Corrective Action Plans

Finding 558975 (2024-001)

Material Weakness 2024

CA

Subrecipient Monitoring Material Weakness Reporting

Corrective Action: The City acknowledges the finding regarding noncompliance with the continuing loan monitoring requirements for the Community Development Block Grant (CDBG) Home Improvement Program. We recognize the importance of ensuring full compliance with all grant requirements to maintain the...

Corrective Action: The City acknowledges the finding regarding noncompliance with the continuing loan monitoring requirements for the Community Development Block Grant (CDBG) Home Improvement Program. We recognize the importance of ensuring full compliance with all grant requirements to maintain the integrity and effectiveness of the program. Training and Awareness: The City will provide comprehensive training to all relevant staff/consultants on the continuing loan monitoring requirements outlined in the LACDA grant agreement and CDBG program guidelines. Training sessions will be completed by June 30, 2026. Policy and Procedure Updates: The City will review and update its internal policies and procedures to clearly document the continuing loan monitoring process. A standardized compliance checklist and loan monitoring schedule will be developed to ensure consistent implementation across all loans. Loan Monitoring and Documentation: By June 30, 2026 the City will implement a regular schedule for evaluating outstanding loans, including, borrower compliance reviews, and follow-up actions where necessary. All monitoring activities will be fully documented and retained in each loan file. Ongoing Oversight: Management will assign a designated staff member/consultant responsible for overseeing the continuing loan compliance process, ensuring ongoing adherence to program requirements and addressing any issues promptly. The City is committed to strengthening internal controls, ensuring compliance with grant requirements, and maintaining the credibility of the Home Improvement Program. Proposed Completion Date: The corrective actions outlined above will be fully implemented by June 30, 2026.

View Audit 355203

Finding 558862 (2024-065)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Community Colleges of Spokane did not have adequate controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Status: Corrective action in progress Corrective Action: The College District will...

Finding: The Community Colleges of Spokane did not have adequate controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Status: Corrective action in progress Corrective Action: The College District will enhance our monthly financial reporting to include a unique identifier for monthly expenditures. Additionally, a report of expenditures procured by credit card will be attached to the regular financial report. The College District acknowledges the importance of clear documentation and tracking of the required training and meeting attendance by all Board of Trustees members and Policy Council members. Beginning in March 2025, the College District started providing additional methods and opportunities for new members to receive fiscal and governance training. To strengthen controls over program governance requirements and to demonstrate the commitment to continuous improvement of existing processes, the College District will further document training completion and the distribution of monthly financial information to all members. Completion Date: Estimated June 2025 Agency Contact: Linda McDermott Chief Financial Officer 501 N Riverpoint Blvd, PO Box 6000 Spokane, WA 99217-6000 (509) 434-5275 Linda.McDermott@ccs.spokane.edu

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Finding 558861 (2024-064)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: Skagit Valley College did not have adequate internal controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Amount $0 Status: Corrective action complete Corrective Action: The College has rev...

Finding: Skagit Valley College did not have adequate internal controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Amount $0 Status: Corrective action complete Corrective Action: The College has reviewed and strengthened current internal controls to ensure the Board receives the required financial and credit card statements monthly and that all new Board members receive training within the required 180 days. Financial reporting procedures The Head Start Program Director prepares monthly reporting to be available for inclusion in the monthly board packet, or as requested. In January 2025, the Procedures of Policy Council and Board Reporting were updated to ensure that required monthly reporting is provided to each governing body, regardless of whether there is a scheduled meeting for that month. This procedure became effective for the February 2025 Board of Trustees meeting. All financial reporting that was not previously provided to the Board of Trustees for the period covering July 1, 2023, through December 31, 2024, was transmitted on February 24, 2025. Board member training In January 2025, the Head Start Director provided the Board of Trustees an updated document on the program’s selection criteria and enrollment process. Additionally, the Head Start Board of Trustees Handbook, which has incorporated other training materials, was provided to each board member. The Head Start Director will conduct an annual review of the handbook content and update as appropriate to ensure training materials remain current. Completion Date: March 2025 Agency Contact: Mike Cogan VP of Administrative Services and CFO 2405 East College Way Mount Vernon, WA 98273-5899 (360) 899-2945 mike.cogan@skagit.edu

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Finding 558860 (2024-063)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Internal Control / Segregation of Duties Subrecipient Monitoring Eligibility

Finding: Edmonds College did not have adequate internal controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Status: Corrective action in progress Corrective Action: In response to the audit finding, ...

