Corrective Action Plans

Finding 1166558 (2024-012)

Material Weakness 2024

CA

Internal Control / Segregation of Duties Eligibility Special Tests & Provisions § 200.303

CHCQ will address the audit findings by increasing outreach to local District Office management and by providing ongoing oversight to frontline staff. CHCQ will emphasize the importance of completing CMS 1539 forms with proper documentation and signatures for all recertification surveys, including s...

CHCQ will address the audit findings by increasing outreach to local District Office management and by providing ongoing oversight to frontline staff. CHCQ will emphasize the importance of completing CMS 1539 forms with proper documentation and signatures for all recertification surveys, including surveys conducted by Accrediting Organizations. CHCQ has already taken steps by reiterating this requirement at a recent statewide management meeting. CHCQ will continue reminding staff of expectations at appropriate meetings and provide additional training as needed to ensure all offices follow consistent procedures when completing the required CMS 1539 forms. Headquarters management will provide oversight and conduct periodic audits to ensure staff complete and sign all CMS 1539 forms according to expectations. Estimated Implementation Date: Fiscal Year 2025-26 Contact: Nate Gilmore, State Surveyors Branch Chief, CHCQ

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Finding 1166553 (2024-011)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Eligibility Internal Control / Segregation of Duties § 200.303

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance, DHCS will resume monitoring county performance and timeliness standards. County p...

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance, DHCS will resume monitoring county performance and timeliness standards. County performance standards measure the timeliness of county actions, while Focused Reviews evaluate both timeliness and accuracy of county determinations related to Medi-Cal applications, redeterminations, and Medi-Cal Eligibility Data System (MEDS) Alert processing. All counties will participate in a Focused Review on a biennial, rotating basis. Through the reinstatement of county performance standards and Focused Reviews, DHCS can identify and address eligibility concerns, such as the proper use of aid codes, and work with counties through the corrective action plan process to address staff training to ensure correct eligibility determinations for all Medi-Cal programs, including pregnancy programs. Estimated Implementation Date: Fully Implemented Contact: Sarah Crow, Medi-Cal Eligibility Division, Division Chief Harold Higgins, Medi-Cal Eligibility Division, Branch Chief Amy Halim, Medi-Cal Eligibility Division, Section Chief

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Finding 1166548 (2024-010)

Material Weakness 2024

State of California

CA

Eligibility Internal Control / Segregation of Duties § 200.303

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance. DHCS has resumed monitoring county performance and timeliness standards. County p...

Effective June 1, 2024, DHCS reinstated county performance standards and reintroduced Focused Reviews. As outlined in All County Welfare Directors Letter (ACWDL) 24-17—Enhancing County Medi-Cal Eligibility Performance. DHCS has resumed monitoring county performance and timeliness standards. County performance standards measure the timeliness of county actions, while Focused Reviews evaluate both timeliness and accuracy of county determinations related to Medi-Cal applications, redeterminations, and Medi-Cal Eligibility Data System (MEDS) Alert processing. All counties will participate in a Focused Review on a biennial, rotating basis. Additionally, DHCS resumed the Aid Code Cleanup effort in September 2025, as outlined in MEDIL I 25-19. The purpose of the aid code cleanup effort is to assist counties in identifying records that require eligibility re-evaluation to either transition individuals to the correct Medi-Cal aid code or appropriately discontinue coverage. Through these initiatives, DHCS can identify and address eligibility concerns, such as processing timeliness and proper aid code usage. Estimated Implementation Date: Fully Implemented Contact: Sarah Crow, Medi-Cal Eligibility Division, Division Chief Harold Higgins, Medi-Cal Eligibility Division, Branch Chief Amy Halim, Medi-Cal Eligibility Division, Section Chief

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Finding 1166546 (2024-009)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.1 § 200.303 § 200.332 § 200.414

In response to the previous audit finding, CDPH submitted the required risk assessment as of January 2025, along with supporting documentation. Moving forward, CDPH will establish formal procedures to ensure that all required federal award information – such as the Assistance Listings Number, Title,...

