX

Internal Control / Segregation of Duties Reporting Significant Deficiency § 200.328

The City will review the current procedures for maintaining documentation for when quarterly project and expenditures reports are completed, reviewed and submitted. Contact Person: Rosie Cavazos, CFO Proposed Implementation date: September 30, 2024

View Audit 306592

Finding 397721 (2023-002)

Significant Deficiency 2023

Breakthrough Phase Iii, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase III, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306573

Finding 397719 (2023-002)

Significant Deficiency 2023

Breakthrough Phase Ii, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from...

CORRECTIVE ACTION PLAN Breakthrough Phase II, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306572

Finding 397717 (2023-002)

Significant Deficiency 2023

Breakthrough Phase I, Inc.

TN

HUD Housing Programs Internal Control / Segregation of Duties

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from ...

CORRECTIVE ACTION PLAN Breakthrough Phase I, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2023. Purkey, Carter, Compton, Swann, & Carter, PLLC PO. Box 727 Morristown, Tennessee 37815 Audit period: July 1, 2022 —June 30, 2023 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS — FINANCIAL STATEMENT AUDIT None FINDINGS — FEDERAL AWARD PROGRAMS AUDITS FINDING N0. 2023-002: Ineffective operation of internal controls by management Management conducted recertifications of the Project’ 5 tenants; however, cannot locate any tenant ﬁles for the fiscal year under audit. Criteria: According to HUD Handbook 4350.3, owners must conduct a recertification of family income and composition at least annually by the tenant’s recertification anniversary date. Owners then must recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Owners must also keep all tenant ﬁle and recertiﬁcation documentation as required by HUD. Cause of Condition: Management did not have systems in place to ensure tenant ﬁles and recertiﬁcation documentation were kept in accordance with HUD requirements. Recommendation: Auditor recommends management review HUD Handbook 4350.3 and put proper internal controls in place to ensure tenant ﬁles are in compliance with HUD and kept in accordance with HUD requirements. Action Taken: Personnel at Breakthrough Corporation that are handling the operations of the Project have gone through HUD—related training and are working diligently to get the tenant files up to date and in accordance with HUD compliance.

View Audit 306570

Finding 397692 (2023-002)

Significant Deficiency 2023

Roof Above, Inc.

NC

Subrecipient Monitoring Reporting Significant Deficiency

Corrective Action Plan Significant Deficiency - Reporting Finding 2023-002 Roof Above will develop a policy for formal documentation of review of required reports prior to submission. Contact person responsible for corrective action: Kaedon Grinnell, Chief Program Officer Anticipated completion d...

Corrective Action Plan Significant Deficiency - Reporting Finding 2023-002 Roof Above will develop a policy for formal documentation of review of required reports prior to submission. Contact person responsible for corrective action: Kaedon Grinnell, Chief Program Officer Anticipated completion date: September 30, 2024

View Audit 306553

Finding 397578 (2023-082)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Material Weakness Reporting

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it performed procedures to safeguard against unnecessary utilization of care and services for the Medicaid program. Questioned Costs: Assistance Listing # 93.775 93....

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it performed procedures to safeguard against unnecessary utilization of care and services for the Medicaid program. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Authority does not concur with the auditor’s conclusion that it needs to update the state plan to include all methods and procedures used to safeguard against unnecessary utilization of care and services. The Authority has received written guidance from the Centers for Medicare & Medicaid Services (CMS) that it does not need to individually list the methods and procedures but rather complete the template document in the state plan and select from a list of applicable methods. CMS approved this portion of the state plan effective July 1, 2023. The Authority has adequate internal controls to ensure compliance with utilization control requirements and partially concurs with the auditor’s recommendation related to implementing and monitoring a statewide surveillance and utilization control program. The Authority recently updated the Fraud and Detection System (FADS) and is in the process of updating policies and procedures related to FADS operation and the statewide surveillance and utilization control program. The FADS system triggers alerts and judgmental sampling is used by staff to assess risk and determine follow-up procedures. The system is in its early implementation phase and the Authority is still in the process of establishing written criteria. The conditions noted in this finding were previously reported in findings 2022-061, 2021-050, 2020-047, 2020-048, 2019-052, 2019-053, and 2018-047. Completion Date: Estimated December 2024 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 306534