Finding: Edmonds College did not have adequate internal controls over and did not comply with program governance requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Status: Corrective action in progress Corrective Action: In response to the audit finding, the College will explore options for a Governing Body that complies with governance requirements for the Head Start program. By May 2025, the College will consult with its Assistant Attorney General to discuss the composition of a new Governing Body and will take the necessary steps to fully comply with federal regulations. By July 2025, the College will: • Establish a Governing Body that is compliant with requirements outlined in the Head Start Act to perform the required monthly review of financial and credit card statements, major financial expenditures, and any funding applications. • Ensure the Policy Council receives and approves the required financial and credit card statements each month. • Provide training to the new Governing Body and active members of the Policy Council within the required 180 days. Completion Date: Estimated July 2025 Agency Contact: Ginger Williams Head Start Executive Director 20816 44th Ave. W. Lynnwood, WA 98036-7744 (425) 550-3840 ginger.williams@edmonds.edu

View Audit 355165

Finding 558859 (2024-062)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: Edmonds College did not have adequate internal controls over and did not comply with protection of federal interest requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Amount $0 Status: Corrective action complete Corrective Action: In response ...

Finding: Edmonds College did not have adequate internal controls over and did not comply with protection of federal interest requirements for its Head Start program. Questioned Costs: Assistance Listing # 93.600 Amount $0 Status: Corrective action complete Corrective Action: In response to the audit finding, Edmonds College has completed the following: • Established a written protocol with the Department of Enterprise Services (DES) to ensure the Head Start Program Performance Standards 1303.46 is met in recording and posting federal interest. • Established internal controls to ensure college management monitor future work with DES to properly complete the Office of Head Start Lease Rider attachment in the lease agreements where federal funds are used to renovate leased property. Completion Date: February 2025 Agency Contact: Ginger Williams Head Start Executive Director 20816 44th Ave. W. Lynnwood, WA 98036-7744 (425) 550-3840 ginger.williams@edmonds.edu

View Audit 355165

Finding 558785 (2024-081)

Material Weakness 2024

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 93.7...

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 Status: Corrective action in progress Corrective Action: The Authority concurs with the finding and continues to develop and implement its statewide surveillance and utilization control program by: • Updating its Surveillance Utilization Review Subsystem policies and procedures. • Updating and documenting its statewide monitoring program. • Documenting its internal control program to ensure it complies with all utilization control requirements. The conditions noted in this finding were previously reported in findings 2023-082, 2022-061, 2021-050, 2020-047, 2020-048, 2019-052, 2019-053, and 2018-047. In fiscal year 2024, the State Auditor’s Office determined the Authority resolved findings 2020-047, 2020-048, 2019-052, 2019-053, and 2018-047. Completion Date: Estimated June 2026 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 42724 Olympia, WA 98504-2691 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 355165

Finding 558784 (2024-080)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Special Tests & Provisions Material Weakness

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 not taken Corrective Action: The Authority does not concur with the finding. The Authority maintains its internal controls are effective, and policies and procedures are compliant with federal requirements. Over the past four years, the Authority has taken corrective action on the prior audit findings including: • Consulted with the Centers for Medicare & Medicaid Services (CMS) for direction. • Updated Washington Administrative Code and the Revised Code of Washington to align with federal regulations. • Provided for the filing of cost reports and audited or contracted for the audit of the financial and statistical records of inpatient hospitals. CMS provided the Authority with technical guidance on two occasions, indicating it defers to the states on how these audits are defined. The Authority believes it has addressed the deficiencies identified in previous audits and no additional corrective action will be taken. The conditions noted in this finding were previously reported in findings 2023-081, 2022-060, 2021-051, and 2020-049. Completion Date: Not applicable Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 42724 Olympia, WA 98504-2691 (360) 725-9586 Kari.summerour@hca.wa.gov

View Audit 355165

Finding 558783 (2024-079)

Material Weakness 2024

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 9...

