Finding Number 2024-031 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action OKDHS agrees that certain administrative errors identified through program reviews and audit activities, including confirmed payment calculation errors, eligibilit...
Finding Number 2024-031 Subject Heading (Financial) or AL no. and program name (Federal) 93.575 – CCDF Cluster Planned Corrective Action OKDHS agrees that certain administrative errors identified through program reviews and audit activities, including confirmed payment calculation errors, eligibility determination issues, attendance verification deficiencies, and provider noncompliance, require corrective action. The Agency has initiated reviews and recovery efforts for confirmed overpayments and instances of provider noncompliance and continues to strengthen monitoring, award calculations, documentation requirements, and recovery procedures for provider assistance programs. However, OKDHS respectfully disagrees with several conclusions contained within this finding, including the characterization of questioned costs, the treatment of unsupported expenditures as unallowable expenditures, the attribution of provider actions directly to the Agency, the extrapolation methodology, and conclusions regarding the overall design and effectiveness of the Desert Grant Program. The Desert Grant Program was developed using emergency American Rescue Plan Act (ARPA) funding to rapidly increase child care capacity in underserved areas of Oklahoma within federally established obligation and liquidation deadlines. As previously communicated to the Administration for Children and Families (ACF), the applicable Notice of Award expressly excluded substantial portions of the traditional federal grant administration requirements, including most pre-award requirements, most post-award requirements, and the federal cost principles. Accordingly, OKDHS does not concur that the program should be evaluated using the same framework applicable to traditional federal grant programs or that retrospective disagreement with the program's design, funding methodology, or implementation strategy constitutes evidence of noncompliance. The Agency further does not concur with the treatment of unsupported expenditures as equivalent to unallowable expenditures. Providers receiving Desert Grant funding certified that grant funds would be used only for allowable purposes, agreed to maintain supporting documentation, and acknowledged their obligation to repay funds if they failed to comply with program requirements. While the absence of documentation during audit testing may warrant additional review, it does not independently establish that funds were expended for unallowable purposes. Likewise, the closure of a provider or other post-award business outcomes do not, by themselves, establish misuse of grant funds or Agency noncompliance. The Agency continues to evaluate these cases individually and pursue recovery when the facts demonstrate noncompliance with the terms of the award. OKDHS also respectfully disagrees with conclusions regarding the overall effectiveness or sustainability of the Desert Grant Program. The audit contains numerous observations regarding alternative funding methodologies, incremental payment structures, business planning considerations, sustainability assumptions, and other program design decisions. While these observations may identify opportunities for future program improvement, they represent differences in program design philosophy rather than evidence that the Agency failed to administer the federal award in accordance with applicable requirements. The Agency does not believe retrospective assessments regarding how the program could have been structured differently constitute a basis for questioned costs. Finally, OKDHS does not concur with the extrapolation methodology reflected in this finding. The questioned costs combine fundamentally different exception types, including confirmed administrative errors, unsupported expenditures, provider documentation deficiencies, provider closures, provider spending decisions, and observations regarding program design. These categories arise from different causes, involve different responsibilities, and require different corrective actions. Accordingly, OKDHS does not believe combining these distinct exception types into a single projected questioned cost accurately reflects actual noncompliance or federal exposure associated with the program. Although the Agency respectfully disagrees with significant portions of the finding, OKDHS has strengthened oversight of provider assistance initiatives by enhancing award calculations, documentation expectations, provider certifications, monitoring activities, analytical review procedures, and recovery processes. The Agency will continue reviewing Desert Grant awards, recovering confirmed overpayments and unallowable expenditures where appropriate, and incorporating lessons learned into future program implementation. Anticipated Completion Date On Going Responsible Contact Person Kayla Urtz