Corrective Action Plans

Finding 558684 (2024-072)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs Period of Performance Subrecipient Monitoring

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to providers were allowable and properly supported for the Social Services Block Grant. Questioned Costs: Assistance Listing # 93.667 ...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to providers were allowable and properly supported for the Social Services Block Grant. Questioned Costs: Assistance Listing # 93.667 Amount $9,098,747 Status: Corrective action in progress Corrective Action: The Department maintains that funds were not improperly charged or reported for the Social Services Block Grant (SSBG) program. The Department implemented grant-level management of all federal funds, including the SSBG program. This process consists of making grant-level adjustments between allowable grant sources to properly spend grant funds within the allowable period of performance and ensure level of effort and matching requirements are met. The Department allocated the SSBG funds to eligible clients and allowable activities in compliance with 45 CFR 98.67 but did not include the level of data recommended by the State Auditor’s Office (SAO) for some transfers. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. The enacted budget included funding to implement the Department’s budget request beginning July 1, 2024. The Department is working with a developer to assist with building out the required databases between the Social Service Payment System and the Agency Financial Reporting System to allow transfers between funding sources to include transaction level data related to the expenditures. The Department is committed to collaborating with SAO to determine an appropriate methodology which identifies a sampling unit that can be used to accurately test compliance. The Department looks forward to working with SAO to resolve the data concerns in the audit of the SSBG program. The conditions noted in this finding were previously reported in finding 2023-070. Completion Date: Estimated December 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 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

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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

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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 558662 (2024-068)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Children, Youth, and Families did not have adequate controls over and did not comply with certain requirements of its Public Assistance Cost Allocation Plan. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complet...

Finding: The Department of Children, Youth, and Families did not have adequate controls over and did not comply with certain requirements of its Public Assistance Cost Allocation Plan. Questioned Costs: Assistance Listing # 93.658 93.658 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department concurs with the finding and is committed to improving internal controls. The Department did not have adequate staffing levels to maintain the business processes for one monthly workbook for the Public Assistance Cost Allocation Plan. The Department was not able to complete the August 2023 workbook for cost base 100 (administrative charges) due to competing state and federal fiscal year close deadlines. Available staff were focused on grant reconciliations and closing out the prior fiscal year financial transactions. The Department has reviewed the base edit form written procedures with staff and added monthly reminders for the Cost Allocation and Grants Management Unit. In addition, the Department has confirmed that to date all cost base 100 workbooks have been properly completed for the state fiscal year 2025. The conditions noted in this finding were previously reported in findings 2023-065 and 2022-047. Completion Date: March 2025 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 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

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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 558652 (2024-055)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Allowable Costs / Cost Principles

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Low Income Home Energy Assistance program received required single audits, and that it appropriately followed up on findings and issued manage...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subrecipients of the Low Income Home Energy Assistance program received required single audits, and that it appropriately followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Status: Corrective action in progress Corrective Action: In October 2024, the Department’s Internal Control Office hired two additional staff with one dedicated to ensuring the requirements in 2 CFR 200.501 are followed. The Internal Control Office will complete the following processes to ensure compliance with subrecipient monitoring requirements of all Low-Income Home Energy Assistance Program (LIHEAP) awards: • Obtain the subaward population from program management. • Issue management decision letters to all program subrecipients who receive LIHEAP findings. • Work with program management to conduct outreach for subrecipients who have not met the audit reporting deadline. • Document non-responsive subrecipients not in compliance with the reporting requirement and notify program management. Completion Date: Estimated September 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 558651 (2024-054)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Procurement, Suspension & Debarment

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subawards for the Low-Income Home Energy Assistance Program are clearly identified as subawards. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with federal requirements to ensure subawards for the Low-Income Home Energy Assistance Program are clearly identified as subawards. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $0 Status: Corrective action complete Corrective Action: The Department has two programs that administer and award Low-Income Home Energy Assistance Program (LIHEAP) funds: the Energy Assistance program and the Weatherization program. The Energy Assistance program implemented a plan to improve the documentation and communication regarding required federal award identification elements to ensure compliance with 2 CFR 200.332 Requirements for Pass-Through Entities. The plan includes the following steps: • The appropriate contract template is selected, and program staff properly identify recipient type as “contractor” or “subrecipient”. • The Federal Award Identification Number is included on each contract face sheet, information sheet, section one, and the contract special terms and conditions. • The LIHEAP Commerce Specialist enters the required information, which is reviewed and verified by the LIHEAP Program Manager and the Community and Economic Opportunities Managing Director before contract execution. The program ensures all federal requirements for pass-through entities are included in the contract or in a separate document as part of the subaward. This process has already been implemented in current contracts. The conditions noted in this finding were previously reported in finding 2023-056. Completion Date: February 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 558650 (2024-053)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Reporting