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 concurs with the finding. The Department was not able to meet the Nursing Home Recertification Survey requirements due to a backlog from prior years, not because of lack of internal controls. It was through applied internal controls that we identified concerns and were able to allocate resources to meet the most serious concerns. The Department made efforts in fiscal year 2023 and 2024 to address the backlog of complaints and recertification surveys, but resources had to be prioritized for new complaints. There is only one team that manages surveys, complaints, and revisits for the entire state. To optimize the use of resources, the Field Manager meets with the Administrative Assistant on a quarterly basis to review the 365-day average report and determine if survey schedules need to be modified to meet federal requirements To continue to address this audit issue, regional administrators have met with their Nursing Home teams to review survey scheduling for the year to ensure teams will be able to meet targeted survey completion dates and the required survey and recertification timeframes. By January 2026, the Department expects to meet compliance with the 15.9-month recertification survey timeline and the 12.9-month statewide average. The conditions noted in this finding were previously reported in findings 2023-079 and 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

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Finding 558782 (2024-078)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

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 intermediate care facilities. Questioned Costs: Assistance Listing # 93.775 93.777 93.777 C...

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 intermediate care 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 concurs with the finding. The Department was not able to meet the Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF-IID) survey requirements due to a backlog from prior years, not because of lack of internal controls. It was through applied internal controls that we identified concerns and were able to allocate resources to meet the most serious concerns. The Department made efforts in fiscal year 2023 and 2024 to address the backlog of complaints and recertification surveys, but resources had to be prioritized to handle new complaints. There is only one team that manages surveys, complaints, and revisits for the entire state. To optimize the use of resources, the Field Manager meets with the Administrative Assistant on a quarterly basis to review the 365-day average report and determine if survey schedules need to be modified to meet federal requirements. To continue to address this audit issue, regional administrators have met with their ICF/IID teams to review survey scheduling for the year to ensure teams will be able to meet targeted survey completion dates and the required recertification timeframes. By January 2026, the Department expects to meet compliance with the 15.9-month recertification survey timeline and the 12.9-month statewide average. The conditions noted in this finding were previously reported in findings 2023-078, 2020-053, 2019-061, 2018-052, 2017-042, 2016-037, 2015-045, and 2014-046. 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

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Finding 558781 (2024-077)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Special Tests & Provisions Matching / Level of Effort / Earmarking

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it referred all credible allegations of provider fraud to the state’s Medicaid Fraud Control Unit. Questioned Costs: Assistance Listing # 93.775 9...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it referred all credible allegations of provider fraud to the state’s Medicaid Fraud Control Unit. 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 and its contractor, Consumer Direct Care Network Washington (CDWA), identify potential and suspected provider fraud and refer fraud allegations with a potential loss of $1,000 or more to the Medicaid Fraud Control Unit (MFCU). Fraud referrals under $1,000 are all reviewed and tracked to enable repeat referrals to be identified and compiled to show a pattern of possible fraudulent behaviors. For cases under $1,000, CDWA completes provider education and training on billing standards, which will be documented and used to support any future referrals. The 15 cases identified in the audit finding that were not referred to MFCU were each under $1,000 of potential loss. Provider education was completed by CDWA, and the funds were returned to Medicaid. As of February 2025, the Department met with CDWA to discuss a revised process that will ensure compliance with MFCU requirements. In addition, the Medicaid Provider Fraud Referral form DSHS 12-210 was modified to include CDWA as an entity. By May 2025, the Department and CDWA will: • Revise and finalize existing procedures related to the referrals of all credible allegations of fraud to MFCU regardless of the amount of potential loss. • Request approval for the creation of a ticketing system for CDWA to submit provider fraud referrals directly into SharePoint. This will streamline the process, reduce workload, and help ensure compliance with MFCU requirements. Completion Date: Estimated May 2025 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 355165

Finding 558780 (2024-076)

Material Weakness 2024

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 complete ...

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 complete Corrective Action: The Department has a process in place to screen complaints for possible imminent danger. The Department has assessed and strengthened internal controls within the licensing and regulatory systems that are necessary to demonstrate compliance. The systems will properly reflect the accurate date of initial screening for imminent danger within two working days of receiving a complaint, as required by the Centers for Medicare and Medicaid Services State Operations Manual, and subsequent 21-day basic assessment and review timeline per internal policies. Additionally, the Department is performing quarterly audits to confirm and document that timely screening of complaints is taking place as required. The conditions noted in this finding were previously reported in finding 2023-076. Completion Date: August 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 355165

Finding 558727 (2024-029)

Significant Deficiency 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Material Weakness Reporting

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure it filed reports timely as required by the Federal Funding Accountability and Transparency Act. Questioned Costs: Assistance Listing # 93.044 93.044 COVID-19 93.045 93.045 COVID-19 93.053 ...

