Corrective Action Plans

Finding 1162222 (2022-004)

Material Weakness 2022

Northeast Iowa Workforce Development Board

IA

Subrecipient Monitoring

Going forward, new subawards and pass thru grant agreements will have elements specified in the respective agreement as required by Uniform Guidance, Part 200.332 and WIOA. We plan to implement these changes January 1, 2026.

View Audit 372030

Finding 1162220 (2022-002)

Material Weakness 2022

Northeast Iowa Workforce Development Board

IA

Allowable Costs / Cost Principles Eligibility Internal Control / Segregation of Duties

The Northeast Iowa Workforce Development Area acknowledges the finding. Since the period under review, a new Title I service provider has been implemented, and multiple corrective measures have been established to strengthen eligibility determination and documentation. Eligibility checklists and sta...

The Northeast Iowa Workforce Development Area acknowledges the finding. Since the period under review, a new Title I service provider has been implemented, and multiple corrective measures have been established to strengthen eligibility determination and documentation. Eligibility checklists and standardized enrollment packets are now required for each program. In addition, the new service provider has instituted a quality assurance process, with two directors conducting case file reviews across the local area. The NEIWDB has hired a compliance specialist to provide oversight, including ongoing, quarterly, and annual monitoring of eligibility and documentation. Title I staff utilize IowaWORKS reports and alerts to support compliance, and regular monthly technical assistance sessions, statewide trainings, and structured onboarding were provided to the new service provider. These measures were implemented beginning July 1, 2024 and are ongoing. The compliance specialist will report monitoring results to the NEIWDB to ensure accountability and corrective follow-up where needed. The Northeast Iowa Local Area believe these actions fully address the issue and will prevent recurrence in future program years.

View Audit 372030

Finding 1162219 (2022-001)

Material Weakness 2022

Northeast Iowa Workforce Development Board

IA

Matching / Level of Effort / Earmarking Subrecipient Monitoring Reporting

The Northeast Iowa Workforce Development Area acknowledges the finding. Since the program year was reviewed, the State of Iowa has received a waiver allowing a 50% Out-of-School Youth and 50% In-School Youth expenditure split, which the Northeast Iowa LWDA has adopted. In addition, a new Title I ser...

The Northeast Iowa Workforce Development Area acknowledges the finding. Since the program year was reviewed, the State of Iowa has received a waiver allowing a 50% Out-of-School Youth and 50% In-School Youth expenditure split, which the Northeast Iowa LWDA has adopted. In addition, a new Title I service provider is in place, and procedures are being implemented to ensure compliance with the current expenditure requirements. LWDA staff will conduct quarterly reviews of youth expenditures and require regular reporting from the service provider to verify adherence.

View Audit 372030

Finding 1161329 (2022-003)

Material Weakness 2022

COUNTY OF NEWTON

TX

Internal Control / Segregation of Duties Subrecipient Monitoring Reporting § 200.512

The Commissioner’s of the County of Newton, Texas has reviewed the finding indicated as 2022-003 and agree with the finding. The Commissioner’s have adopted controls, and employed external accounting support, to insure that the County will comply in all material respects with its reporting requireme...

The Commissioner’s of the County of Newton, Texas has reviewed the finding indicated as 2022-003 and agree with the finding. The Commissioner’s have adopted controls, and employed external accounting support, to insure that the County will comply in all material respects with its reporting requirements as per the Uniform Guidance 2 CFR 200. Anticipated Completion Date: September 30, 2025 Responsible Parties: Sherry Moore, County Auditor and Commissioners

View Audit 371223

Finding 1161328 (2022-002)

Material Weakness 2022

COUNTY OF NEWTON

TX

Subrecipient Monitoring Cash Management Internal Control / Segregation of Duties § 200.512

The County will implement procedures and coordinate with outside grant management sources to ensure all grant documentation is received, approved, and reconciled to the general ledger prior to submitting requests for reimbursement. The Commissioners will ensure adequate training is provided. Anticip...

