State of Missouri
Single Audit
Corrective Action Plan
Year Ended June 30, 2023
State Agency: Department of Health and Senior Services
Audit Finding Number: 2023-012 CACFP Subrecipient Reimbursements
Name of the contact person responsible for corrective action: Sarah Walker, Bureau Chief
An...
State of Missouri
Single Audit
Corrective Action Plan
Year Ended June 30, 2023
State Agency: Department of Health and Senior Services
Audit Finding Number: 2023-012 CACFP Subrecipient Reimbursements
Name of the contact person responsible for corrective action: Sarah Walker, Bureau Chief
Anticipated completion date for corrective action:
The agency does not agree with the audit findings or believes that corrective action is not required. Explanation and specific reasons are as follows:
CACFP Subrecipient Reimbursements
DHSS disagrees. The DHSS through BCFNA maintains a strong system of internal controls over meal reimbursements to CACFP facilities/sponsors to ensure costs are allowable and supported. The system is in compliance with Uniform Guidance and USDA program requirements. The system includes subrecipient monitoring based on risk assessments per the substance and spirit of Uniform Guidance, initial and ongoing training and technical assistance opportunities, and reviews of invoices.
Throughout the SAO’s finding they repeatedly acknowledge that the BCFNA monitoring process is in compliance with Nutritionist Manual which is based on USDA requirements, but is somehow not in compliance with broader federal requirements. This goes against the accepted hierarchy of federal compliance guidance which says that 2 CFR 200 Uniform Grant Guidance is broader and less specific than the higher ranking requirements set forth by specific federal grant funders and awards. The SAO has not noted any specific noncompliance with federal requirements regarding subrecipient monitoring. The SAO’s finding noted the DHSS could enhance or improve its process but not that it is out of compliance with federal requirements for subrecipient monitoring. The SAO is trying to hold DHSS to a higher standard than what is federally required.
The DHSS’ strong system of internal controls which is documented in the Nutritionist Manual is in compliance with federal regulations and is used as a best practice by the USDA for other states. The report from the most recent USDA Management Evaluation Report for Fiscal Year 2023 issued November 2023 stated “The FNS determined that the SA Monitoring of Sponsors and SA Oversight of Sponsor Monitoring’s has adequate management controls in place for administering the CACFP in accordance with Federal regulations. The FNS staff reviewed SA practices that included detailed SA review forms, spreadsheets that provided extra oversight, and written procedures detailing the monitoring process. The SA provides online CACFP trainings along with a handbook to institutions that detail policies and procedures governed by the SA. The SA developed an extensive tracking system in addition to a very thorough review tool that contains meal component and pattern calculation. The SA conducts oversight of the review process and tracks each step to confirm completion of any follow up required of institution. The SA CACFP training resources and online modules were reviewed and evaluated to ensure it contained the correct information and up to date policies and procedures. The FNS staff reviewed the SA policies and procedures and interviewed key SA staff regarding procedures for each respective area of this Section. All files reviewed are compliant with Program requirements. The FY 2023 CACFP ME review did not identify any significant reportable issues.”
This entitlement program provides reimbursements for nutritious meals and snacks to organizations that serve eligible children and adults. CACFP processes an average of 700 claims per month and provided healthy meals in Missouri to over 31 million children and adults in 2023. The increased claim testing and recoupment suggested by the SAO would create a significant barrier to participation for sponsors/facilities (many of which are small child care centers, day care homes, emergency shelters and adult day care centers) which is prohibited by USDA.
Reviewing supporting documentation with every individual reimbursement claim at the time of submission as suggested in the finding is not feasible given the number of reimbursement claims processed monthly by program staff already functioning at capacity. Neither is it required by Uniform Guidance, the USDA or standard subrecipient monitoring procedures. The BCFNA already requires claims to be paid on a reimbursement basis rather than in advance and performs various reviews of the claims in CNPWeb, so the additional step of requiring supporting documentation with every reimbursement claim at the time of submission is unnecessary and is intended as a specific condition to remedy high risk subrecipients per 2 CFR 200.208. Furthermore, BCFNA offers technical assistance training and reviews in addition to regular monitoring reviews.
In addition to the edit checks within the CNPWeb system which validate such things as capacity limits and licensing, BCFNA staff has, and continues to perform, additional verification such as spot-checks for inconsistencies (i.e. a greater number of enrolled participants as compared to licensed or total capacity or suspicious claim irregularities or patterns). Each claim submitted also requires a certification of truthfulness, accuracy, completeness with potential criminal, civil or administrative penalties in accordance with U.S. Code Title 18, Section 1001 and Title 31, Sections 3729-3730 and 3801-3812. As noted by the SAO, the risk based monitoring approach implemented by BCFNA has been effective in identifying significant issues and claim errors in recent years.
The USDA established an acceptable level of risk with respect to the CACFP program and provided approved risk management processes and requirements. DHSS disagrees with the methodology the SAO used in its calculations. Out of the SAO’s test sample of 60 monitoring reviews, only 9 of the overclaims were over the $600 threshold of acceptable risk set by the USDA. 7 CFR 226.8(f): In conducting management evaluations, reviews, or audits in a fiscal year, the State agency, FNS, or OIG may disregard an overpayment if the overpayment does not exceed $600. A State agency may establish, through State law, regulation or procedure, an alternate disregard threshold that does not exceed $600. The SAO left the inflated error percentage in the body of the finding despite repeated requests and only included the lower suggested rates in footnote 4. The SAO also did not explain how their test of monitoring reviews performed by BCFNA, instead of a sample of claims submitted, was representative of CACFP reimbursements that would lend to projecting to the total population.
BCFNA monitors using a risk-based approach as required and in response to known erroneous claims and to proactively address issues. A sample of monitoring reviews is proportionally more likely to include a higher number of claims with discrepancies. For example, fifty five percent of the monitoring reviews completed during fiscal year 2023 were graded as a B or C and were give additional technical assistance and/or monitoring follow up as a result.