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure it filed reports timely as required by the Federal Funding Accountability and Transparency Act. Questioned Costs: Assistance Listing # 93.044 93.044 COVID-19 93.045 93.045 COVID-19 93.053 Amount $0 Status: Corrective action complete Corrective Action: The Department concurs with the finding. As of January 2024, the Department: • Created a subawards and amendments tracking spreadsheet with the required fields and contract information for reports required by the Federal Funding Accountability and Transparency Act (FFATA). • Assigned two fiscal staff to ensure FFATA reporting activities are submitted in the Federal Funding Accountability and Transparency Subaward Reporting System (FSRS). As of February 2024, the Department: • Ensured federal fiscal year 2024 funded contracts that were executed in December 2023 for the Office of Aging were entered in FSRS. • Added procedures for the Office Chief or designee to review the subawards and amendments tracking spreadsheet monthly for FFATA reporting to ensure federal deadlines are met consistently. As of March 2024, the Department collaborated with the Administration of Community Living and developed a plan to address the FFATA reporting backlog in state fiscal years 2022 and 2023 and ensured all FFATA reports were entered in FSRS for all previous years. The conditions noted in this finding were previously reported in finding 2023-039. Completion Date: March 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 355165

Finding 558689 (2024-075)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs Procurement, Suspension & Debarment Subrecipient Monitoring

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

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with federal provider eligibility requirements for the Medicaid and Children’s Health Insurance Program. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Amount $3,844,961 Status: Corrective action in progress Corrective Action: The Authority partially concurs with the finding. The Authority does not concur with the auditor’s assertion that two providers did not have a valid Core Provider Agreement on file. The Authority also does not concur that two new providers were enrolled without completion of a full enrollment screening. Corrective action has been in process to address revalidation issues from prior audits. As of January 1, 2024, the Authority implemented a system change moving the revalidation date to 90 days before the end of the five-year period. The Authority is revising existing procedures to strengthen internal controls over provider enrollment. Additional procedure implementation is also in progress to ensure high risk providers receive fingerprint-based background checks. Regarding the nursing facility revalidations, the Authority operates cooperatively under a written agreement with the Department of Social and Health Services (Department) who carry out the nursing facility licensing and revalidations. The Department stated: Effective May 2024, the Department updated the nursing facility revalidation process to require the Facilities Contract Specialist review the nursing facility revalidation monitoring spreadsheet monthly and that revalidation paperwork will be sent one year before the due date to ensure revalidation is done ahead of the 5-year period. In addition, the Department will consult with the Authority to determine if it is feasible to automate the revalidation notices. By December 31, 2025, Department contracts staff will verify that the Medicaid Provider Disclosure Statement forms are in the Management Operation Document Imaging System for all nursing facilities and that each form has been completed within the 5-year period. The conditions noted in this finding were previously reported in findings 2023-074, 2022-055, 2021-047, 2020-046, 2019-048, 2018-042, 2017-033, and 2016-035. Completion Date: Estimated December 2025 Agency Contact: William Sogge External Audit Compliance Specialist PO Box 45502 Olympia, WA 98504-5502 (360) 725-5110 william.sogge@hca.wa.gov

View Audit 355165 Questioned Costs: $1

Finding 558688 (2024-074)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

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

Finding: The Health Care Authority did not have adequate internal controls over and did not comply with managed care financial audit requirements. Questioned Costs: Assistance Listing # 93.767 93.767 COVID-19 93.775 93.777 93.777 COVID-19 93.778 93.778 COVID-19 Status: Corrective action complete Corrective Action: Audited financial reports: The Authority amended the managed care contract to require Managed Care Organizations to submit financial statements prepared in accordance with Generally Accepted Accounting Principles and Generally Accepted Auditing Standards. The amended contract requirement went into effect January 1, 2025. Periodic audits: The Authority implemented internal controls during state fiscal year 2024 to ensure periodic audits are completed within the required timeline. The conditions noted in this finding were previously reported in findings 2023-073, 2022-054, and 2021-048. Completion Date: June 2024 Agency Contact: Kari Summerour, CPA External Audit Compliance Manager PO Box 42724 Olympia, WA 98504-2691 (360) 725-9586 Kari.Summerour@hca.wa.gov