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $0 Status: Corrective action in progress ...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Low-Income Home Energy Assistance Program (LIHEAP) staff will work with the Financial Services Division staff to enhance and improve internal controls and ensure accurate reporting which will include the following: • Budget staff will review and approve the SF-425 federal financial reports, the Carryover and Reallotment Report, and the Grantee Survey Section 1 for completeness and accuracy prior to submission to the program for entry into the federal reporting system. • Budget and accounting staff will ensure Module 1 of the LIHEAP Performance Data Form reconciles to the amounts reported on both the Carryover and Reallotment and the SF-425 reports to prevent reporting inconsistencies. • LIHEAP Energy and Weatherization staff will coordinate activities between their programs to include: o Completing a memorandum of understanding outlining reporting requirements and timelines. o Scheduling time to attend training on reporting timelines and data accuracy requirements. o Tracking data on weatherization obligations, households served, and expenditures for required federal reporting. The Department’s information technology (IT) staff completed system updates to correct identified issues and ensure alignment with the federal reporting guidelines. IT staff will continue to monitor and refine data processes to improve accuracy and consistency. The conditions noted in this finding were previously reported in findings 2023-055, 2022-039, and 2021-032. 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 558649 (2024-052)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $0 Stat...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department is in the process of implementing procedures to strengthen internal controls and ensure compliance with the Federal Funding Accountability and Transparency Act (FFATA) reporting requirements. The Department will review and update procedures to improve data entry accuracy for FFATA reporting. Additional internal controls will be implemented to strengthen the reporting process, which will include: • Establishing a verification process for budget staff to review and approve award letters and funding allocation before issuing subawards and completing FFATA reporting. • Implementing a process to ensure each subaward and amendment is entered separately into the reporting system by the federal deadline. • Completing a secondary review by budget staff to verify financial accuracy before submission in the reporting system by the Program Manager. • Developing a standard procedure for retaining copies of completed reports. The FFATA subaward reporting has recently transitioned to SAM.gov. The Department will establish a procedural review for the account migration to ensure appropriate user access is maintained. The Department will review the FFATA procedures annually to ensure compliance with current federal requirements. 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 558648 (2024-051)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Internal Control / Segregation of Duties

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Status: Corrective action in progress Corrective...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with reporting requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Status: Corrective action in progress Corrective Action: In response to the finding for the Low-Income Home Energy Assistance Program (LIHEAP), program staff, Community Economic Opportunities Unit leadership, and division budget staff collaborated to co-design and implement a robust procedure for completing future Carryover and Reallotment Reports. This new process was developed through a series of collaborative planning sessions that emphasized clarity in roles and responsibilities and a commitment to ensuring accuracy. Specific steps included: • Defining clear roles and responsibilities for each staff member involved in the preparation, review, and submission of the report. This ensures that every individual understands their tasks and deadlines, minimizing the risk of errors or delays. • Establishing a multi-step review process to validate data accuracy and ensure compliance with federal reporting requirements. This includes peer reviews before final submission. • Creating a process timeline with milestone dates for data collection, review, and submission to guarantee timely completion of the report. Integrating these measures into the program's operations allows the Department to strengthen its internal controls and ensure compliance with LIHEAP reporting requirements. The new process will enable timely, accurate, and efficient reporting, aligning with the expectations of the Department of Health and Human Services, Office of Community Services. The Department will consult with the federal grantor to determine if it should revise and resubmit the report. 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 558647 (2024-050)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with period of performance requirements for the Low-Income Home Energy Assistance program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $4,409,760 Status: Corrective ...