The County will implement procedures and coordinate with outside grant management sources to ensure all grant documentation is received, approved, and reconciled to the general ledger prior to submitting requests for reimbursement. The Commissioners will ensure adequate training is provided. Anticipated Completion Date: Full implementation should be accomplished by fiscal year 2026. Responsible Parties: Sherry Moore, County Auditor and Commissioners

View Audit 371223

Finding 1161261 (2022-047)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Reporting

Finding No.: 2022-047 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP agrees with this finding. HMGP acknowledges that this FFATA reporting condi...

Finding No.: 2022-047 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP agrees with this finding. HMGP acknowledges that this FFATA reporting condition was not addressed during the time period under review. However, HMGP became aware of the issue during a previous audit and have since been working to implement corrective measures. An action already taken for HMGP includes reaching out to the Public Assistance Office who had already begun the process of obtaining the necessary permissions on the FFATA Subaward Reporting System (FSRS) online submission portal to assign a designated administrator for our programs. The next action steps are: o To continue to work with the Governor’s office staff at to gain access through SAM.gov to ensure timely reporting of all subawards to FFATA/SAM.gov. o To establish adequate policies and procedures within HMGP’s standard operating procedures for the preparation and submission of FFATA reports to the FSRS. Once HMGP is provided with the necessary guidance and submission access on the FSRS, HMGP will promptly establish written internal controls to prevent any future non-compliance. HMGP understands that although the action steps taken to meet FFATA reporting compliance is actively underway, each subsequent Fiscal Year will unfortunately reflect a lack of FFATA submissions until the process is resolved and implemented. Proposed Completion Date: September 30, 2026

View Audit 371187

Finding 1161260 (2022-046)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Cash Management Subrecipient Monitoring

Finding No.: 2022-046 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Cash Management Questioned Costs: $2,687,277 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP respectfully disagrees with this finding. According to 31 CFR p...

Finding No.: 2022-046 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Cash Management Questioned Costs: $2,687,277 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: HMGP respectfully disagrees with this finding. According to 31 CFR part 205, which is the default procedure if a Treasury-State Agreement (TSA) is not formally in effect, it is permissible and standard practice for a reimbursement check to clear after the disbursement request date, provided the subrecipient has submitted proof of prior payment with local funds. All checks in the samples tested are from local funds and all documents attached verified the expenses. Reimbursable funding is a recognized funding technique under 31 CFR 205.12(b)(e). This technique means that a Federal Program Agency transfers federal funds to a state after that state has already paid out the funds for Federal assistance program purposes and provided all necessary documentation. HMGP’s process operates under this reimbursement methodology: subrecipients incur costs using local funds first, then submit required documentation to HMGP for reimbursement. Consequently, the timing of reimbursement payments clearing after the request date is an inherent and necessary characteristic of this system. In absence of the TSA, the CNMI adheres to this prescribed default and the reimbursement method procedures are acceptable under the default. All expenses were processed, recorded, and supported by documentation and shows that the expense has initially been paid by non-federal, local government funds, had been processed through Munis on a reimbursement basis, and was processed no later than 30 calendar days after the reimbursement request was received. The finding suggests a deficiency, HMGP’s procedures are standard and compliant practice when operating under a reimbursement system and the default procedure. Although HMGP does believe that the current process meets federal and FEMA requirements, HMGP will develop and document a formal written procedure clearly outlining the expenditure timing process under the reimbursement system. This procedure will explain how costs are verified as incurred and demonstrate compliance with applicable federal and FEMA standards for fund control and accountability. Provide additional clarification and support documents to the auditor, if requested. Proposed Completion Date: September 30, 2025.

View Audit 371187 Questioned Costs: $1

Finding 1161259 (2022-045)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles Cash Management § 200.1

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding....