In response to the previous audit finding, CDPH submitted the required risk assessment as of January 2025, along with supporting documentation. Moving forward, CDPH will establish formal procedures to ensure that all required federal award information – such as the Assistance Listings Number, Title, and FAIN – is clearly identified in all agreements with subrecipients. Estimated Implementation Date: March 2026 Contact: • Melissa Relles • Assistant Deputy Director • Center for Preparedness and Response

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Finding 1166545 (2024-008)

Material Weakness 2024

State of California

CA

Procurement, Suspension & Debarment § 200.303

CDPH is reviewing its existing procedures for verifying the suspension and debarment status of vendors prior to entering into any agreements involving federal funds. CDPH will enhance these procedures as necessary to ensure full compliance. Estimated Implementation Date: March 2026 Contact: • Meliss...

CDPH is reviewing its existing procedures for verifying the suspension and debarment status of vendors prior to entering into any agreements involving federal funds. CDPH will enhance these procedures as necessary to ensure full compliance. Estimated Implementation Date: March 2026 Contact: • Melissa Relles • Assistant Deputy Director • Center for Preparedness and Response

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Finding 1166544 (2024-007)

Material Weakness 2024

State of California

CA

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

SWRCB Program Manager acknowledges and understands the recommendation. During the December 2023 period, the SWRCB Program Manager held a meeting with staff and reviewed the information prior to approving the information being inputted into the CDOF Portal. Information being submitted to the CDOF Por...

SWRCB Program Manager acknowledges and understands the recommendation. During the December 2023 period, the SWRCB Program Manager held a meeting with staff and reviewed the information prior to approving the information being inputted into the CDOF Portal. Information being submitted to the CDOF Portal aligns with the FI$Cal KK Report per the direction of CDOF. For information provided by the SWRCB for the CDOF Quarterly Reporting, the SWRCB started formally documenting the approval of information starting the quarter after the December 2023 period. Corrective action plan: SWRCB Program Manager has implemented a process for the recommendation provided. As of the quarter following December 2023 period, a formal process that documents the information and approval of that information for CDOF portal updates is being used. The information submitted to the CDOF Portal aligns with the FI$Cal KK Report per the direction of CDOF. Estimated Implementation Date: March 2024 Contact: Selica Potter

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Finding 1166543 (2024-006)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Reporting § 200.303 § 200.332

On November 25, 2025, it was brought to the attention of DLA that significantly more Assistance Listing Numbers (ALNs) have been created to correlate to specific programs awarded by FHWA. While the Caltrans Division of Local Assistance does not have the capacity to electronically identify the ALNs, ...

On November 25, 2025, it was brought to the attention of DLA that significantly more Assistance Listing Numbers (ALNs) have been created to correlate to specific programs awarded by FHWA. While the Caltrans Division of Local Assistance does not have the capacity to electronically identify the ALNs, the Caltrans Office of Federal Resources (OFR) owns the database that DLA uses to process federal requests for authorizations. By January 31, 2026, DLA and OFR will meet with FHWA to determine how they may transmit the ALN into Caltrans’ database. By June 30, 2026, the DLA will determine how to upload the data into the program supplement agreement or finance letter, which will be transmitted to subrecipients. Estimated Implementation Date: 6/30/2026 Contact: Dee Lam, Division of Local Assistance

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Finding 1166541 (2024-005)

Material Weakness 2024

State of California

CA

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

The HQ Budgets OFR will update FPFT guidance and development documentation to include specific references to a new required secondary data validation for the more complex funding scenarios. A set of core FPFT standard templates will be modified to include an automated requirement for secondary data ...

The HQ Budgets OFR will update FPFT guidance and development documentation to include specific references to a new required secondary data validation for the more complex funding scenarios. A set of core FPFT standard templates will be modified to include an automated requirement for secondary data validation for any project that includes complex funding scenarios, including cooperative agreements, multiple funding priorities, multiple federal program codes, multiple state funding programs, and funding earmarks. Calculated data cells for federal reimbursement ratios will be added, as well as an automated check for the total sum of funding line percentages to ensure any rounding errors are eliminated. Consistent training will be provided for key HQ Budgets OFR staff on a regular basis, including live sessions for practical FPFT case reviews and FPFT development during monthly team meetings. Estimated Implementation Date: • Updated FPFT guidance documentation: 11/25/2025 • Updated FPFT template (automated secondary validation): 12/01/2025 • Monthly live training sessions (1st Thursday each month): 12/04/2025 Contact: • Raul Lerma, Chief, Program and Project Management Branch, Office of Federal Resources, HQ Division of Budgets • Keith Duncan, Division Chief, HQ Division of Budgets

