Corrective Action Plans

Finding 47845 (2022-003)

Significant Deficiency 2022

Multi-Ethnic Collaborative of Community Agencies

CA

Significant Deficiency

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021,...

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021, a full-service payroll and HR company was brought on to support MECCA in meeting all regulatory requirements, which began processing MECCA?s payroll in February 2022 and began working with the Operations and Administration Coordinator to do an internal HR audit in March and April of 2022. As of February 2022, all new employees were on boarded in compliance with all relevant regulatory requirements. And as of January 2023, all active employee files were complete with necessary documentation. In addition to the above corrective action, in April 2022, MECCA?s then Finance Manager implemented a Time and Effort policy and conducted a Time Survey to capture the staff time spent on programs. From May 2022 to September 2022, MECCA required staff to recertify time allocations quarterly. Starting October 2022, MECCA staff certify their time and effort allocations monthly. MECCA conducts the Time Survey annually, and the current Finance and Operations Director is responsible for ensuring staff Time and Effort is properly captured. The then Executive Director and the then Director of Operations and Program Administration were responsible for ensuring the corrective actions were implemented. In 2023, MECCA's Current Executive Director will be responsible for ensuring compliance to all relevant regulatory requirements. The Executive Director serves as the organizational HR supervisor and is responsible for working with and overseeing the payroll and HR company to ensure that onboarding, proper documentation, timekeeping, payroll, and any HR updates or pay rate changes are done for compliance. Name of Contact Person Responsible for Corrective Action Plan: Yesenia Ochoa, Executive Director Anticipated Completion Date: January 31, 2023

View Audit 49291

Finding 47843 (2022-002)

Significant Deficiency 2022

Multi-Ethnic Collaborative of Community Agencies

CA

Significant Deficiency

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021,...

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021, a full-service payroll and HR company was brought on to support MECCA in meeting all regulatory requirements, which began processing MECCA?s payroll in February 2022 and began working with the Operations and Administration Coordinator to do an internal HR audit in March and April of 2022. As of February 2022, all new employees were on boarded in compliance with all relevant regulatory requirements. And as of January 2023, all active employee files were complete with necessary documentation. In addition to the above corrective action, in April 2022, MECCA?s then Finance Manager implemented a Time and Effort policy and conducted a Time Survey to capture the staff time spent on programs. From May 2022 to September 2022, MECCA required staff to recertify time allocations quarterly. Starting October 2022, MECCA staff certify their time and effort allocations monthly. MECCA conducts the Time Survey annually, and the current Finance and Operations Director is responsible for ensuring staff Time and Effort is properly captured. The then Executive Director and the then Director of Operations and Program Administration were responsible for ensuring the corrective actions were implemented. In 2023, MECCA's Current Executive Director will be responsible for ensuring compliance to all relevant regulatory requirements. The Executive Director serves as the organizational HR supervisor and is responsible for working with and overseeing the payroll and HR company to ensure that onboarding, proper documentation, timekeeping, payroll, and any HR updates or pay rate changes are done for compliance. Name of Contact Person Responsible for Corrective Action Plan: Yesenia Ochoa, Executive Director Anticipated Completion Date: January 31, 2023

View Audit 49291

Finding 47842 (2022-001)

Significant Deficiency 2022

Multi-Ethnic Collaborative of Community Agencies

CA

Allowable Costs / Cost Principles Significant Deficiency

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021,...

Views of Responsible Officials and Planned Corrective Actions: Prior to the FYE 2021 audits, MECCA had identified issues regarding the proper maintenance and review of payroll records and corrective action was taken in November 2021 by the Operations and Administration Coordinator. In November 2021, a full-service payroll and HR company was brought on to support MECCA in meeting all regulatory requirements, which began processing MECCA?s payroll in February 2022 and began working with the Operations and Administration Coordinator to do an internal HR audit in March and April of 2022. As of February 2022, all new employees were on boarded in compliance with all relevant regulatory requirements. And as of January 2023, all active employee files were complete with necessary documentation. In addition to the above corrective action, in April 2022, MECCA?s then Finance Manager implemented a Time and Effort policy and conducted a Time Survey to capture the staff time spent on programs. From May 2022 to September 2022, MECCA required staff to recertify time allocations quarterly. Starting October 2022, MECCA staff certify their time and effort allocations monthly. MECCA conducts the Time Survey annually, and the current Finance and Operations Director is responsible for ensuring staff Time and Effort is properly captured. The then Executive Director and the then Director of Operations and Program Administration were responsible for ensuring the corrective actions were implemented. In 2023, MECCA's Current Executive Director will be responsible for ensuring compliance to all relevant regulatory requirements. The Executive Director serves as the organizational HR supervisor and is responsible for working with and overseeing the payroll and HR company to ensure that onboarding, proper documentation, timekeeping, payroll, and any HR updates or pay rate changes are done for compliance. Name of Contact Person Responsible for Corrective Action Plan: Yesenia Ochoa, Executive Director Anticipated Completion Date: January 31, 2023

View Audit 49291

Finding 47837 (2022-005)

Significant Deficiency 2022

City of Dayton, Tennessee

TN

Reporting

2022-005: Improper Controls over Grant Transactions Condition: The City does not maintain grant files in a systematic manner to identify grant activity within the City?s General Fund, Water and Sewer Fund, Electric Fund, or Sanitation funds. Grant files did not include a reconciliation of grant re...