View Audit 355165

Finding 558665 (2024-071)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure Foster Care Maintenance payment rates were properly calculated. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective ...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure Foster Care Maintenance payment rates were properly calculated. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective action in progress Corrective Action: The Department concurs that policies and procedures related to rate setting for Foster Care maintenance payments are not currently established and is committed to strengthening internal controls and complying with federal requirements. In February 2025, the Department met with the State Auditor’s Office to gather an understanding of concerns and discuss how reasonable and allowable rates could be documented to ensure federal compliance. The Department will prioritize establishing written policies and procedures for setting payment rates to ensure maintenance payment rates only include allowable costs. Completion Date: Estimated July 2026 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 355165

Finding 558664 (2024-070)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Reporting Subrecipient Monitoring Material Weakness

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

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with reporting requirements for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective action complete Corrective Action: The Department is committed to strengthening internal controls and complying with grant requirements. As stated in the finding’s Cause of Condition, the Department did not follow the U.S. Department of Health and Human Services’ (HHS) published instructions. To address the auditor’s specific recommendations, the Department has: • Reviewed and updated all electronic versions of the quarterly crosswalks to align with HHS instructions. • Submitted a correction to the April 2025 quarterly report. The conditions noted in this finding were previously reported in findings 2023-069 and 2022-051. Completion Date: April 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 355165

Finding 558663 (2024-069)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Eligibility

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure a child is eligible and group care facility employees and adults residing in prospective caregivers’ households had cleared background checks before having unsupervised access to children. Q...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure a child is eligible and group care facility employees and adults residing in prospective caregivers’ households had cleared background checks before having unsupervised access to children. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective action complete Corrective Action: The Department is committed to strengthening internal controls and complying with grant requirements. For the specific exceptions identified in the finding, the Department has taken the following actions: Individuals: • Updated the source of funds in the FamLink application for the child identified in the audit exception to ensure future payments would be made with state funds. • Researched all payments made on behalf of the child and returned the federal portion to the grantor. • Updated the peer review process to ensure that a sample of cases are reviewed quarterly and all documentation is properly retained. Background Checks: • In January 2024, the Department increased its use of National Crime Information Center (NCIC) background checks to ensure all individuals required to complete fingerprint-based checks are compliant prior to a child’s placement. • The Department continues to use the Plan, Do, Check, Act (continuous quality improvement process) to communicate changes and provide additional training to staff as needed to ensure compliance with the background check requirement. The conditions noted in this finding were previously reported in findings 2023-068 and 2022-050. Completion Date: January 2024 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 355165 Questioned Costs: $1

Finding 558661 (2024-067)

Significant Deficiency 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure monthly foster care maintenance payments to children’s caregivers were adequate and accurate for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Sta...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure monthly foster care maintenance payments to children’s caregivers were adequate and accurate for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective action complete Corrective Action: The Department is committed to strengthening internal controls and complying with grant requirements. As stated in the finding’s Cause of Condition, the Department did not fully implement the prior year’s corrective action plan during the audit period and did not have the reporting capabilities to track rate setting reviews for the entire audit period. To strengthen internal controls and documentation, and as part of the implementation of the new rate assessment process, the Department took the following corrective actions: • Published a new report in FamLink to assist rate assessors in identifying: o Six-month reviews that have not been performed timely. o Cases with upcoming rate assessments and due dates for reviews. • Implemented monthly tracking by supervisors to assist with internal controls and compliance. The Department continues to use the Plan, Do, Check, Act (continuous quality improvement process) to improve the accuracy of the new reports and provide additional training to staff as needed to ensure compliance with the requirement of performing six-month reviews of the reimbursement rates. The conditions noted in this finding were previously reported in finding 2023-067. Completion Date: June 2024 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 355165

Finding 558660 (2024-066)