Finding No.: 2022-045 AL Program: 97.039 - Hazard Mitigation Grant Program Area: Allowable Costs/Cost Principles Questioned Costs: $99,924 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: The Hazard Mitigation Grant Program (HMGP) agrees with this finding. During the audit submission process, HMGP provided the support documents for the journal entries and reversals associated with the $99,923.27 to the auditor, as requested. However, it was only upon receiving this audit finding # 2022-049, that the discrepancy of a duplicate audit drawdown was called into question. HMGP’s ledger for this project as well as the Munis drawdown history does not indicate a remaining balance of $99,923.73 and the project related to this finding has already been closed out. To address this audit finding that HMGP received this last week on September 17th, HMGP reached out to the Department of Finance to provide related documents for the drawdowns. Based on the documents provided by DOF, the questioned cost was not a direct result of the duplicate drawdown but as a result of the reverse journal entries made by Tyler Munis staff in an effort to correct the duplicate drawdown. HMGP accurately completed all required steps to process and provided the necessary justification to process a total of $99,923.73 for professional services and submitted it to DOF. Based on the supporting documents, the $99,923.73 was comprised of: • $53,451.01- under Request for Payment Application #11, letter reference # GAR22-HM-005 received by DOF on 10/18/2021 and requested to be charged to M142352.62060. • $46,472.72- under Request for Payment Application #12, letter reference # GAR22-HM-031 received by DOF on 11/05/2021 and requested to be charged to M142352.62060. Both HMGP payment application requests show the project string was meant to be charged to 62060 which stands for Professional Services and was submitted to DOF for processing. Since the new Munis financial system portal was launch in the CNMI a month prior, HMGP personnel were not able to enter transactions directly, unlike the current process. However, when the transaction was processed on Munis, it was entered in by a Tyler Munis representative, as identified by the staff initials SMD, who was assigned to assist DOF employees with data input during the transition period and, according to the Munis transaction history, accidentally entered the debit for the $99,923.27 under the Construction project string instead of Professional Services on 12/2/2021. On 12/13/2021, SMD credited the $99,923.27 back to Construction and debited $99,923.27 to Professional Services with Journal entry # 2125. The Munis transaction history also shows various entries and reversals made under the project account that serve to correct the same journal error. HMGP personnel would not be able to review the transactions entered prior to posting, and based on the transaction logs, even after the transactions were posted, HMGP would see that those involved in processing the transactions corrected their errors. Additionally, the supporting documents associated with the drawdowns on Munis display a bank statement with a lumpsum total of various project accounts. Furthermore, most of the journal entries during the time in question either contained the same supporting documents or indicated “access denied” when selected by HMGP personnel with Munis access. The document provided to HMGP on 9/24/2025 indicated the final two transactions related to this expense was entered by Tyler Munis staff on August of 2022. In an effort to reverse the duplicate drawdowns that occurred in Professional Services, SMD reversed the $99,923.27 from professional services labeled as "REV JE 2125 DONE IN ERROR". Journal Entry (JE) 2125 refers to the debit they initially made on 12/13/2021. This credit effectively canceled out and corrected one of the two drawdowns that occurred within the Professional Services Project String. However, on the same day, SMD made a second journal entry reversal under the Construction project string with an identical PA journal comment ""REV JE 2125 DONE IN ERROR."" It is unclear as to why this transaction occurred given that original error under construction was made and corrected on December 2021. Since this incorrect journal entry was made as a debit to construction and the correct journal entry was made as a credit to professional services, the net draw would have been $0. Since $0 worth of funds were paid out and no check was cut as a result, this additional debit would not have been conspicuous to HMGP or the DOF staff. HMGP is prepared to provide the additional documentation upon request. Additionally, acknowledging that the second debit to construction in August of 2022 for $99,923.73 was recorded and was not corrected for this project, HMGP will work with DOF to correct the journal entry and return the funds to FEMA. To address the finding, a significant action step already taken is the transition that occurred in 2024 for agencies to initiate their own drawdowns. This drawdown process ensures HMGP’s direct oversight of all expenditures moving forward to reduce the risk of future duplications. HMGP created an internal drawdown tracker upon DOF’s transition to agency-initiated drawdown requests for 2024 expenses to present. HMGP will work with DOF to correct the journal entry on Munis in relation to the questioned cost and process the return of funds to FEMA. HMGP will create a tracker for all requested transactions made to DOF, such as reversals or corrections if needed as that function cannot be completed on Munis by HMGP. HMGP will review the tracker on a bi-weekly basis to ensure that all MUNIS journal entries and transfers related to HMGP to ensure expenditures are completed accurately and on a timely basis to avoid future misclassifications or duplications. HMGP will continue to ensure that all payments are correctly coded and submitted into Munis with the appropriate documentation and supporting details. HMGP will update the financial management portion of the HMGP standard operating procedures to reflect these action items. Proposed Completion Date: September 30, 2026

View Audit 371187 Questioned Costs: $1

Finding 1161258 (2022-044)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.332 § 200.501

Finding No.: 2022-044 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $1,540,330 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistanc...