2022-005: Improper Controls over Grant Transactions Condition: The City does not maintain grant files in a systematic manner to identify grant activity within the City?s General Fund, Water and Sewer Fund, Electric Fund, or Sanitation funds. Grant files did not include a reconciliation of grant revenue, expenses, or related deposit and retainage accounts to the general ledger or to the Schedule of Expenditures of Federal and State Awards. This weakness in the current system resulted in grants not identified initially, necessitating numerous revisions and corrections to the Schedule of Expenditures of Federal and State Awards regarding specific identification and names of grants with the associated Catalog of Federal Domestic Assistance (CFDA) number, pass-through number and placement of the grant as a Federal or State grant. Ultimately, City personnel responsible for preparation did not adequately prepare the Schedule of Expenditures of Federal and State Awards. Criteria: Uniform Guidance requires that systematic proper supporting documentation be maintained for grant activity. The Uniform Guidance also dictates that the City is responsible for preparing the Schedule of Expenditures of Federal and State Awards. Cause: Controls do not exist which require all grant information to be documented, reconciled and maintained in an orderly fashion to support grant activity. Effect: Grants could be improperly reported without proper controls. In addition, compliance issues could arise due to lack of controls. Recommendation: We recommend proper controls be established for gathering, naming, identifying, reconciling and maintaining grant documentation. This documentation should be the basis for preparation of the Schedule of Expenditures of Federal and State Awards and support all aspects of grant reconciliation, administration and compliance. Management Response: The current process for grant controls is being re-evalutated to develop stronger controls for gathering, naming, identifying, reconciling and maintaining all grant documents.

View Audit 49287

Finding 47836 (2022-001)

Material Weakness 2022

City of Dayton, Tennessee

TN

Reporting Internal Control / Segregation of Duties

2022-001: Inadequate Controls over Preparation of Financial Statements Condition: The City currently does not prepare financial statements under generally accepted accounting principles. The external auditors prepare the statements and disclosures and management approves and takes responsibility f...

2022-001: Inadequate Controls over Preparation of Financial Statements Condition: The City currently does not prepare financial statements under generally accepted accounting principles. The external auditors prepare the statements and disclosures and management approves and takes responsibility for the statements after they are prepared. Criteria: Accounting standards dictate that management is responsible for preparation of the financial statements. An audit of the financial statements of an organization requires the evaluation of the internal control system?s design of controls in generating and overseeing of the financial statements to be audited. The organization must have the ability to prepare and evaluate the financial statements? format, content, and disclosures in accordance with generally accepted accounting principles and recognize any material items missing in the financial statements through the organization?s control system. This is true whether the organization prepares the financial statements or not. These controls can be established or achieved by use of a third party organization or internally, but external auditors are never considered a control element. Cause: The City believes its current reporting meets all of the City?s internal needs. While management knows their responsibility for understanding and presenting the annual financial statements, they do not believe it is currently cost beneficial to design and/or strengthen controls over the accounting departments financial reporting process. Effect: The City does not have proper controls over financial statements preparation. Recommendation: We recommend the City continue to monitor the need, costs, and benefits of developing a control structure to oversee the preparation of financial statements in accordance with generally accepted accounting principles. Management Response: The City feels we meet our internal needs and it is not cost beneficial to hire a third party to prepare the financial statements.

View Audit 49287

Finding 47835 (2022-001)

Material Weakness 2022

Community Health Center of Central Missouri

MO

Questioned Costs Allowable Costs / Cost Principles Reporting

During the 2022 audit of Community Health Center of Central Missouri, our auditors found two instances of the PRF calculation being calculated incorrectly. The two instances were: 1) Lost revenue was calculated on a quarterly basis using post-date instead of date of service which resulted in a ne...

During the 2022 audit of Community Health Center of Central Missouri, our auditors found two instances of the PRF calculation being calculated incorrectly. The two instances were: 1) Lost revenue was calculated on a quarterly basis using post-date instead of date of service which resulted in a negative patient service revenue balance in self pay during 2020 Quarter 1-Quarter 3 2) Lost revenue was calculated without consideration of Medicaid cost report settlement and incentive revenue. This has resulted in a finding in the current year financial statements audit. Management has evaluated the finding and reviewed whether any funds need to be repaid and evaluated its controls around future provider relief reporting cycles. It has been determined that even with the two errors identified lost revenues would have been sufficient to obligate the entire award. Therefore, we have determined no repayment is necessary. If allowed in future provider relief reporting periods, Community Health Center of Central Missouri will correct the misreporting. Toby Barnett, Chief Financial Officer, is the party that has overall responsibility for this corrective action. The anticipated completion date is unknown at this time due to reporting portal for period 1 being closed. It is unknown if HHS will allow corrections to period 1 reports.

View Audit 41964 Questioned Costs: $1

Finding 47834 (2022-002)

Significant Deficiency 2022

Morrow County

OH

Cash Management Reporting Matching / Level of Effort / Earmarking § 200.208 § 200.305

Finding Number Planned Corrective Action Anticipated Completion Date Responsible Contact Person 2022-001 We will continue to discuss and review the issue with our GAAP converter to make sure adjustments are properly made to the financial statements. May 31, 2023 County Auditor 2022-002 We ...