Finding 397577 (2023-081)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it periodically audited cost report data for rate setting, hospital billings, and other financial and statistical records for inpatient hospital services. Questioned Cos...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with requirements to ensure it periodically audited cost report data for rate setting, hospital billings, and other financial and statistical records for inpatient hospital services. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Health Care Authority partially concurs with the audit finding. The Authority does not audit inpatient hospital cost reports because it is not a federal requirement. The Authority has updated the Washington Administrative Code and its State Plan to align with federal regulations. The Authority partially concurs with the auditor’s assertion that it does not audit hospital and financial and statistical records. The Authority contracts for audits of Disproportionate Share Hospitals which includes roughly half of the hospitals in Washington. These audits include other financial and statistical records and meet this requirement. The auditor was provided information regarding these audits. The Authority will develop a desk audit process to review the financial statements of Washington hospitals, as necessary, and will create policies and procedures related to this process. The Authority does not concur with the auditor’s conclusion that it does not audit hospital billings or have methodology, policies, or procedures related to these audits. The Authority conducts utilization review and payment integrity audits of inpatient hospitals on an ongoing basis, which includes verification of billed charges. This information is well-documented and was provided to the auditor during the audit. The Authority will continue to formally document its internal controls over this compliance area. The conditions noted in this finding were previously reported in findings 2022-060, 2021-051, and 2020-049. Completion Date: Estimated October 2024 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 306534

Finding 397576 (2023-080)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Social and Health Services’ Aging and Long-Term Support Administration did not have adequate internal controls over and did not comply with requirements to ensure timely investigation of complaints of client abuse and neglect at Medicaid residential facilities. Questio...

Finding: The Department of Social and Health Services’ Aging and Long-Term Support Administration did not have adequate internal controls over and did not comply with requirements to ensure timely investigation of complaints of client abuse and neglect at Medicaid residential facilities. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department partially agrees with the finding. The Department agrees that it did not meet the Immediate Jeopardy and Non-Immediate Jeopardy complaint timelines due to the backlog created by the public health emergency and a 20 percent staff vacancy rate. The Department does not agree that it was due to lack of internal controls. Over the past two years, the Department had 30 new staff who were not certified to complete investigations independently; there were only three available trainers who spent the majority of their time in 2022 and early 2023 addressing training needs. Once staff completed the training and applied for certification, testing sites were limited resulting in staff having difficulty finding available testing slots. In late 2022, this process transitioned from in-person to virtual which provided greater opportunity for timelier certification. As of March 31, 2023, all staff have the required certification, and the training backlog has been resolved. As of February 2024, Immediate Jeopardy (2 days) complaints were completed on time. The Department implemented a procedure to review the status of intakes at the regional level monthly to ensure timelines continue to remain compliant for Immediate Jeopardy complaints. By June 2024, the Department will ensure Non-Immediate Jeopardy intakes are completed in a timely manner. Once the Department is in compliance with Non-Immediate Jeopardy complaints, the monthly review procedures will also be implemented. The conditions noted in this finding were previously reported in findings 2022-057 and 2021-054. Completion Date: Estimated June 2024 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

View Audit 306534

Finding 397575 (2023-079)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Social and Health Services, Aging and Long-Term Support Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid nursing homes. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 ...

Finding: The Department of Social and Health Services, Aging and Long-Term Support Administration, did not have adequate internal controls over and did not comply with survey requirements for Medicaid nursing homes. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department partially agrees with the finding. The Department agrees that it did not meet the Nursing Home Recertification Survey requirements, due to the backlog created by the public health emergency and a 20 percent staff vacancy rate. The Department does not agree that it was due to lack of internal controls. It was through applied internal controls that we identified the need to hire a contractor to assist with the recertification backlog to meet compliance requirements. As of March 2024, the Department met the 15.9-month recertification timeline. The 12.9-month statewide average is based on the overall average of months for all nursing home surveys, which included some of those surveys that were in a significant backlog due to the pandemic. Statistically, even when the state is meeting the 15.9-month timeframe for each home and lowering the number of months between surveys, it is expected that the bell curve average will take time to shift toward 12.9 months. The Department believes this will be achieved by January 2026. The conditions noted in this finding were previously reported in finding 2020-054. Completion Date: Estimated January 2026 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

View Audit 306534

Finding 397572 (2023-076)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure timely review of hospital complaints. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action in progre...