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Finding 1166539 (2024-004)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Allowable Costs / Cost Principles Eligibility § 200.303

The EDD has policies, procedures, and training in place instructing employees to include applicable penalty amounts when establishing overpayments in the database. When the overpayment for the sample in question was established, the employee did not follow the proper procedure to include the penalty...

The EDD has policies, procedures, and training in place instructing employees to include applicable penalty amounts when establishing overpayments in the database. When the overpayment for the sample in question was established, the employee did not follow the proper procedure to include the penalty. EDD accepts this oversight and is committed to reviewing its applicable policies and procedures to ensure they are clear, and the penalty requirements are emphasized. Regarding internal controls, EDD leverages a process known as the Field Office Basic Evaluation System (FOBES). This process includes a standardized form that is utilized by leadership to evaluate the quality of their employees’ work on a variety of processes, including overpayment processing. EDD continues to review and modernize the existing assessment form and FOBES process to ensure effectiveness and consistency while evaluating employee compliance with policies and procedures Estimated Implementation Date: Currently Implemented Contact: Diane Underwood, Division Chief, Unemployment Insurance Branch, California Employment Development Department

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Finding 1166537 (2024-003)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Reporting Allowable Costs / Cost Principles § 200.303

Recognizing that the finding does not include any questioned costs, EDD agrees with the recommendation as it relates to the need for a formal reconciliation process between the U.S. DOL (DOL) ETA Financial Report, form ETA-9130 (ETA-9130) and the general ledger. EDD will take steps to formally docum...

Recognizing that the finding does not include any questioned costs, EDD agrees with the recommendation as it relates to the need for a formal reconciliation process between the U.S. DOL (DOL) ETA Financial Report, form ETA-9130 (ETA-9130) and the general ledger. EDD will take steps to formally document the process, including roles and responsibilities, a more regular reconciliation schedule and a plan to resolve variances with documented approvals. Also, as recommended, updates will be made to financial reporting procedures and staff that are part of this process will receive training. Estimated Implementation Date: June 2026 Contact: Diane Underwood, Division Chief, Unemployment Insurance Branch, California Employment Development Department

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Finding 1166535 (2024-002)

Material Weakness 2024

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment § 200.303

Cal OES agrees with CLA's recommendation. Cal OES Grants Management which oversees Crime Victim Assistance funds has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls and ensure staff are fully trained to maintain compliance with all FFATA ...

Cal OES agrees with CLA's recommendation. Cal OES Grants Management which oversees Crime Victim Assistance funds has revised its existing FFATA reporting procedures and has taken several actions to strengthen internal controls and ensure staff are fully trained to maintain compliance with all FFATA reporting requirements. In March of 2025, Cal OES Grants Management centralized FFATA reporting responsibilities and are currently under the purview of the Grants Management Support (GMS) Unit. Cal OES Grants Management also implemented the Grants Centralized System (GCS) which automates the grant application process and assists in generating required FFATA data effective Fiscal Year 2024-2025. In addition, in March of 2025, the Cal OES GMS Unit was provided a comprehensive FFATA training course to ensure staff understand the federal reporting requirements and provided the updated FFATA Reporting Guide Standard Operating Procedure (SOP) (attachment #1). The FFATA Reporting Guide SOP outlines steps for collecting subrecipient data, preparing reports, and submitting reports within the required time frames. Furthermore, FFATA reporting is now performed by Cal OES GMS Unit analysts and is reviewed and approved by their respective unit leads and manager to verify accuracy and complete reporting. Estimated Implementation Date: Implemented Contact: • Negin Sabbaghian, Chief • Grants Processing Division • Compliance Processing Section • Grants Management • California Governor's Office of Emergency Services

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Finding 1166020 (2024-006)

Material Weakness 2024

ELDRED BOROUGH WATER AUTHORITY

NY

Internal Control / Segregation of Duties Reporting § 200.303

Segregation of Duties - Auditor’s Recommendations: We recommend that the Authority assess the current structure and implement compensating controls where full segregation of duties is not feasible due to staffing limitations. These may include enhanced supervisory review, periodic oversight by the b...