Finding Number Planned Corrective Action Anticipated Completion Date Responsible Contact Person 2022-001 We will continue to discuss and review the issue with our GAAP converter to make sure adjustments are properly made to the financial statements. May 31, 2023 County Auditor 2022-002 We will implement procedures to ensure all quarterly reports are submitted timely under this grant. December 31, 2023 Director of Morrow County Job and Family Services and Morrow County Area Transit

View Audit 46816

Finding 47832 (2022-001)

Significant Deficiency 2022

Collaborative for Children

TX

Equipment & Real Property Management Matching / Level of Effort / Earmarking Special Tests & Provisions

Finding #2022-001 ? Significant Deficiency and Other Noncompliance Applicable federal program: U. S. Department of Health and Human Services Passed through Houston-Galveston Area Council Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Developme...

Finding #2022-001 ? Significant Deficiency and Other Noncompliance Applicable federal program: U. S. Department of Health and Human Services Passed through Houston-Galveston Area Council Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Development Fund Assistance Listing #: 93.575/93.596 Contract Numbers: 301-22, 301-23 Contract Years: 10/01/21 ? 09/30/22, 10/01/22 ? 12/31/22 Recommendation: Re-emphasize CFC?s policies and procedures related to equipment and real property purchased under the contracts. Planned corrective action: During staff training, we have clearly stated the requirement for a physical inventory to be performed annually. To ensure that a physical inventory is performed in accordance with written policies and procedures, we have taken the following measures: ? Designated a responsible person to oversee the physical inventory process. ? Created a checklist of steps to be followed during the physical inventory process. ? Trained staff on how to perform the physical inventory process. Responsible officer: Chief Financial Officer, Alisa Ealy Estimated completion date: September 30, 2023

View Audit 45789

Finding 47827 (2022-057)

Significant Deficiency 2022

State of Oregon

OR

Eligibility Special Tests & Provisions Significant Deficiency

2022-057 Department of Human Services/Oregon Health Authority Improve documentation for provider eligibility determinations and revalidations Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award ...

2022-057 Department of Human Services/Oregon Health Authority Improve documentation for provider eligibility determinations and revalidations Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 2105OR5MAP, 2021; 2105OR5ADM, 2021; 2205OR5MAP, 2022; 2205OR5ADM, 2022 Compliance Requirement: Special Tests and Provisions Type of Finding: Significant Deficiency Prior Year Finding: 2021-020 Questioned Costs: N/A Criteria: 42 CFR 455.436; 42 CFR 455.102 to 455.107; 42 CFR 455.414 Provider eligibility requirements for the Medicaid program differ depending upon the type of services provided; however, all providers are subject to specified database checks and are required to sign an adherence to federal regulations agreement (agreement). Typically, the agreement includes disclosures specifically required by federal regulations. Additionally, the federal regulations require that the Oregon Health Authority (authority) and Department of Human Services (department) determine eligibility for Medicaid providers and revalidate providers at least every five years by performing database checks to ensure providers are still eligible to participate in the Medicaid program. We selected a random sample of 62 providers in the Medicaid program with 32 providers enrolled by the authority and 30 enrolled by the department. For 4 providers we found the issues described below. I-9 form for 1 department provider could not be located. This provider is not currently a provider with the State and an updated I-9 will not be obtained. Based on our review of other available support we were able to determine this to be an eligible provider during the fiscal year. I-9 form for 1 department provider could not be located. The department has since obtained a completed I-9 form. I-9 forms for 2 department providers did not include a review of minimum acceptable documents to verify identity and employment authorization. The department is actively working to obtain missing documentation and based on our review of other available support we were able to determine these to be eligible providers during the fiscal year. The above issues occurred due to human error and inadequate record maintenance which could lead to ineligible providers receiving Medicaid funding. We recommend department management strengthen controls to ensure documentation supporting a provider?s eligibility determination and revalidation is complete. MANAGEMENT RESPONSE: We agree with this recommendation. ODDS Response: The department is committed to having completed I-9 forms on file for all Personal Support Workers through our Fiscal Intermediary. The Provider Enrollment Unit now has a quality assurance staff who will conduct spot checks of the FI work. This is in process now and reviews will continue. APD Response: The department is committed to having completed I-9 forms on file for all employees and homecare workers. This expectation, as it relates to homecare workers, was reinforced by the department at the Client Employment Program Annual Summit held on 3/28/23 and 3/29/23. This Summit was attended by approximately 160 local office staff. Local office staff were instructed on how to properly fill out the I-9 form and retention requirements. Staff were also reminded of resources available to answer questions, including central office points of contact. The department is also exploring short- and long-term solutions to mitigate this risk, including creating a peer review process on business procedures across the state intended to assist in not only accuracy, but knowledge transfer, developmental growth and mentoring opportunities. The department may also explore system changes that would automatically validate the completion of tasks related to provider enrollment and renewals, including the presence of required documentation. Anticipated Completion Date: June 1, 2023 Contact: Vanessa Richkind, ODDS Provider Administration Manager or Diana Nott, APD Provider Relations Unit Manager

View Audit 45093

Finding 47825 (2022-001)

Material Weakness 2022

Lancaster City School District

OH

Subrecipient Monitoring Matching / Level of Effort / Earmarking Special Tests & Provisions

CORRECTIVE ACTION PLAN 2 CFR ? 200.511(c) JUNE 30, 2022 Finding Number: 2022-001 Planned Corrective Action: In the summer of 2022, during a Monitoring Review performed by ODE of ESSER II funds, the District became aware of the specific requirements/documentation necessary for contracts let with fed...