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure timely review of hospital complaints. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action in progress Corrective Action: The Department has a process to screen complaints for possible imminent danger and will evaluate current procedures to identify necessary changes to ensure initial screening dates are properly reflected for subsequent assessment and review. The Department will also strengthen internal controls to ensure our licensing and regulatory systems are sufficient in managing the process of handling all facilities complaints to capture the screening for imminent danger within two working days. Once that process is complete, the Department will perform quarterly audits to confirm and document that timely screening of complaints is taking place as required. The Department will also identify strategies to improve staffing challenges and stability. Completion Date: Estimated December 2024 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

View Audit 306534

Finding 397499 (2023-040)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it communicated federal award identification elements to subrecipients of the Aging Cluster Programs. Questioned Costs: Assistance Listing # 93.04...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it communicated federal award identification elements to subrecipients of the Aging Cluster Programs. Questioned Costs: Assistance Listing # 93.044 93.044 COVID-19 93.045 93.045 COVID-19 93.053 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. The Department receives Notices of Award (NOA) from the Administration of Community Living roughly three to four times per award in partial amounts. To reduce the time and effort it takes to issue subaward amendments to the 13 Area Agencies on Aging (AAA), the Department decided to post NOAs on the Department’s intranet used to communicate management bulletins and other documents to the AAAs to make the process more efficient. Unfortunately, the Department did not update subaward language to outline this change in the process. By August 2024, the Department will: • Include NOAs, with the required 14 federal identification elements, for each funding source in the initial subaward as an Exhibit D in the contracts. In addition, contract staff will ensure Exhibit D is attached to the initial subaward before the contracts are signed. • Add language to the subaward informing the AAAs that future NOAs will be posted on the Department’s intranet. Completion Date: Estimated August 2024 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

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Finding 397486 (2023-034)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with requirements to ensure it met the earmarking requirements for the Special Education program. Questioned Costs: Assistance Listing # 84.027 84.027 COVID-19 84.173 8...

Finding: The Office of Superintendent of Public Instruction did not have adequate internal controls over and did not comply with requirements to ensure it met the earmarking requirements for the Special Education program. Questioned Costs: Assistance Listing # 84.027 84.027 COVID-19 84.173 84.173 COVID-19 Amount $378,206 Status: Corrective action complete Corrective Action: When the Special Education program underwent a fiscal leadership transition in 2021, the incoming director identified necessary changes in agency procedures for closing out fiscal year (FY) 2021. The director and budget analyst have been maintaining weekly check-ins since May 2022 to discuss the implementation of proper internal controls. Beginning in FY 2023, the Office has fully implemented processes to ensure spending plans do not exceed the maximum allowable amounts earmarked for administration and other state-level activities. The updated procedures require the director of Operations and the budget analyst to perform the following: • Review criteria for spending plans at the beginning of the fiscal year. • Review the Grant Award Notice and Grants to States Summary Table and Preschool Grants to States Summary Table. • Review spending plans and update the maximum allowable amounts earmarked for administration and other state-level activities in the spending plan throughout the fiscal year. • Meet weekly to review spending plans and update plans as requests are received. • Review monthly expenditure reports during weekly meetings. These updated procedures have contributed to increased communication and partnership between the director of Operations and the budget analyst. These internal controls provide assurance that the Office will meet earmarking requirements and compliance with federal rules. The Office will consult with the federal grantor to discuss whether the questioned costs identified in the audit should be repaid. The conditions noted in this finding were previously reported in finding 2022-025. Completion Date: March 2024 Agency Contact: Tania May Assistant Superintendent, Special Education PO Box 47200 Olympia, WA 98504-7200 (360) 725-6075 Tania.may@k12.wa.us

View Audit 306534 Questioned Costs: $1

Finding 397463 (2023-085)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Health Care Authority did not have adequate internal controls over earmarking requirements for the Block Grants for Prevention and Treatment of Substance Abuse. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19 Amount $0 Status: Corrective action complete Correct...