Segregation of Duties - Auditor’s Recommendations: We recommend that the Authority assess the current structure and implement compensating controls where full segregation of duties is not feasible due to staffing limitations. These may include enhanced supervisory review, periodic oversight by the board or executive leadership, documentation of independent reviews, and rotation of duties when possible. Authority’s Response: The board reviews the reports monthly. A printed payroll report and checks written from meeting to meeting are provided and are approved and initialed. Also provided is a report of the bank statements for the board to review what has been received and what has been paid. Before any bills are paid they are approved at the meeting. If an error is made when inputting a deposit received into C/A, the correction is printed and initialed approving the correction.

View Audit 376845

Finding 1165618 (2024-244)

Material Weakness 2024

State of Idaho

ID

Reporting Internal Control / Segregation of Duties § 200.303 § 200.510

Finding 2024-244: The Department’s original Schedule of Expenditures of Federal Awards submitted to the Office of the State Controller underreported the amount disbursed to subrecipients by $3,500,000 under the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) program. Related to Prior Findi...

Finding 2024-244: The Department’s original Schedule of Expenditures of Federal Awards submitted to the Office of the State Controller underreported the amount disbursed to subrecipients by $3,500,000 under the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) program. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The Department will improve training and the review process for the SEFA closing package to ensure appropriate reporting of subrecipient expenditures on the SEFA. The Department will review the FY 2025 SEFA closing package that was submitted to the Office of the State Controller to ensure the appropriate subrecipient expenditures were reported. Anticipated Corrective Action Date: November 30, 2025 Responsible for Corrective Action: Sascha Marston Financial Officer (208) 287-4819 Sascha.marston@idwr.idaho.gov

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Finding 1165617 (2024-243)

Material Weakness 2024

State of Idaho

ID

Allowable Costs / Cost Principles § 200.303 § 200.403

Finding 2024-243: The Division did not properly evaluate costs related to the Rehabilitation Services- Vocational Rehabilitation Grants to States and direct costs were incorrectly recorded as indirect costs for the grant. Related to Prior Finding: N/A Agency’s view: Agree 7.1 Corrective Action Plan:...

Finding 2024-243: The Division did not properly evaluate costs related to the Rehabilitation Services- Vocational Rehabilitation Grants to States and direct costs were incorrectly recorded as indirect costs for the grant. Related to Prior Finding: N/A Agency’s view: Agree 7.1 Corrective Action Plan: Establish and Document Clear Cost Classification Procedures: Develop written procedures defining and distinguishing between direct and indirect costs. 7.2 Strengthen Internal Controls Over Cost Allocation: Implement review and approval controls to verify proper cost classification before posting transactions to Luma or inclusion in the indirect cost pool. 7.3 Enhance Staff Training and Knowledge: Provide targeted training for fiscal staff to ensure understanding of allowable cost principles and consistent application of cost classification policies. 7.4 Ensure Documentation Retention and Review: Maintain complete documentation supporting all cost allocations, including approval records, cost pool calculations, and reconciliations. 7.5 Perform Regular Monitoring and Verification: Conduct periodic reviews of both direct and indirect cost transactions to confirm classification accuracy and identify any required adjustments. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

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Finding 1165616 (2024-242)

Material Weakness 2024

State of Idaho

ID

Reporting Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303 § 200.510

Finding 2024-242: The Division did not accurately report federal grant expenditures on the Schedule of Expenditures of Federal Awards (SEFA) Closing Package. Related to Prior Finding: N/A Agency’s view: Agree 6.1 Corrective Action Plan: Develop and Implement Written SEFA Procedures: Create formal wr...