Finding No.: 2022-044 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Subrecipient Monitoring Questioned Costs: $1,540,330 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with this finding and acknowledges that, as the pass-through entity, we are responsible for monitoring subrecipients. The Public Assistance Office will strengthen monitoring procedures to ensure compliance with 2 CFR 200.332(e). Beginning September 2025, PAO has begun conducting biannual risk assessments. The PAO will also strengthen documentation and audit trails by maintaining monitoring checklists, review notes, and communications in subrecipient files. Proposed Completion Date: Ongoing Condition 2: The Public Assistance Office agrees with this finding and acknowledges that, as the pass-through entity, we are responsible for monitoring subrecipients. The Public Assistance Office will strengthen monitoring procedures to ensure compliance with 2 CFR 200.332(g). Beginning September 2025, PAO has begun conducting biannual risk assessments. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161257 (2022-043)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Reporting

Finding No.: 2022-043 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with...

Finding No.: 2022-043 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Reporting Questioned Costs: $-0- Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: The Public Assistance Office agrees with this finding and is aware of the need to submit the Federal Funding Accountability and Transparency Act (“FFATA”) reports. The Public Assistance Office will continue to work on gaining access through SAM.gov to ensure timely reporting of all subawards to FFATA/SAM.gov. As of September 2025, the Public Assistance Office has continued to attempt to gain access to enter these reports. Should the Public Assistance Office be granted access and necessary permissions to FFATA/SAM.gov, the Compliance and Audit Manager will input all previously unreported FFATA subaward data. Proposed Completion Date: December 31, 2025

View Audit 371187

Finding 1161256 (2022-042)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring Period of Performance § 200.344

Finding No.: 2022-042 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $423,234 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: 1. Regarding the finding...

Finding No.: 2022-042 AL Program: 97.036 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) Area: Period of Performance Questioned Costs: $423,234 Contact Person(s): Patrick Guerrero, Governor’s Authorized Rep., PAO Corrective Action Plan: Condition 1: 1. Regarding the finding related to DR4235MP, PW 95, the Public Assistance Office agrees that the liquidation was processed after the liquidation deadline. 2. Regarding the finding related to DR4396MP, PW 4, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of December 31, 2022. 3. Regarding the finding related to DR4511MP, PW 27, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of June 30, 2025. 4. Regarding the finding related to DR4511MP, PW 8, the Public Assistance Office disagrees with this finding. Liquidation was done prior to the closeout deadline of June 30, 2025. As of Fiscal Year 2024, the Public Assistance Office initiates drawdown requests, allowing for more timely processing. The office will implement better financial monitoring procedures to ensure obligations are liquidated within the required liquidation period. Staff will also be refreshed on liquidation requirements to ensure compliance. When delays are anticipated, the office will coordinate with subrecipients and promptly request necessary time extension approvals from Grantor to maintain compliance. Proposed Completion Date: Ongoing Condition 2: The Public Assistance Office respectfully disagrees with this finding. • Regarding the finding related to DR4235MP, PW 49, the Public Assistance Office disagrees with this finding. The invoice was dated and recorded after the period of performance (June 30, 2022), but date of actual work completed as shown on the Megger Test was May 20, 2022. The Public Assistance Office acknowledges that the record of the Megger Test had not been submitted to the auditors when submitting documentation. The Public Assistance Office will continue to exercise diligence in reviewing project documentation to ensure that all work is verified and completed prior to payment/reimbursement. The office will continue to monitor performance timelines to confirm that work is completed on or before the established period of performance deadlines. This process will include periodic internal reviews and coordination with subrecipients to ensure compliance. When delays are anticipated, the office will coordinate with subrecipients and promptly request necessary time extension approvals from Grantor to maintain compliance. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161252 (2022-041)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-041 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $3,640,189 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully d...