Significant Deficiency 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to providers for travel and family visits were allowable and adequately supported for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Statu...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls to ensure payments to providers for travel and family visits were allowable and adequately supported for the Foster Care program. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Status: Corrective action in progress Corrective Action: The Department is committed to strengthening internal controls and complying with grant requirements. In response to the prior year audit finding, the Department has taken the following actions: • Between April and December 2023: o Filled two vacant contract staff positions dedicated to reviewing child welfare contracts to include family time visit payments. o Developed compliance audit plans for child welfare contracts and began fiscal monitoring of family time visit payments. o Implemented a new process for creating Sprout invoices from family time activity data to include the following:  Utilizing algorithms to identify reimbursements outside of reasonable amounts.  Requiring providers to submit additional documentation or explanation for flagged invoices.  Identifying duplicate billings using a re-run process.  Performing additional review and approval of invoices of the Network Administrator in Eastern Washington prior to release of payment. • Between January and March 2024: o Identified and implemented regional program approvals for Western Washington providers. o Implemented fiscal monitoring controls to ensure payments to providers for travel and family visits are allowable and adequately supported. o Utilized the Plan, Do, Check, Act (continuous quality improvement process) to add additional steps to the process to ensure payments were accurate. In response to the State Auditor’s Office (SAO) recommendations, the Department will: • Reconcile the identified payment exceptions and take appropriate action. • Review the implemented invoice and payment process and update training resources as needed. • Refine the compliance audit plans and update documentation for the contract monitoring process to ensure that SAO can review documentation for monitoring tasks completed. The conditions noted in this finding were previously reported in findings 2023-066, 2022-048, and 2021-040. Completion Date: Estimated July 2025 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

View Audit 355165 Questioned Costs: $1

Finding 558642 (2024-048)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Refugee and Entrant Assistance programs received required single audits, and that it followed up on findings and issued mana...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Refugee and Entrant Assistance programs received required single audits, and that it followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.566 Amount $0 Status: Corrective action in progress Corrective Action: The Department partially concurs with the auditor’s findings. The Department’s Office of Refugee and Immigrant Assistance (ORIA) has taken corrective actions to strengthen controls over subrecipient monitoring. During the fiscal year, the program verified each subrecipient’s total federal financial assistance through online tax forms and determined if a single audit report is required. For subrecipients that met the single audit threshold, ORIA either received the single audit report from the subrecipient or accessed the Federal Audit Clearinghouse database to obtain a copy. However, the Department did not issue management decisions when applicable. By May 2025, the Department will work with the Division of Finance and Financial Resources (DFFR) to review all subrecipients’ single audit reports for state fiscal year 2024. Any audit findings related to activities funded by ORIA awards will be identified for necessary actions. By June 2025, as applicable, the Department will issue management decision letters for the findings outlining the determination of the effectiveness of the subrecipient’s proposed corrective action to address findings. By July 2025, the Department will: • Work with DFFR to implement effective internal controls and develop written procedures to ensure subrecipients receive required single audits; and to issue written management decisions as needed. • Monitor subrecipients’ corrective actions for findings received to ensure they are completed. The conditions noted in this finding were previously reported in finding 2023-053. Completion Date: Estimated July 2025 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 558637 (2024-043)

Significant Deficiency 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Eligibility Matching / Level of Effort / Earmarking

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over eligibility requirements for child care services paid with the Child Care and Development Fund and Temporary Assistance for Needy Families funds. Questioned Costs: Assistance Listing # 93.55...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over eligibility requirements for child care services paid with the Child Care and Development Fund and Temporary Assistance for Needy Families funds. Questioned Costs: Assistance Listing # 93.558 93.575 93.575 COVID-19 93.596 Amount $0 Status: Corrective action complete Corrective Action: In response to prior audit findings, the Department developed a corrective action plan to address the internal control deficiencies. This finding was issued due to the corrective action plan not being fully implemented during the audit period. To address the prior years’ eligibility audit findings, the Department has taken the following actions: • As of April 2024, conducted a root cause analysis of internal audit findings, particularly for cases with errors due to household composition and approved activities, and updated the desk aid with corrective actions identified. • As of May 2024: o Improved and published the desk aid outlining simplified eligibility determination process that includes procedures for those families who do not have an approved activity. o Developed updated household composition training for all staff as part of core childcare training. The Department will continue to partner with the Administration for Children and Families and follow our program integrity plan. The conditions noted in this finding were previously reported in findings 2023-059, 2022-036, 2021-035, 2020-039, 2019-032, 2018-030, 2017-026, 2016-023, 2015-026, 2014-026, 2013-017, and 12-30. Completion Date: May 2024 Agency Contact: Stefanie Niemela Audit Liaison PO Box 40970 Olympia, WA 98504-0970 (360) 725-4402 stefanie.niemela@dcyf.wa.gov

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Finding 558627 (2024-039)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases Program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $0 Status: Correc...