CORRECTIVE ACTION PLAN 2 CFR ? 200.511(c) JUNE 30, 2022 Finding Number: 2022-001 Planned Corrective Action: In the summer of 2022, during a Monitoring Review performed by ODE of ESSER II funds, the District became aware of the specific requirements/documentation necessary for contracts let with federal ESSER funds. School Districts are usually not required to pay prevailing wages (state/local funds). The District had not used federal funds for construction in the past and was unaware of the requirement. Due to using an architect firm for the HVAC and window projects that were familiar with the requirements, the District had paid prevailing wage and had the required Davis-Bacon documentation for two of the three projects spent out of ESSER funds. The remaining project was in the amount of $46,870 for Locker Room Floor Renovations at the High School. The District was not aware of the Davis-Bacon requirements when the Business Manager originally contacted Kiefer in 2020 about the rubber flooring (no guidance was available). Due to COVID and delays in materials, the project was pushed back and this requirement was not reconsidered. District Administration has been made aware of the requirements using Federal ESSER funds going forward. In addition, the District policy (DJF) regarding purchasing procedures, that did not specifically include Davis-Bacon language, was updated to include Davis-Bacon requirements (Board approved 9/27/22). Further, the District intends to closely follow internal controls pertaining to federal grant management in order to prevent future issues as described in Finding 2022-001. Anticipated Completion Date: 09/27/22 Responsible Contact Person: Julie Taylor, Treasurer

View Audit 41547

Finding 47824 (2022-056)

None 2022

State of Oregon

OR

Questioned Costs Allowable Costs / Cost Principles

2022-056 Department of Human Services/Oregon Health Authority Return questioned costs related to 2019-014 audit finding Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 18...

2022-056 Department of Human Services/Oregon Health Authority Return questioned costs related to 2019-014 audit finding Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 1805OR5MAP, 2018; 1805OR5ADM, 2018; 1905OR5MAP, 2019; 1905OR5ADM, 2019 Compliance Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Noncompliance Prior Year Finding: 2019-014 Questioned Costs: $348,080 (known) Criteria: 42 CFR 433.32(a); 42 CFR 433.312(a); 42 CFR 447.45(f)(1)(iv) During our testing for the fiscal year 2019 we noted that the MMIS data tables did not agree to the rates established by CMS for 2 procedures codes. Using incorrect rates resulted in an overpayment of $348,080 to providers. This overpayment was first reported in the fiscal year-end June 30, 2019, Secretary of State audit report number 2020-14, finding number 2019-014. As of January 1, 2020, management updated the MMIS data tables to ensure all future provider payments were made at the correct rate. Additionally, management updated control procedures to ensure MMIS data tables are updated timely and accurately. However, as of May 1, 2023, the overpayment to providers has not been collected, federal funds have not been returned, and the planned repayment method has not been approved by CMS. Per authority management they plan to let these overpayments run through their cost settlement process which would be an unusual method to return federal funds. We recommend authority management reimburse the federal agency for unallowable costs. MANAGEMENT RESPONSE: We agree with this recommendation. As indicated in the report and as of January 1, 2020, authority management updated the MMIS data tables to ensure all future provider payments were made at the correct rate. Additionally, authority management updated control procedures to ensure MMIS data tables are updated timely and accurately. The recoupment of funds paid for incorrect rates will be completed through the FFS cost settlement process. We expect to have this completed on or before June 30, 2024. We will evaluate the use of alternate recoupment processes in the event of future corrections. Anticipated Completion Date: June 30, 2024 Contact: Mick Mitchell, Business Operations Manager

View Audit 45093 Questioned Costs: $1

Finding 47823 (2022-055)

Significant Deficiency 2022

State of Oregon

OR

Questioned Costs Allowable Costs / Cost Principles § 200.1 § 200.400 § 200.404

2022-055 Department of Human Services/Oregon Health Authority Strengthen review over direct costs charged to the program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 2...