Finding No.: 2022-041 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $3,640,189 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. The CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: January 1, 2027

View Audit 371187 Questioned Costs: $1

Finding 1161251 (2022-040)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-040 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - ADP Risk Analysis and System Security Review Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees ...

Finding No.: 2022-040 AL Program: 93.778 - Medical Assistance Program Area: Special Tests and Provisions - ADP Risk Analysis and System Security Review Questioned Costs: $-0- Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187

Finding 1161249 (2022-038)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles Eligibility

Finding No.: 2022-038 AL Program: 93.778 - Medical Assistance Program Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $27,816,686 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfull...

Finding No.: 2022-038 AL Program: 93.778 - Medical Assistance Program Area: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Questioned Costs: $27,816,686 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: CNMI Medicaid Office respectfully disagrees with this finding. The agency currently does not have a Medicaid Management Information System (MMIS) in place to collect and accurately report comprehensive Benefits Paid data. All data processing is done manually, and information is maintained using Excel spreadsheets, which limits the ability to generate complete and reliable reports. Additionally, the "Benefits Paid" data provided to the auditor does not include services covered under the Certified Public Expenditures (CPE) payments made to CHCC. Therefore, these records should not be used as the sole basis for evaluating program eligibility, total expenditures, or compliance with eligibility requirements. However, the CNMI Medicaid Office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161244 (2022-037)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-037 AL Program: 93.767 - Children’s Health Insurance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $7,932,110 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: CNMI Medicaid Office respectfu...

Finding No.: 2022-037 AL Program: 93.767 - Children’s Health Insurance Program Area: Special Tests and Provisions - Provider Eligibility (Screening and Enrollment) Questioned Costs: $7,932,110 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: CNMI Medicaid Office respectfully disagrees with the finding. While the office did perform OIG exclusion list validation, screenshots were not captured for each individual check. It is important to note that the OIG Exclusion List portal’s search function is limited to on-screen viewing and does not provide a built-in option to print or export search results. Additionally, the CMS access process for exclusion checks involves a rigorous background clearance, and only one personnel of three total successfully gained access. CNMI Medicaid Office acknowledges that historically, limited personnel capacity has hindered full compliance with this requirement. However, efforts are currently underway to streamline and strengthen the exclusion verification process. The office is actively developing a fully functional Program Integrity Division that will be responsible for conducting and documenting OIG exclusion checks in a consistent and compliant manner moving forward. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161242 (2022-035)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring Allowable Costs / Cost Principles § 200.308 § 200.309 § 200.344 § 200.403

Finding No.: 2022-035 AL Program: 93.767 - Children’s Health Insurance Program Area: Period of Performance Questioned Costs: $38,556 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal schedul...

Finding No.: 2022-035 AL Program: 93.767 - Children’s Health Insurance Program Area: Period of Performance Questioned Costs: $38,556 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161241 (2022-034)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring

Finding No.: 2022-034 AL Program: 93.767 - Children’s Health Insurance Program Area: Activities Allowed or Unallowed and Allowable Costs/Costs Principles Questioned Costs: $1,182,511 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office re...

Finding No.: 2022-034 AL Program: 93.767 - Children’s Health Insurance Program Area: Activities Allowed or Unallowed and Allowable Costs/Costs Principles Questioned Costs: $1,182,511 Contact Person(s): Geroge J. Cruz, Medicaid Director Corrective Action Plan: Condition 1: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 2: CNMI Medicaid Office cannot confirm to agree or disagree with the findings stated, as the information references case numbers without sufficient supporting detail. The office does not operate a Medicaid Management Information System (MMIS) and therefore cannot automatically retrieve data to link case numbers with the total benefits paid or questioned costs. Additionally, two of the three case numbers provided are associated with multiple individuals. Even if the case numbers were accurate and beneficiary names included, the office would still need to identify the provider(s) associated with the payments in question. Claims data is maintained manually in Excel spreadsheets, consolidated across beneficiaries, and processed for payment through the MUNIS system using internally generated invoice numbers. These invoice numbers are not linked to specific beneficiaries. Therefore, to properly evaluate the findings, the office would require not only the case number, but also the beneficiary’s full name and the corresponding MUNIS invoice number. The office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing Condition 3: The CNMI Medicaid Office respectfully disagrees with this finding. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the office maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161240 (2022-033)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Special Tests & Provisions Subrecipient Monitoring

Finding No.: 2022-033 AL Program: 93.489/93.575/93.596 - CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $1,757,352 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: CCDF respectfully disagree...