Finding: The Department of Commerce did not have adequate internal controls over and did not comply with period of performance requirements for the Low-Income Home Energy Assistance program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $4,409,760 Status: Corrective action in progress Corrective Action: The Department will review and strengthen its policies and internal controls to ensure compliance with the Low-Income Home Energy Assistance Program (LIHEAP) period of performance requirements. This includes: • Implementing additional checks to verify that all expenditures are incurred within the award’s period of performance. • Providing additional training to staff on the period of performance requirements to prevent future misinterpretations. As part of the corrective action, the program has implemented the following changes: • For the 2024 and 2025 program years for LIHEAP awards, all subrecipient contracts were issued with a two-year period of performance to avoid new expenses being added to the closeout year. • Ensured that all new subrecipient contracts align with the Department’s updated internal approach. Based on the recommendation in the audit finding, the Department will consult with the grantor regarding the questioned costs identified in the audit. Completion Date: Estimated October 2025 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.wa.gov

View Audit 355165 Questioned Costs: $1

Finding 558646 (2024-049)

None 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles

Finding: The Department of Commerce improperly charged $492,317 to earmarking requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $492,317 Status: Corrective action in progress Corrective Action: The Depart...

Finding: The Department of Commerce improperly charged $492,317 to earmarking requirements for the Low-Income Home Energy Assistance Program. Questioned Costs: Assistance Listing # 93.568 93.568 COVID-19 Amount $492,317 Status: Corrective action in progress Corrective Action: The Department is committed to maintaining compliance with federal guidelines and demonstrating our accountability in managing public funds. In response to the audit finding, the Low-Income Home Energy Assistance Program staff have completed the following: • Coordinated efforts with budget staff to verify the amounts expended and the deficiency reported. • Reviewed budget formulas used to calculate the required earmark as it relates to total funds expended. The Program will continue to: • Perform a thorough review of financial records, reconciliations, and adjustments to budgeting procedures to prevent future occurrences. • Implement enhanced internal controls and monitoring processes to ensure accurate budgeting and reporting of earmarked funds. The program will consult with the United States Department of Health and Human Services to seek guidance on the questioned costs. Completion Date: Estimated July 2025 Agency Contact: Gena Allen, CFE Internal Control Officer PO Box 42525 Olympia, WA 98504-2525 (360) 480-5149 Gena.Allen@Commerce.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 558641 (2024-047)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to perform fiscal and program monitoring of subrecipients for the Refugee and Entrant Assistance programs. Questioned Costs: Assistance Listing # 93...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with federal requirements to perform fiscal and program monitoring of subrecipients for the Refugee and Entrant Assistance programs. Questioned Costs: Assistance Listing # 93.566 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. 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 monitored some of their subrecipients, but did not have monitoring reports as documentation of the review. Since the program determined these subrecipients to be low risk, monitoring consisted of a desk review which was documented only on the monitoring screen of the Agency Contracts Database. By June 2025, the Department will: • Work with the Division of Finance and Financial Resources (DFFR) to develop and implement effective internal controls and clear written procedures covering program and fiscal subrecipient monitoring requirements. ORIA will train all staff responsible for subrecipient monitoring on the newly established internal controls and written procedures. • ORIA and DFFR will explore the Department’s ability to increase staff resources. By August 2025, the Department will develop a risk assessment with the required elements and have additional risk factors outlined in the Department policy. By October 2025, the Department will: • Complete the updated risk assessments for all contracts. • Update monitoring plans and activities to align with updated risk levels. The conditions noted in this finding were previously reported in finding 2023-054. Completion Date: Estimated October 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 558640 (2024-046)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act for the Refugee and Entrant Assistance program. Questioned Costs:...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure it filed reports required by the Federal Funding Accountability and Transparency Act for the Refugee and Entrant Assistance program. Questioned Costs: Assistance Listing # 93.566 Amount $0 Status: Corrective action in progress Corrective Action: The Department concurs with the finding. The Department’s Office of Refugee and Immigrant Assistance (ORIA) will immediately report the contracts and amendments identified in the audit to the federal subaward reporting system. In response to prior year’s audit finding, ORIA developed procedures to strengthen internal controls over the Federal Funding Accountability and Transparency Act (FFATA) reporting. To ensure ongoing compliance with the requirements, the Department will identify procedural gaps and provide training to staff responsible for the reporting duties. By July 2025, the Department will: • Develop a verification process to ensure supervisory reviews are performed to confirm FFATA submissions are done timely and completely. • Update procedures as needed to ensure full implementation of the updated FFATA reporting process. The conditions noted in this finding were previously reported in finding 2023-052. 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 558639 (2024-045)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure risk assessments performed for subrecipients of the Child Support Services program were accurate and complete. Questioned Costs: Assistance Listing # 93.563 Status: Corrective action in p...