2022-055 Department of Human Services/Oregon Health Authority Strengthen review over direct costs charged to the program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 2105OR5MAP, 2021; 2105OR5ADM, 2021; 2205OR5MAP, 2022; 2205OR5ADM, 2022 Compliance Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $47,942 (known) Criteria: 2 CFR 200.1(1); 2 CFR 200.400(a); 2 CFR 200.404; 42 CFR ? 433.32(a) Federal regulations only allow the Medicaid program to charge allowable program expenditures at the federal financial participation rate for various program costs at the time of payment for services provided. The Department of Human Services (department) and the Oregon Health Authority (authority) make payments to vendors other than providers through the state?s accounting system. We judgmentally selected payments to 28 vendors for our review. We identified the following 2 errors, which were not identified during their review process, that resulted in improper payment of Medicaid expenditures: Payments to one vendor charged expenditures related to a specific project unrelated to the Medicaid program, resulting in known federally funded questioned costs of $1,361. For one payment management was unable to provide a contract or support for bids collected for the project charged to the Medicaid program, resulting in known federally funded questioned costs of $46,581. The above issues occurred due to human error and inadequate record maintenance which could lead to unallowed activities/costs being charged to the Medicaid program. We recommend department and authority management strengthen controls over review to ensure transactions are adequately supported and reviewed. Additionally, we recommend the authority reimburse the federal agency for unallowable costs. MANAGEMENT RESPONSE: We agree with this recommendation. ODHS Facilities Management Response for Finding #1: The Office of Facilities Management (OFM) is committed to providing accurate coding for payments. Communications have been made with staff responsible for coding invoices and the need to conduct thorough reviews to ensure coding is accurate and charged to the appropriate funding source for the goods or services the agency is being invoiced for. OFM will be communicating with the programs that provide coding to confirm that the information provided appropriately aligns with the intended use of the funds. The department will review current processes and forms to ensure there is sufficient detail to verify accuracy. Questioned costs of $1,361 in Federal Funds (and $2,722 in Total Funds) paid with invoice number VP815455, was corrected on 4/26/2023 with document BTCL1412. ODHS, Aging and People with Disabilities (APD) Response for Finding #2: The department is committed to storing and retaining supporting documentation for all authorized payments. The processes and procedures on contract bidding and approval associated with payment authorization for 1915k services and support are being reviewed and improvements such as central repositories are being explored. Once analysis and improvements are complete, they will be documented and communicated to staff within the department and to the Office of Financial Services for awareness. Additionally, as part of succession plan development, the department will create intentional opportunities for knowledge transfer, shared document storage, and increased transparency amongst work teams, which will assist with document location in the context of unexpected personnel changes. The department will reimburse the federal agency for any unallowable costs. Anticipated Completion Date: June 30, 2024 Contact: Jennifer Stallsworth, Chief of Staff or David Hawkins, Construction and Facility Maintenance Manager

View Audit 45093 Questioned Costs: $1

Finding 47822 (2022-054)

Significant Deficiency 2022

State of Oregon

OR

Allowable Costs / Cost Principles § 200.1 § 200.400 § 200.404

2022-054 Department of Human Services/Oregon Health Authority Improve controls over payments for Medicaid clients Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 2105OR5M...

2022-054 Department of Human Services/Oregon Health Authority Improve controls over payments for Medicaid clients Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777 and 93.778 Medicaid Cluster Federal Award Numbers and Years: 2105OR5MAP, 2021; 2105OR5ADM, 2021; 2205OR5MAP, 2022; 2205OR5ADM, 2022 Compliance Requirement: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.1(1); 2 CFR 200.400(a); 2 CFR 200.404; 42 CFR ? 433.32(a) Federal regulations only allow the Medicaid program to charge allowable program expenditures at the federal financial participation rate for various program costs at the time of payment for services provided. The Department of Human Services (department) and the Oregon Health Authority (authority) make payments to service providers through the Jsystems system. We randomly sampled 61 clients and one Medicaid service payment associated with each client using a statistically valid sample. We reviewed agency documentation to test compliance with the Activities Allowed or Unallowed & Allowable Cost requirements. For 1 client, we found the issues described below. The claim selected as our sample item did not have mileage accurately calculated, which resulted in an overpayment. Further review of payments for this client identified additional inaccurate payments during the fiscal year for mileage to this provider. Questioned costs identified for our sample item resulted in an overpayment of $6.00 and other identified questioned costs resulted in an underpayment of ($5.27). The above issues occurred due to human error when entering mileage into the state payment system from the home care worker mileage tracking software (OR-PTC), which lead to improper payments. Phase 1 of the OR-PTC system was implemented in September of 2021. During this phase of the implementation branches must run a report of mileage claims and enter these claims manually into the payment system. Due to the exceptions noted above, we reviewed all clients within our sample for the fiscal year which had mileage entered into the OR-PTC system and identified multiple additional underpayments and overpayments that resulted in an overall underpayment of ($49.07). Due to the systemic nature of this issue, we are unable to reasonably estimate or quantify remaining potential questioned costs outside of our sample population. We recommend department and authority management strengthen controls over the OR-PTC system to ensure transactions are adequately supported and reviewed. MANAGEMENT RESPONSE: We agree with this recommendation. The department is engaged in ongoing efforts to mitigate this risk through continued communications with local offices and their leadership around the importance of correct data entry and reviewing changes to our KPI?s that we report quarterly to CMS. Regional Readiness Coordinators (RRCs) provide training, reinforce best practices, review business processes, and provide feedback on issues we are seeing to reduce incidences of human error. The department will also continue to review and research authorizations for Mileage and Time entries that do not align with existing claims to determine where additional RRC support is needed. Several system enhancements and changes slated for June 2023 are intended to help providers claim time accurately and reduce local office workload associated with reviewing pending entries. This will not fully resolve the issues noted by SOS, however, implementation of phase 2A of the Provider Time Capture System, which is scheduled to go into production July 12, 2024, will eliminate the need for local offices to manually enter mileage or hours into the mainframe payment systems and will automatically flag discrepancies between OR PTC DCI and the Mainframe. The department has corrected all identified issues discovered through the audit process. Anticipated Completion Date: July 31, 2024 Contact: Jennifer Stallsworth, Chief of Staff

View Audit 45093

Finding 47817 (2022-046)

Significant Deficiency 2022

State of Oregon

OR

Cash Management

2022-046 Oregon Health Authority Ensure cash draws are made only for immediate cash needs Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years:...