Finding No.: 2022-033 AL Program: 93.489/93.575/93.596 - CCDF Cluster Area: Special Tests and Provisions – Health and Safety Requirements Questioned Costs: $1,757,352 Contact Person(s): Roselle Teregeyo, CCDF Co-Administrator/Accountant Corrective Action Plan: Condition 1: CCDF respectfully disagrees with this finding. In the middle of the Fiscal year, the CCDF Program transitioned to have the Quality Rating and Improvement System or QRIS perform the announced and unannounced visits. To allow the complete transition of the CCDF Certification and monitoring system, as independent from the Child Care Licensing Program, CCDF extended all expiration dates of CCDF Providers for an additional two months. This extension was given to all CCDF providers renewing from April 2022 to December 31, 2022. With the transition, CCDF allowed for providers to meet provider requirements in a year and were only subjected to an announced visit. Any non-compliance was noted, but supported to compliance through coaching. Effective October 1, 2022, all CCDF Providers are now subjected to announced and unannounced visits. Proposed Completion Date: Completed Condition 2: CCDF respectfully disagrees with this finding. Based on our records, all providers met the annual training hours. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161232 (2022-031)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.331 § 200.332 § 200.415 § 200.513 § 200.521

Finding No.: 2022-031 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding....

Finding No.: 2022-031 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Subrecipient Monitoring Questioned Costs: $61,003,095 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. The Department will expand on this policy and procedure to include the development and implementation of a comprehensive subrecipient monitoring policies that clearly outline the process for identifying subawards, assessing the risk of noncompliance, and conducting monitoring activities based on those risks. These policies will be aligned with federal requirements and best practices to ensure consistency and accountability. Furthermore, due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, resulting in this finding. However, the Department maintains all relevant supporting documentation and is prepared to provide it upon request from the Grantor. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161231 (2022-030)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Reporting Matching / Level of Effort / Earmarking

Finding No.: 2022-030 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Reporting Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. It is important to n...

Finding No.: 2022-030 AL Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds Area: Reporting Questioned Costs: $-0- Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-3: The Department of Finance agrees with this finding. It is important to note that the issue occurred during FY22, a period marked by the transition from the legacy financial system (JDE) to the new Tyler Munis platform. During this time, processes for retaining and reconciling supporting documents had not been standardized, resulting in inconsistencies and a heightened risk of missing or improperly uploaded records. Furthermore, the Program Manager previously responsible for overseeing this grant is no longer with the Department. Due to internal scheduling constraints and the compressed timeline required to complete the FY22 audit, the requested documents were not submitted by the specified deadline, which contributed to this finding. Nevertheless, the Department is committed to provide relevant supporting documentation upon request from the Grantor. Proposed Completion Date: Ongoing.

View Audit 371187

Finding 1161228 (2022-027)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.331 § 200.332

Finding No.: 2022-027 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-4: The Department of Finance agrees with this finding. The Department h...

Finding No.: 2022-027 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Subrecipient Monitoring Questioned Costs: $4,157,924 Contact Person(s): Tracy B. Norita, Secretary of Finance Corrective Action Plan: Condition 1-4: The Department of Finance agrees with this finding. The Department has recently adopted and approved (August 2025) a Subrecipient Monitoring Policy and Procedures which specifically focused on the implementation of 2 CFR 200.331. The Department will expand on this policy and procedure to include the development and implementation of a comprehensive subrecipient monitoring policies that clearly outline the process for identifying subawards, assessing the risk of noncompliance, and conducting monitoring activities based on those risks. These policies will be aligned with federal requirements and best practices to ensure consistency and accountability. Proposed Completion Date: December 31, 2025

View Audit 371187 Questioned Costs: $1

Finding 1161227 (2022-026)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Reporting

Finding No.: 2022-026 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Zenie Mafnas, NMHC Director / Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI agrees with this finding. Department of Finance Program Manager ...