Finding 2024-242: The Division did not accurately report federal grant expenditures on the Schedule of Expenditures of Federal Awards (SEFA) Closing Package. Related to Prior Finding: N/A Agency’s view: Agree 6.1 Corrective Action Plan: Develop and Implement Written SEFA Procedures: Create formal written procedures describing how SEFA amounts are compiled, reconciled, reviewed, and approved prior to submission within Grants Management Manual. 6.2 Strengthen Internal Controls and Oversight: Implement internal review and approval steps that require documented verification of SEFA amounts against Luma accounting records. 6.3 Ensure Accurate Grant Coding: Review and correct all federal grant fund transactions not assigned to specific grants, ensuring proper coding and allocation in Luma. 6.4 Training and Staff Development: Provide training to fiscal staff on SEFA preparation, reconciliation, and documentation requirements. 6.5 Establish Continuous Monitoring: Perform periodic reviews of federal expenditure coding and SEFA data to identify discrepancies before year-end reporting. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

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Finding 1165615 (2024-241)

Material Weakness 2024

State of Idaho

ID

Procurement, Suspension & Debarment Subrecipient Monitoring § 200.303

Finding 2024-241: The Division did not verify that vendors receiving payments from the Rehabilitation Services – Vocational Rehabilitation Grants to States program, were not suspended or debarred prior to making federal grant payments. Related to Prior Finding: N/A Agency’s view: Agree 5.1 Correctiv...

Finding 2024-241: The Division did not verify that vendors receiving payments from the Rehabilitation Services – Vocational Rehabilitation Grants to States program, were not suspended or debarred prior to making federal grant payments. Related to Prior Finding: N/A Agency’s view: Agree 5.1 Corrective Action Plan: Policy Development and Alignment: Revise the Division’s procurement and grant management procedures to include mandatory ongoing verification and documentation of suspension and debarment status for all vendors involved in covered transactions. 5.2 Systematic Verification Process: Implement a standardized process to verify vendor eligibility by: 5.2.1 Checking the System for Award Management (SAM.gov) exclusion list. 5.2.2 Retaining a copy of the verification record or certification in the procurement or vendor file. 5.2.3 Incorporating a suspension/debarment verification clause into agreements, contracts, authorizations for purchase, and purchase orders. 5.3 Ongoing Monitoring: Establish a control to periodically re-verify vendor status at least annually to identify changes in eligibility after the initial onboarding. 5.4 Training and Accountability: Provide training to all fiscal staff on: 5.4.1 Federal suspension and debarment requirements. 5.4.2 Verification methods and documentation expectations. 5.4.3 Proper retention of evidence. 5.4.4 Compliance Reviews: Implement periodic internal compliance reviews to ensure continued adherence to suspension and debarment verification requirements. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

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Finding 1165614 (2024-240)

Material Weakness 2024

State of Idaho

ID

Procurement, Suspension & Debarment § 200.303 § 200.317

Finding 2024-240: The Division is not following Idaho Administrative Rules for Purchasing as required by federal requirements. Related to Prior Finding: N/A Agency’s view: Agree 4.1 Corrective Action Plan: Policy Alignment: Review and revise internal procurement policies and procedures to align with...

Finding 2024-240: The Division is not following Idaho Administrative Rules for Purchasing as required by federal requirements. Related to Prior Finding: N/A Agency’s view: Agree 4.1 Corrective Action Plan: Policy Alignment: Review and revise internal procurement policies and procedures to align with IDAPA 38.05.01, 2 CFR 200.317, and 2 CFR 200.303 requirements. 4.2 Training and Awareness: Provide training to all staff to ensure understanding of: 4.2.1 Purchasing thresholds and categories (small, informal, and formal purchases). 4.2.2 Documentation and approval requirements. 4.2.3 Process and documentation requirements for purchases requiring exemptions. 4.3 Internal Control Strengthening: Develop and implement internal control mechanisms to ensure compliance with State and Federal purchasing requirements. 4.4 Monitoring and Accountability: Establish a quality assurance and compliance monitoring process to perform monitoring of procurement transactions to verify compliance with Division policies and procedures. Anticipated Corrective Action Date: 06/30/2026 Responsible for Corrective Action: Contracts and Vendor Relations Officer, To be Hired Position Oversight: MiKayla Monaghan, Internal Operations and Stakeholder Relations Manager

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Finding 1165613 (2024-239)

Material Weakness 2024

State of Idaho

ID

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

Finding 2024-239: The Division does not have documented control procedures in place to ensure compliance with period of performance requirements for the Rehabilitation Services-Vocational Rehabilitation Grants to States. Related to Prior Finding: N/A Agency’s view: Agree 3.1 Corrective Action Plan: ...