2022-046 Oregon Health Authority Ensure cash draws are made only for immediate cash needs Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 6B08TI083472, 2021 Compliance Requirement: Cash Management Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 31 CFR 205.33 The Substance Abuse Block Grant is subject to federal cash management requirements. Federal regulations require the state minimize the time between the drawdown and disbursement of federal funds. The department?s normal draw procedure for the block grant is designed to request federal funds on a reimbursement basis. The amount to be drawn is calculated based on a comparison between previously drawn revenue amounts and program expenditures at the time of the draw. During our testing of a sample of three of the 15 cash draws performed during state fiscal year 2022, we identified an error in the calculation of a draw performed in April 2022 for the 2021 award. The process used to identify program revenues and expenditures for the draw calculation was incorrectly updated when the department transitioned to a new data analysis tool. As a result, the April 2022 draw requested $1 million in federal funds in excess of actual expenditures. The error in the query was not identified by the department through the end of the fiscal year. The total drawn on the award at the end of state fiscal year 2022 was in excess of expenditures by $847 thousand. Although the 2021 award was drawn in excess of expenditures at times after April 2022, the total revenues and expenditures were balanced at the close out of the award in December 2022. Additionally, according to Federal regulations no interest liability is incurred even though the draws were in excess of the immediate cash needs of operating the program. We recommend management ensure controls over the draw process are designed and implemented to review and identify calculation errors. MANAGEMENT RESPONSE: We agree with this recommendation. This was a criteria filter error in the accountant?s data query as developed in the transition from one query tool to another. This criteria filter has been corrected and the data query is now operating correctly. The referenced grant is currently in balance, revenue is balanced to expenditures. The reconciliation, which would have identified this anomaly, was delayed for this quarter. In the future, a full reconciliation to the general ledger system of record will occur quarterly to ensure this is not repeated. Anticipated Completion Date: November 30, 2023 Contact: Julie Strauss, Accounting Manager

View Audit 45093

Finding 47811 (2022-044)

Material Weakness 2022

State of Oregon

OR

Matching / Level of Effort / Earmarking § 200.303

2022-044 Oregon Health Authority Implement a consistent methodology for calculation of maintenance of effort Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for ...

2022-044 Oregon Health Authority Implement a consistent methodology for calculation of maintenance of effort Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.958: 1B09SM082625, 2020; 1B09SM083823, 2021; 1B09SM086032, 2022; 93.959: 1B08TI083068, 2020; 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Material Weakness Prior Year Finding: N/A Questioned Costs: N/A Criteria: 42 USC 300x-2(a)(1)(C); 42 USC 300x-4(b)(1); 42 USC 300x-9(c)(1); 42 USC 300x-22(b)(1)(C); 42 USC 300x-30(a); 2 CFR 200.303 The Mental Health Block Grant and Substance Abuse Block Grant are subject to various Maintenance of Effort and Earmarking requirements. These requirements ensure the department meets minimum expenditure thresholds. Federal regulations require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Based on auditor recalculations, we determined the department was in compliance with the applicable Maintenance of Effort and Earmarking requirements during state fiscal year 2022. However, we noted the following control weaknesses in the department?s calculations and demonstration of their compliance with the requirements: The department is required to expend 10% of the federal award for early serious mental illness and a first episode psychosis treatment services under the Mental Health Block Grant. The 10% set aside is calculated and budgeted when federal awards are granted. However, tracking of expenditures is not performed to ensure compliance is achieved. The department is required to maintain state expenditures for community mental health services and authorized substance abuse activities at a level not less than the average expenditures of the prior two state fiscal years. The department is also required to ensure expenditures for systems of integrated services for children with serious emotional disturbance and substance abuse treatment for pregnant women and women with dependent children is not less than the amount expended for these services in fiscal year 1994. The applicable expenditures were not consistently or accurately calculated by the department in each of the state fiscal years included in the Maintenance of Effort determinations. Additionally, no written procedures exist for the calculations. The department is at risk of noncompliance without controls in place to help ensure expenditures are tracked and calculations are consistently applied across fiscal years. We recommend department management implement controls to ensure applicable expenditures are adequately tracked and calculations applicable to the maintenance of effort requirements are consistently performed across fiscal years. We further recommend department management work with the federal awarding agency to submit corrected maintenance of effort totals to ensure appropriateness of future maintenance of effort determinations. MANAGEMENT RESPONSE: We agree with this recommendation. There were inconsistencies in how Maintenance of Effort (MOE) has been calculated. The applicable expenditures were not consistently or accurately calculated in each state fiscal year. The use of Marijuana paid expenses were not consistently used for both Mental Health and Substance Abuse Block Grant. We have met with SAMHSA MHBG State Project Office (SPO) for clarification on how Marijuana funds can be utilized in the calculation for the MOE. We have received guidance and clarification. We have recalculated MOE for the Block grants for SFY2022, SFY2021, and SFY2020 and are still doing data checks on these recalculations. With any changes to be made to previous years? MOE calculations, we must resubmit the request and reasons behind the changes to the SAMHSA project officers. HSD Budget is working on a written desk procedures to ensure applicable expenditures are adequately tracked and calculated to the maintenance of effort requirements and are consistently performed. Anticipated Completion Date: February 28, 2024 Contact: Annabelle Atalig, Budget and Fiscal Manager

View Audit 45093

Finding 47810 (2022-043)

Material Weakness 2022

State of Oregon

OR

Subrecipient Monitoring Reporting § 200.331

2022-043 Oregon Health Authority Implement controls to ensure subrecipients are appropriately identified and monitored Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block G...