Finding: The Health Care Authority did not have adequate internal controls over earmarking requirements for the Block Grants for Prevention and Treatment of Substance Abuse. Questioned Costs: Assistance Listing # 93.959 93.959 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: Monthly tracking workbooks are being completed and reviewed throughout the fiscal year. To address the audit recommendation, the Authority implemented formal communication for review of the monthly tracking workbooks and began maintaining documentation of the review in December 2022. The Authority is in compliance with the earmarking requirements of the program. No further procedural changes are needed. The conditions noted in this finding were previously reported in findings 2022-068 and 2021-056. Completion Date: December 2022 Agency Contact: William Sogge, CPA, CIA External Audit Liaison PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

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Finding 397461 (2023-083)

Significant Deficiency 2023

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure individuals are eligible to receive benefits for the Money Follows the Person program. Questioned Costs: Assistance Listing # 93.791 Amount $0 Status: Corrective action complete Correc...

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure individuals are eligible to receive benefits for the Money Follows the Person program. Questioned Costs: Assistance Listing # 93.791 Amount $0 Status: Corrective action complete Corrective Action: The Department partially agrees with the finding. The Department agrees that the Financial and Social Services Communication (14-443) forms were not provided to terminate the enrollment of the four exceptions identified in the finding. However, in those exceptions, the Roads to Community Living (RCL) disenrollment communication was made in accordance with the existing Nursing Facility Case Management policy as defined in Chapter 10 of the Long-Term Care (LTC) Manual. In addition, all clients met eligibility criteria for RCL services or were converted to another Home and Community Based program within the 365-day RCL demonstration year limitation. In these cases, the client was converted to a state plan or waiver with the new program start date noted on the 14-443 forms. The 14-443 form is a communication tool used by the Department’s public benefit specialists. For Modified Adjusted Gross Income (MAGI) enrolled Medicaid participants, benefits are managed by the Washington State Health Care Authority and the 14-443 form is not required or used by the Department’s public benefit specialists. This MAGI beneficiary communication detail was not articulated in the RCL chapter of the LTC Manual. As of May 2024, the Department updated Chapter 29 of the LTC Manual to clarify instructions related to when the 14-443 form must be completed for MAGI participants and what needs to be included on the form when it is required. Completion Date: May 2024 Agency Contact: Richard Meyer External Audit Compliance Manager PO Box 45804 Olympia, WA 98504-5804 (360) 664-6027 Richard.Meyer@dshs.wa.gov

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Finding 397453 (2023-073)

Material Weakness 2023

State of Washington C/o Office of Financial Management

WA

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

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective...

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: Completion Date: The Authority partially concurs with the finding. Audited financial reports: The Authority agrees it allowed Managed Care Organizations (MCO) to submit annual audited financial reports in accordance with Statutory Accounting Principles to be consistent with the standards used by the Washington State Office of the Insurance Commissioner. The Authority will amend contract language to require MCOs to submit audited financial reports prepared in accordance with Generally Accepted Accounting Principles and Generally Accepted Auditing Standards, in order to comply with federal requirements. The Managed Care Oversight Audit Plan details the scheduled audits and prioritizes the various required audits. Going forward, the audit plan will list more specific information regarding the requirements and these changes will be added to the strategic plan. Periodic audits: The Authority does not concur with the auditor’s opinion that periodic audits must be “conducted and fully complete” at least once every three years. The federal regulations found in 42 CFR §438.602 specifically states: “The State must periodically, but no less frequently than once every 3 years, conduct, or contract for the conduct of, an independent audit…”. The term “complete” is not included in the federal regulations. The Authority will reach out to the Centers for Medicare & Medicaid Services to confirm its interpretation of the regulation. The conditions noted in this finding were previously reported in findings 2022-054 and 2021-048. Estimated July 2024 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 45502 Olympia, WA 98504-5502 (360) 725-9586 Kari.Summerour@hca.wa.gov

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Corrective Action Plans

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