Finding 2024-239: The Division does not have documented control procedures in place to ensure compliance with period of performance requirements for the Rehabilitation Services-Vocational Rehabilitation Grants to States. Related to Prior Finding: N/A Agency’s view: Agree 3.1 Corrective Action Plan: Document Control Procedures: Develop and implement formal, written procedures (Grants Management Manual Chapter) for verifying that expenditures are assigned to the correct period of performance in both Aware and Luma. 3.2 Training: Train IDVR team members on policies and procedures tied to Period of Performance. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

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Finding 1165612 (2024-238)

Material Weakness 2024

State of Idaho

ID

Matching / Level of Effort / Earmarking § 200.303

Finding 2024-238: The Division did not comply with Matching, Level of Effort, and Earmarking requirements for the fiscal year 2022 Rehabilitation Services-Vocational Rehabilitation Grants to States program. Related to Prior Finding: N/A Agency’s view: Agree 2.1 Corrective Action Plan: Develop and Im...

Finding 2024-238: The Division did not comply with Matching, Level of Effort, and Earmarking requirements for the fiscal year 2022 Rehabilitation Services-Vocational Rehabilitation Grants to States program. Related to Prior Finding: N/A Agency’s view: Agree 2.1 Corrective Action Plan: Develop and Implement Written Policy (Grants Management Manual Section) and Procedures: Establish documented procedures for monitoring and validating compliance with state match funds, maintenance of effort (MOE), and earmarking requirements for each active RSA grant. 2.2 Training and Staff Accountability: Train fiscal and leadership staff responsible on grant calculation methods, documentation standards, and compliance monitoring for matching and level of effort requirements. 2.3 Ongoing Monitoring: Conduct annual compliance reviews before report submission to verify that all level of effort and earmarking requirements are satisfied and adequately supported. Anticipated Corrective Action Date 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

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Finding 1165611 (2024-237)

Material Weakness 2024

State of Idaho

ID

Internal Control / Segregation of Duties Material Weakness Reporting § 200.302 § 200.303

Finding 2024-237: The Division could not provide supporting documentation for amounts reported on the Rehabilitation Services Administration (RSA) reports required under the Rehabilitation Services- Vocational Rehabilitation Grants to States. Related to Prior Finding: N/A Agency’s view: Agree 1.1 Co...

Finding 2024-237: The Division could not provide supporting documentation for amounts reported on the Rehabilitation Services Administration (RSA) reports required under the Rehabilitation Services- Vocational Rehabilitation Grants to States. Related to Prior Finding: N/A Agency’s view: Agree 1.1 Corrective Action Plan: Establish Accurate Reporting Procedures: Develop and implement procedures for preparing, reviewing, and approving all RSA financial reports, including step-by-step reconciliation. 1.2 Ensure Documentation and Audit Trail: Maintain comprehensive supporting documentation for all amounts reported, including detailed reconciliations, adjustments, and source data, in accordance with requirements for traceable and verifiable records. 1.3 Strengthen Internal Controls and Oversight: Implement Strategic Leadership review of all reports prior to submission to the Rehabilitation Services Administration to confirm data accuracy and compliance with reporting requirements. 1.4 Complete a Restatement of RSA-17 Reports: Review previously submitted RSA-17 reports for fiscal years 2022–2024, determine accurate expenditure amounts, and coordinate with RSA to correct and resubmit revised reports, if necessary. Anticipated Corrective Action Date: 04/01/2026 Responsible for Corrective Action: Eric Bjork, Fiscal Officer

View Audit 376229

Finding 1165610 (2024-236)

Material Weakness 2024

State of Idaho

ID

Internal Control / Segregation of Duties Reporting § 200.303

Finding 2024-236: The review and approval of quarterly special reports for the Unemployment Insurance (UI) program were not consistently documented, and the reports were submitted after the required deadline. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The department h...