2022-043 Oregon Health Authority Implement controls to ensure subrecipients are appropriately identified and monitored Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services; 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.958: 1B09SM082625, 2020; 1B09SM083823, 2021; 1B09SM086032, 2022; 93.959: 1B08TI083068, 2020; 6B08TI083472, 2021; 6B08TI084667, 2022 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.331; 45 CFR 75.352(b); 45 CFR 75.352(d) Federal regulations require pass-through entities to determine if the recipients of disbursements of federal funds are subrecipients or contractors. The subrecipient and contractor determination will impact which federal compliance requirements recipients are subject to and how program expenditures are reported on the Schedule of Expenditures of Federal Awards (SEFA). For recipients meeting the definition of a subrecipient, federal regulations require pass-through entities to evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining appropriate subrecipient monitoring activities. Monitoring activities should be completed based on the results of the subrecipient?s determined risk to ensure subawards are used appropriately. We reviewed the department?s classification of a sample of eight of 40 Mental Health Block Grant (MHBG) and 11 of 76 Substance Abuse Block Grant (SABG) recipients of federal funds. We judgmentally selected an additional 11 MHBG and 30 SABG recipients for review after our review of the initial sample of recipients identified inconsistencies in the classification of recipients. Based on the following inconsistencies identified in our review, it is unclear if the department correctly classified recipients as subrecipients or contractors and the related expenditures are reported accordingly. As a result, the SEFA may incorrectly report pass-through or direct expenditures. One recipient of MHBG funds and 13 recipients of SABG funds were classified as contractors by the department; however, other recipients providing the same services were classified as subrecipients. As they were identified as contractors, a SEFA correction of $1.4 million was made to report as direct expenditures rather than pass-through expenditures. Three recipients of MHBG funds and one recipient of SABG funds were classified as subrecipients by the department, but it was unclear if each met the definition of a subrecipient. One recipient of MHBG funds was classified as a contractor and appeared to meet the definition of a contractor; however, payments made to this recipient were recorded as pass-through expenditures. A SEFA correction of $329 thousand was made to report as direct expenditures rather than pass-through expenditures. One recipient of SABG funds was classified as neither contractor nor subrecipient. A SEFA correction of $215 thousand was made to report as direct expenditures rather than pass-through expenditures. We also inquired of the department?s risk assessment and monitoring activities for subrecipients. Based on our inquiries, the department does not have a formal implemented process for performing risk assessments to determine appropriate monitoring activities. Moreover, the department has not implemented a formal process to ensure subrecipients comply with federal regulations, terms and conditions of the subaward, and that subaward performance goals are achieved. If subrecipient monitoring is not performed and documented, subawards could be used for unauthorized purposes and performance goals not met. We recommend department management ensure recipients of federal funds are appropriately identified as subrecipients or contractors and the corresponding disbursement of federal funds are appropriately reported as direct or pass-through expenditures. We further recommend department management comply with subrecipient monitoring requirements, develop and implement internal controls to ensure risk assessments are performed and documented for each subrecipient, and monitoring activities are completed and documented according to risk assessment results. MANAGEMENT RESPONSE: We agree with this recommendation. HSD Contracts team has already implemented additional checklists to ensure subrecipients and vendors are identified and coded properly. We will be making the checklist automated through our grant management process and fully implemented by this fall. Anticipated Completion Date: November 30, 2023 Contact: Sarah Adelhart, Interim Manager

View Audit 45093

Finding 47809 (2022-042)

Material Weakness 2022

State of Oregon

OR

Questioned Costs Procurement, Suspension & Debarment Subrecipient Monitoring

2022-042 Oregon Health Authority Ensure expenditures of federal funds are for allowed activities Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services Federal Award Numbers and Years: ...