Finding No.: 2022-026 AL Program: 21.026 - Homeowner Assistance Fund Program Area: Reporting Questioned Costs: $-0- Contact Person(s): Zenie Mafnas, NMHC Director / Tracy B. Norita, Secretary of Finance Corrective Action Plan: The CNMI agrees with this finding. Department of Finance Program Manager previously responsible for overseeing this grant is no longer with the Department. DOF will work with NMHC to verify whether the required FFATA reports and any other required activities were prepared and submitted to the Subaward Reporting System. Proposed Completion Date: Ongoing

View Audit 371187

Finding 1161221 (2022-020)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Matching / Level of Effort / Earmarking Subrecipient Monitoring

Finding No.: 2022-020 AL Program: 17.225 - Unemployment Insurance Area: Eligibility Questioned Costs: $80,773 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Condition 1: The CNMI agrees that the expenditure listing from the Financial System is significantly lowe...

Finding No.: 2022-020 AL Program: 17.225 - Unemployment Insurance Area: Eligibility Questioned Costs: $80,773 Contact Person(s): Zachary Taitano, PUA Program Manager, DOL Corrective Action Plan: Condition 1: The CNMI agrees that the expenditure listing from the Financial System is significantly lower than the listing generated from the HireMarianas Portal. This discrepancy is due to the fact that the expenditure listing reflects only disbursed payments, whereas the HireMarianas Portal listing includes transactions that were removed, cancelled, or rejected by the claimant’s financial institution. Additionally, the HireMarianas listing includes payments that were cancelled and subsequently reissued through the portal, which may result in what appear to be duplicate entries. Proposed Completion Date: Completed Condition 2: The CNMI partially agrees with this finding. While it is acknowledged that 8 of the 11 identified users’ SAVE verification results were uploaded onto the HireMarianas Portal late, all claimants were of Qualified Alien status in accordance with the definition provided through the Immigration and Nationality Act (INA). Moreover, all SAVE responses are now on the respective applicants’ supporting documents tab on the HireMarianas Portal. Proposed Completion Date: Ongoing

View Audit 371187 Questioned Costs: $1

Finding 1161220 (2022-019)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Questioned Costs Subrecipient Monitoring § 200.1 § 200.331 § 200.332

Finding No.: 2022-019 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $549,849 Contact Person(s): Nerissa B. Karakaya, CIP COTR / Angelina Phillips, Office of Management and Budget (OMB) Corrective Action Plan: Condi...

Finding No.: 2022-019 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Subrecipient Monitoring Questioned Costs: $549,849 Contact Person(s): Nerissa B. Karakaya, CIP COTR / Angelina Phillips, Office of Management and Budget (OMB) Corrective Action Plan: Condition 1 (N. Karakaya): CIP agrees with this finding. The address this finding, CIP will implement the following: 1. Establish Written Procedures: CNMI has developed and will initiate the implementation of formal written procedures requiring that all potential subrecipients be checked in SAM.gov prior to award and that verification is documented and retained in the official files. 2. Standardized Documentation: A standardized risk assessment checklist will be used for all subrecipients to confirm they are not suspended, debarred, or excluded under 2 CFR §180.300. 3. Staff Training: All staff responsible for subrecipient monitoring will receive training on federal requirements for exclusion checks and proper documentation procedures. 4. Monitoring and Review: CIP will conduct periodic reviews to ensure that SAM.gov checks are consistently performed and documented for all new and existing subrecipients. Condition 2 (N. Karakaya): CIP respectfully disagrees with this finding. The subrecipient was not required to submit the required project narrative report; instead, the report was prepared and submitted by the project manager responsible for managing the project as assigned by the Capital Improvement Program. In accordance with 2 CFR §200.328 – Monitoring and Reporting Program Performance, subrecipients are required to provide performance reports to the pass-through entity that document the status and progress of activities in accordance with the approved scope of work. To correct this issue, the subrecipient will implement a formal internal procedure designating the Program Coordinator as responsible for preparing, reviewing, and submitting all project narrative reports. Additionally, mandatory training will be conducted for all relevant subrecipient staff on federal reporting requirements and proper submission procedures, and all future narrative reports will include a certification by the authorized subrecipient representative confirming proper submission. The Capital Improvement Program will monitor submissions quarterly for the next 12 months to ensure full compliance. Corrective Actions: 1. Implement a formal internal reporting procedure requiring the subrecipient’s Program Coordinator to prepare, review, and submit all project narrative reports. 2. Conduct mandatory training for subrecipient staff on federal reporting requirements, documentation standards, and submission procedures. 3. Include a certification statement on all future narrative reports, signed by the subrecipient’s authorized representative, confirming proper submission. 4. Conduct quarterly monitoring of subrecipient submissions for the next 12 months to ensure compliance with reporting requirements. Proposed Completion Date: December 31, 2025 Condition 3 (N. Karakaya): We acknowledge the finding that documentation was not provided to verify whether eight subrecipients were subject to the audit requirements. The Capital Improvement Program will strengthen its subrecipient monitoring procedures to ensure compliance with 2 CFR 200.331(f) and related audit requirements. Corrective actions will include: 1. Policy Implementation: Adopt and disseminate the newly established Subrecipient Monitoring Policy and Procedures, which specify verification of subrecipients’ audit requirements. 2. Training: Provide training for program and grants management staff on the updated procedures and audit verification process. 3. Documentation: Maintain written evidence of audit requirement verifications for all subrecipients as part of the grant administration files. 4. Ongoing Monitoring: Incorporate periodic review of subrecipient audit status into the regular monitoring schedule to ensure continued compliance. These steps will be implemented immediately and will be applied to all current and future awards to prevent recurrence of this issue. Proposed Completion Date: December 31, 2025