Finding 2024-236: The review and approval of quarterly special reports for the Unemployment Insurance (UI) program were not consistently documented, and the reports were submitted after the required deadline. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The department has taken measures to ensure proper documentation of the review process: Step 1: Provide a designated place on the UI-3 back-up documentation and quarterly report work papers for reviewer to sign off directly in the work papers. Step 2: The individual who enters the report into the federal system will not proceed with entering the report into the system unless the workpapers have the review and approval in the workpapers. The department is taking several steps to provide for a faster month-end close: Step 3: Process Mapping of Cost Accounting Closing a. As part of our strategic planning initiative, document the new closing process in Luma through process maps b. Review process maps internally in accounting and with executive leadership to help identify areas where efficiencies could be achieved c. Implement identified areas of efficiency Step 4: Assess potential for expedited close on quarter-end months a. Cost Accounting manager, supervisor and financial executive officer to review calendar and timing of payroll for quarter-end closings b. Cost Accounting manager, supervisor, and financial executive officer to develop plans for expedited close with potential for overtime, pulling additional resources from other teams and any other options that may help shorten the close period to allow us to file quarterly federal reports timely. Anticipated Corrective Action Date: Step 1. – Add sign-off field to UI-3 workpapers • Completed June 30, 2025 Step 2 – File UI-3 reports only once review is properly captured • Completed June 30, 2025 Step 3.a. – Create cost accounting closing process maps • Completed August 31, 2025 Step 3. b. – Meet with executive staff to review and identify potential efficiencies • Completed September 30, 2025 Step 3. c. – Implement process improvements • To be completed by December 31, 2025 Step 4. a. – Meet to review payroll and closing calendar for quarter-ends and develop plan to overcome calendar issues • Completed November 5, 2025 Step 4. b. – Implement plan to overcome calendar issues • Begin implementing with December 31, 2025, quarter close (January 2026) Responsible for Corrective Action: Carrie Peterman. (208) 696-2533. Carrie.peterman@labor.idaho.gov 317 W. Main Street, Boise, ID 83735

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Finding 1165608 (2024-235)

Material Weakness 2024

State of Idaho

ID

Internal Control / Segregation of Duties Reporting § 200.303

Finding 2024-235: Quarterly financial reports for the Social Security Disability (DI) grant were submitted after the required deadline. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The department is taking several steps to provide for a faster month-end close: Step 1: P...

Finding 2024-235: Quarterly financial reports for the Social Security Disability (DI) grant were submitted after the required deadline. Related to Prior Finding: N/A Agency’s view: Agree Corrective Action Plan: The department is taking several steps to provide for a faster month-end close: Step 1: Process Mapping of Cost Accounting Closing a. As part of our strategic planning initiative, document the new closing process in Luma through process maps b. Review process maps internally in accounting and with executive leadership to help identify areas where efficiencies could be achieved c. Implement identified areas of efficiency Step 2: Assess potential for expedited close on quarter-end months a. Cost Accounting manager, supervisor and financial executive officer to review calendar and timing of payroll for quarter-end closings b. Cost Accounting manager, supervisor, and financial executive officer to develop plans for expedited close with potential for overtime, pulling additional resources from other teams and any other options that may help shorten the close period to allow us to file quarterly federal reports timely. Anticipated Corrective Action Date: Step 1. a. – Create cost accounting closing process maps • Completed August 31, 2025 Step 1. b. – Meet with executive staff to review and identify potential efficiencies • Completed September 30, 2025 Step 1. c. – Implement process improvements • To be completed by December 31, 2025 Step 2. a. – Meet to review payroll and closing calendar for quarter-ends and develop plan to overcome calendar issues • Completed November 5, 2025 Step 2. b. –Implement plan to overcome calendar issues • Begin implementing with December 31, 2025, quarter close (January 2026) Responsible for Corrective Action: Carrie Peterman. (208) 696-2533. Carrie.peterman@labor.idaho.gov 317 W. Main Street, Boise, ID 83735

View Audit 376229

Finding 1165607 (2024-234)

Material Weakness 2024

State of Idaho

ID

Matching / Level of Effort / Earmarking Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303

Finding 2024-234: Payroll adjustments lacked sufficient internal controls. Agency’s View: The Department Agrees with this Finding Corrective Action: The department has established internal controls to ensure appropriate separation of duties and proper documentation of all reviews. When an accounting...