Finding: The Department of Social and Health Services did not have adequate internal controls to ensure risk assessments performed for subrecipients of the Child Support Services program were accurate and complete. Questioned Costs: Assistance Listing # 93.563 Status: Corrective action in progress Corrective Action: The Department partially concurs with the auditor’s findings. The Department currently has control activities in place to review and approve risk assessments of program subrecipients. Weekly meetings take place with management to discuss current and ongoing issues with subrecipients and to assess potential risks. During these meetings, management is kept appraised of concerns, workloads, and status of risk assessment completion. In addition, risk assessment worksheets are used to document the assessed risks and actions taken as discussed with management in the weekly meetings. By June 2025, the Department will ensure the County Fiscal Liaison: • Retains email confirmations signed by the Chief of Policy or Government Liaison for each set of risk assessments completed for program subrecipients including prosecutors, courts, and clerks. • Updates subrecipient monitoring procedures to require documentation of management review and approval for all risk assessments. Completion Date: Estimated June 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 558638 (2024-044)

Material Weakness 2024

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 the statewide court hearing rate assessment was performed for subrecipients of the Child Support Services program. Questioned Costs: Assistance Listin...

Finding: The Department of Social and Health Services did not have adequate internal controls over and did not comply with requirements to ensure the statewide court hearing rate assessment was performed for subrecipients of the Child Support Services program. Questioned Costs: Assistance Listing # 93.563 Amount $0 Status: Corrective action in progress Corrective Action: The Department partially concurs with the audit finding. The Department has an established written process for conducting a sample of five counties to determine the statewide court hearing rate for the fiscal year. Two weeks after the due date for submitting court hearing data, two of the five counties contacted us with technical issues and concerns that their data may not be accurate and requested that other counties’ data be used as part of the sampling process. Since the Department was already into state fiscal year (SFY) 2024 and the court hearing rate needed to be established for courts’ reimbursement requests, it was not feasible to find two other counties that could pull two months of court hearings data from the prior year. The Division of Child Support management made the decision to carry over the certified rate from the prior fiscal year’s sampling process. Based on the insignificant difference in the sampling rates between SFY 2022 (6.35%) and SFY 2023 (6.58%), the Department determined that a carryover of the SFY 2023 rate would provide the most accurate representation of court caseloads and could mitigate the risk of the Department reimbursing the courts at an excessive rate. The Department provided the auditor documentation from the two counties that communicated their inability to participate in the SFY 2024 sampling process, as well as the Department’s communication to all the court administrators. In addition, the Department provided the approved SFY 2023 rate and sampling data. As of March 2025, a new county has been found to participate in the sampling process and the other county has resolved their system issues. By May 2025, the Department will update procedures for county hearing rate assessments to include requiring documentation when deviations from the established process are necessary. 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

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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 558636 (2024-042)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Questioned Costs 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 payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and property supported. Questioned Costs: A...

Finding: The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with requirements to ensure payments to child care providers paid with Temporary Assistance for Needy Families funds were allowable and property supported. Questioned Costs: Assistance Listing # 93.558 Amount $67,698,747 Status: Corrective action in progress Corrective Action: The Working Connections Child Care (WCCC) program was previously managed by the Department of Social and Health Services (DSHS) and the Department of Early Learning. Since the program transitioned in 2019, the Department has been making efforts to strengthen internal controls over payments to child care providers and other grant requirements. The Department implemented grant-level management of all federal funds, including the Temporary Assistance for Needy Families grant. This consisted of making significant grant level adjustments between allowable grant sources to properly spend grant dollars within the allowable period of performance and ensure level of effort and matching requirements were met. The Department’s grant adjustments were processed based on eligible clients and allowable activities. The State Auditor’s Office (SAO) has taken issue in the past several audits and maintained that the program is not auditable without child-level data. The Department is committed to collaborating with SAO to determine an appropriate methodology that identifies a sampling unit for accurately testing compliance. During the audit period, the Department did not have the staff and resources to develop and maintain the business process redesign, as well as the information technology initiatives necessary to meet the level of assurance recommended by the SAO. In response to the auditor’s recommendations, the Department submitted a budget request for the 2024 supplemental budget. The enacted budget included funding to implement the Department’s budget request beginning in state fiscal year 2025, specifically: “Funding in this subsection must be expended with internal controls that provide child-level detail for all transactions, beginning July 1, 2024.” The Department is working with a developer to assist with building out the required databases between the Social Service Payment System and the Agency Financial Reporting System to allow transfers between funding sources to include child-level data related to the expenditures. The Department looks forward to working with SAO to resolve the child-level data concerns in the audit of the child care grant programs. The conditions noted in this finding were previously reported in findings 2023-051, 2022-035, and 2021-028. Completion Date: Estimated December 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 558629 (2024-041)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