View Audit 371187 Questioned Costs: $1

Finding 1161219 (2022-018)

Material Weakness 2022

Commonwealth of the Northern Mariana Islands

MP

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Finding No.: 2022-018 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $-0- Contact Person(s): Nerissa B. Karakaya, CIP COTR Corrective Action Plan: CIP agrees with this finding. A documentation checklist exists; however, it was no...

Finding No.: 2022-018 AL Program: 15.875 - Economic, Social, and Political Development of the Territories Area: Reporting Questioned Costs: $-0- Contact Person(s): Nerissa B. Karakaya, CIP COTR Corrective Action Plan: CIP agrees with this finding. A documentation checklist exists; however, it was not consistently fully extended to program administration records. Monitoring controls focused primarily on project completion, resulting in less attention to verifying that supporting documentation for administrative expenses was fully compiled and properly reconciled. In addition, segregation-of-duties constraints were evident, as the same staff oversaw both the preparation of reports and the maintenance of program administration records, which limited independent verification and delayed the retrieval of required documentation. The following steps will be implemented to address this finding. 1. Implement Formal Monitoring Procedures • Develop and document a standardized review checklist to verify that all data in financial and operational reports is supported by source documentation and reconciled to the accounting records. • Require periodic management sign-off (e.g., monthly or quarterly) to confirm that reconciliations are performed and retained. 2. Strengthen Segregation of Duties • Reassign key tasks so that data preparation, reconciliation, and approval are performed by separate individuals or units whenever possible. • Where staffing constraints prevent full segregation, implement compensating controls (e.g., independent supervisory review, dual sign-off). 3. Training and Capacity Building • Provide targeted training to finance and program staff on proper documentation, reconciliation procedures, and the importance of segregation of duties. 4. Periodic Internal Reviews • Establish periodic internal audits or spot checks by an independent unit (e.g., internal audit or compliance team) to verify adherence to the new monitoring controls and segregation requirements. 5. Timeline for Implementation • Within 30 days: Draft and approve written monitoring and reconciliation procedures. • Within 60 days: Reassign tasks to strengthen segregation of duties or document compensating controls. • Within 90 days: Conduct staff training and begin periodic internal reviews. 6. Monitoring & Reporting • Quarterly management reports to track completion of reconciliations and internal review results. • Annual evaluation of control design and effectiveness by internal audit or an independent reviewer. These actions will ensure reported data is consistently supported by accurate underlying accounting records and controls are suitably designed and effective, reducing the risk of misstatement or undetected errors due to inadequate segregation of duties. Proposed Completion Date: December 31, 2025

View Audit 371187

Corrective Action Plans

Filters