Finding 2024-234: Payroll adjustments lacked sufficient internal controls. Agency’s View: The Department Agrees with this Finding Corrective Action: The department has established internal controls to ensure appropriate separation of duties and proper documentation of all reviews. When an accounting adjustment is required, staff prepare the adjustment using either an Infor Spreadsheet Designer (ISD) template or an Excel template. ISD is used for adjustments involving large volumes of data. Because ISD-generated adjustments cannot be reviewed within the system after entry, the completed template is sent to a Financial Specialist Principal (or higher) for review prior to upload. Email approval is obtained and attached to the adjustment record when it is entered into the system. For adjustments involving smaller amounts of data, staff use the Excel template. The Excel template, original GL lines, supporting documentation, and any other relevant information are attached when the adjustment is entered. After the manual adjustment is submitted, it is automatically routed to a Financial Specialist Principal (or higher) for approval before final posting. These procedures ensure that all adjustments undergo an independent review and that documentation is consistently maintained. Anticipated Corrective Action Date: Completed July 31, 2024 Responsible for Corrective Action: Magnum Forkner, Financial Manager magnum.forkner@dhw.idaho.gov 208-332-7241

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Finding 1165598 (2024-233)

Material Weakness 2024

State of Idaho

ID

Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties § 200.303

Finding 2024-233: The submission of a Child Care and Development Fund (CCDF) financial report was not completed timely. Agency’s View: The Department Agrees with this Finding Corrective Action: The Department has seen an increased time commitment related to financial grant reporting since the implem...

Finding 2024-233: The submission of a Child Care and Development Fund (CCDF) financial report was not completed timely. Agency’s View: The Department Agrees with this Finding Corrective Action: The Department has seen an increased time commitment related to financial grant reporting since the implementation of Luma in July 2023. This was particularly relevant in SFY 2024 as Luma implementation, training and interfaces were still evolving, resulting in a tremendous increase in time commitments without the corresponding staff increases needed. In many cases, this resulted in late filings and/or filing reports that were not reviewed in sufficient detail. The Division of Financial Services continues to work through the inefficiencies encountered and design processes that include sufficient review and other internal controls while also allowing for timely completion of required reports. One FTE was transferred from another team to the Cash and Grants team. This position is expected to assist in completing preliminary tasks so that Grant Reporters have necessary data at their fingertips when drafting financial reports. As Department staff continue to learn nuances of the Luma system, both accuracy and timeliness of financial reporting is expected to improve. Anticipated Corrective Action Date: 6/30/2026 Responsible for Corrective Action: Dena Darpli, Financial Manager dena.darpli@dhw.idaho.gov 208-334-4909

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Finding 1165596 (2024-232)

Material Weakness 2024

State of Idaho

ID

Matching / Level of Effort / Earmarking § 200.303

Finding 2024-232: An incorrect Federal Medical Assistance Percentage (FMAP) rate was applied while calculating the federal and state share of expenditures for the Child Care and Development Fund (CCDF) financial report resulting in an understatement of $1,064,932 of the federal share of costs. Agenc...

Finding 2024-232: An incorrect Federal Medical Assistance Percentage (FMAP) rate was applied while calculating the federal and state share of expenditures for the Child Care and Development Fund (CCDF) financial report resulting in an understatement of $1,064,932 of the federal share of costs. Agency’s View: The Department Agrees with this Finding Corrective Action: The Department's Grant Reporting team has been developing additional internal controls to put in place with the utilization of the Luma ERP. These controls include conducting reconciliations between internal workpapers and Luma records as well as reconciling to external parties such as the Payment Management System. This has streamlined our approach and has allowed management more opportunity to review items with higher risk factors, such as the quarterly change in FMAP rates during the stepdown from enhanced FMAP rates during COVID. We believe these increased focused efforts will alleviate issues like this in the future and are ongoing as the Department identifies opportunities for advancements in our own processes and working with SCO to implement better Luma reports and controls within the grant reconciliation process. Anticipated Corrective Action Date: 6/30/2026 Responsible for Corrective Action: Dena Darpli, Financial Manager dena.darpli@dhw.idaho.gov 208-334-4909

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