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

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program received required single audits, and that it appropriately followed up on findings ...

Finding: The Department of Health did not have adequate internal controls over and did not comply with requirements to ensure subrecipients of the Epidemiology and Laboratory Capacity for Infectious Diseases program received required single audits, and that it appropriately followed up on findings and issued management decisions. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Amount $0 Status: Corrective action in progress Corrective Action: The Department was not able to complete corrective action for the prior year’s finding due to staff shortages. The Department will continue to work on providing proper training and written processes to staff on the subrecipient single audit review process to ensure: • Timely review of federal subrecipient single audits. • Management decision letters are issued to subrecipients. • Subrecipients submit corrective action plans addressing deficiencies pertaining to the federal award, when applicable. Management will monitor the control activities to ensure future compliance with the requirements. The conditions noted in this finding were previously reported in finding 2023-049. Completion Date: Estimated December 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 558628 (2024-040)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Subrecipient Monitoring Procurement, Suspension & Debarment

Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Correctiv...

Finding: The Department of Health did not have adequate internal controls over and did not comply with fiscal monitoring requirements for the Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Corrective action in progress Corrective Action: During the COVID-19 pandemic, the Department operated under a competitive procurement waiver in order to expedite funding to critical partners throughout the state. Efforts to accelerate contracts combined with the misperception that Educational Service Districts (ESD) are an extension of the Office of Superintendent of Public Instruction prompted the decision to use an Interagency Agreement and therefore some fiscal monitoring reviews were not performed. Effective January 2024, the Department corrected this error with ESDs and vendor contracts executed after this date. The Department is continuing to refine the Fiscal Monitoring Unit (FMU) risk-based approach to subrecipient monitoring. The FMU is implementing a desk review process for identified low risk agencies which will lessen the administrative burden while still meeting the intent of 2 CFR 200.332 for subrecipient monitoring. Additionally, the FMU has hired additional staff who are fully trained and will be better positioned to meet the monitoring requirements moving forward. The improvements to the FMU monitoring process and the additional resources will allow the Department to comply with the subrecipient monitoring expectations for programs receiving federal funding. The conditions noted in this finding were previously reported in findings 2023-050 and 2022-033. Completion Date: Estimated December 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 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 558626 (2024-038)

Material Weakness 2024

State of Washington C/o Office of Financial Management

WA

Procurement, Suspension & Debarment Subrecipient Monitoring

Finding: The Department of Health did not have adequate internal controls over and did not comply with suspension and debarment requirements for Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Correc...

Finding: The Department of Health did not have adequate internal controls over and did not comply with suspension and debarment requirements for Epidemiology and Laboratory Capacity for Infectious Diseases program. Questioned Costs: Assistance Listing # 93.323 93.323 COVID-19 Status: Corrective action complete Corrective Action: During the COVID pandemic, the Department operated under a competitive procurement waiver in order to expedite funding to critical partners throughout the state. Efforts to accelerate contracts combined with the misperception that Educational Service Districts (ESDs) are an extension of the Office of Superintendent of Public Instruction prompted the decision to use an Interagency Agreement, and no suspension and debarment check was performed at the time the contracts were signed. As of January 2024, the Department corrected the error and included the suspension and debarment clause in the ESDs and all vendor contracts. The corrections were not reflected in contracts executed prior to January 2024. The conditions noted in this finding were previously reported in finding 2023-047. Completion Date: January 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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Corrective Action Plans

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