Finding: The Department of Health did not have adequate internal controls over and did not comply with reporting requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases Program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has taken steps to implement a process for reviewing reporting entries to ensure accuracy and compliance with reporting requirements. To improve efficiency in the reporting process, program fiscal staff have revised internal expenditure reports to eliminate irrelevant or unnecessary grants for reporting purposes. This will decrease workload, reduce the possibility of errors, and save time on both entering and reviewing data. Additionally, user-friendly enhancements to the Centers for Disease Control and Prevention systems with improved accessibility of spending data has enabled the Department to more effectively identify data entry errors. The conditions noted in this finding were previously reported in finding 2023-048 and 2022-034. Completion Date: February 2025 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

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Finding 558615 (2024-035)

Significant Deficiency 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Health did not have adequate internal controls to ensure providers maintained immunization records, control, accountability and safeguarding of vaccines for the Immunization Cooperative Agreements Program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-...

Finding: The Department of Health did not have adequate internal controls to ensure providers maintained immunization records, control, accountability and safeguarding of vaccines for the Immunization Cooperative Agreements Program. Questioned Costs: Assistance Listing # 93.268 93.268 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has already taken steps to evaluate current processes to ensure providers maintain immunization records, control, accountability and safeguarding of vaccines for the Immunization Program. As of July 2024, the program implemented a more automated process in the RedCap system to identify the vaccine doses administered outside the age range (DOAR) activities. This process enables adequate reviews and follow up with providers to be performed for the DOAR reports. As of November 2024, the site visit coordinator began the process of closely monitoring site visits due in one month and reaching out to the regional representatives to determine the status of scheduling site visits in order to minimize delays. The Department will continue to conduct monthly site visits and outreach and follow internal policies and procedures to meet DOAR reporting requirements. Completion Date: November 2024 Agency Contact: Jeff Arbuckle External Audit Manager PO Box 47890 Olympia, WA 98504-7890 (360) 701-0798 Jeff.Arbuckle@doh.wa.gov

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Finding 558478 (2024-019)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting § 200.303

Finding: The Department of Commerce did not have adequate internal controls to ensure payments to subrecipients were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.0...

Finding: The Department of Commerce did not have adequate internal controls to ensure payments to subrecipients were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Questioned Costs: Assistance Listing # 21.027 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department maintains that there are effective internal controls over programs that are funded by the Coronavirus State and Local Fiscal Recovery Funds. Due to delayed audit planning and scoping, the auditors were unable to perform procedures to ascertain whether the Department established and followed internal controls to ensure compliance with program requirements. The Department plans to ensure sufficient time and resources are available for all future audits by performing the following steps: • Performing outreach to all federal programs to document internal controls for all applicable compliance requirements before the start of the next single audit cycle. • Working with the State Auditor’s Office earlier in the audit cycle to identify the audit scope for selected programs. • Providing support and guidance to programs selected for audit to ensure compliance with all internal controls and compliance requirements. The conditions noted in this finding were previously reported in findings 2023-027, 2023-028, and 2022-019. Completion Date: Estimated August 2025 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

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Finding 558477 (2024-018)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action complete Corrective Ac...

Finding: The Housing Finance Commission did not have adequate internal controls over and did not comply with reporting requirements for the Homeowner Assistance Fund program. Questioned Costs: Assistance Listing # 21.026 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: To address the deficiencies identified by the auditors in completing quarterly performance reports, the Commission has taken the following corrective actions to strengthen controls over reporting for the Homeowner Assistance Fund (HAF) program: • Updated procedures to require: o Homeownership Division and Finance Division staff to perform regular reconciliation of records to identify any discrepancies and to ensure all records are complete and accurate. o Supporting data obtained for reporting be vetted by the contractor and the Homeownership Division staff. o Leadership (division manager or above) to perform final review of data as well as the quarterly or annual report prior to submission to the grantor. • Designated the records maintained by the Finance Division, specifically the general ledgers, as the source of financial data for the quarterly and annual reports for the Washington HAF program. • Required third parties to develop or update a program manual regarding data used for reporting purposes. The manual incorporated recommendations of the audit finding. As of June 30, 2024, the Commission consulted with the U.S. Department of the Treasury to determine if revision and resubmission of the reports are necessary to correct amounts reported. No corrective action was required. The conditions noted in this finding were previously reported in finding 2023-024. Completion Date: June 2024 Agency Contact: Lucas Loranger Senior Finance Director 1000 Second Ave, Suite 2700 Seattle, WA 98104-3601 (206) 464-7139 Lucas.Loranger@wshfc.org

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Corrective Action Plans

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