2022-042 Oregon Health Authority Ensure expenditures of federal funds are for allowed activities Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services Federal Award Numbers and Years: 1B09SM083823, 2021 Compliance Requirement: Activities Allowed or Unallowed Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: $525,272 (known) Criteria: 42 USC 300x-5(a)(3) Mental Health Block Grant (MHBG) funds may not be expended on the purchase, construction, or permanent improvement of any building or other facility other than minor remodeling. Substance Abuse and Mental Health Services Administration?s (SAMHSA) standard funding restriction guidance defines minor alterations and renovations as the lesser of 25% of the budget period or $150 thousand. Additionally, all minor alterations and renovations must be approved by SAMHSA. During our testing of MHBG subrecipient contracts entered into during state fiscal year 2022, we noted one contract included payment for the remodeling of an existing building owned by the subrecipient. A payment of $525,272 was processed in December 2021 for the remodeling expenses as specified in the contract's payment provisions. However, this amount exceeds SAMHSA's threshold for minor alterations and renovations and is not allowed under the MHBG. We recommend department management ensure controls are properly designed and implemented to record only allowable expenditures to the MHBG. We further recommend department management seek SAMHSA approval for minor alterations and renovations. MANAGEMENT RESPONSE: We agree with this recommendation. OHA intended to have an interagency agreement with ODHS to co-fund an improvement to a much-needed treatment facility for children. OHA submitted the payment per our agreement with the vendor with the expectation that ODHS would fund the non-SAMHSA allowable expenses. The vendor used the funds for minor safety related renovations as one would expect them to prioritize before programmatic costs. But unfortunately, the ODHS payment was never made to OHA which prevented any additional funds from being sent to the vendor. Then, pandemic constraints along with a lack of funding prevented the vendor from being able to finalize their plan in the initial time frame. OHA sought a legal review, and the recommendation was made to cleave the contract from ODHS and allow the vendor additional time to finish their work. Upon cleaving the contract, the elements that OHA knows to be unallowable for SAMHSA funding were left in the contract because the contractor had already performed the work. OHA is awaiting a final review of expenditure reports and will request SAMHSA approval if warranted or adjust funding codes as needed to align with SAMHSA allowable charges. Anticipated Completion Date: September 30, 2023 Contact: Sarah Adelhart, Interim Manager

View Audit 45093 Questioned Costs: $1

Finding 47808 (2022-041)

Material Weakness 2022

State of Oregon

OR

Reporting Allowable Costs / Cost Principles Material Weakness § 200.303

2022-041 Oregon Health Authority Ensure expenditures of federal funds are recorded to the appropriate program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services (COVID-19) 93.959 Bloc...

2022-041 Oregon Health Authority Ensure expenditures of federal funds are recorded to the appropriate program Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.958 Block Grants for Community Mental Health Services (COVID-19) 93.959 Block Grants for Prevention and Treatment of Substance Abuse (COVID-19) Federal Award Numbers and Years: 93.958 ? 1B09SM083994, 1B09SM085378 (COVID-19); 93.959 ? 1B08TI083513, 1B08TI083963 (COVID-19) Compliance Requirement: Activities Allowed or Unallowed Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: 93.958 - $2,268,421 (known COVID-19) Criteria: 2 CFR 200.303; 42 USC 300x-1 The department was required to submit a spending plan documenting the intended use of the awarded COVID-19 funding allocations under the Mental Health Block Grant (MHBG) and Substance Abuse Block Grant (SABG). The expenditure of COVID-19 funding should align with each block grant?s approved spending plan. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the Federal award. Our testing of state fiscal year 2022 MHBG COVID-19 expenditures identified $10.4 million in workforce development incentive payments inappropriately recorded under the MHBG. Further inquiry into the payments revealed the department determined during state fiscal year 2023 these expenditures were not included in the MHBG COVID-19 spending plans and were not allowable activities under the MHBG. The department determined incentive payments totaling $8.1 million in COVID-19 expenditures should have been recorded under the SABG in accordance with the SABG COVID-19 spending plans. The department subsequently moved the $8.1 million of the combined $10.4 million total COVID-19 incentive payment expenditures to the SABG; however, the remaining $2.3 million in incentive payment expenditures were left in the MHBG as a funding source had yet to be determined. An adjustment to the Schedule of Expenditures of Federal Awards (SEFA) was required to move the $8.1 million in COVID-19 spending from the MHBG to SABG. The remaining $2.3 million is considered questioned costs under the MHBG. We recommend department management ensure controls are properly designed and implemented to record only allowable expenditures to the appropriate federal programs. MANAGEMENT RESPONSE: We agree with this recommendation. The identified expenditures were initially charged to the MHBG in error, and when the error was found by OHA staff, the funding source was corrected to SAPT for the authorized $8.1 million prior to the SOS audit beginning. There was still $2.3 million remaining coded to MHBG which after extensive review and leadership decision, has now been re-coded appropriately. OHA?s existing internal controls identified this issue initially, no additional corrective action is needed. Anticipated Completion Date: July 5, 2023 Contact: Sarah Adelhart, Interim Manager

View Audit 45093

Finding 47807 (2022-048)

Significant Deficiency 2022

State of Oregon

OR

Subrecipient Monitoring Reporting Significant Deficiency

2022-048 Oregon Health Authority Improve review of federal performance progress reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR (Non-major program) Federal Award Numbers and Years: H79TI081716, 2020; H79TI083316, 2...

2022-048 Oregon Health Authority Improve review of federal performance progress reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR (Non-major program) Federal Award Numbers and Years: H79TI081716, 2020; H79TI083316, 2021 Compliance Requirement: Reporting Type of Finding: Significant Deficiency Prior Year Finding: 2019-020 Questioned Costs: N/A Criteria: 45 CFR 75.303(a); 45 CFR 75.342(b); Opioid STR Notice of Awards Federal regulations require performance progress reports (reports) be submitted semi-annually and include an overview of the goals and objectives accomplished during the funding period as stated in the grants? funding opportunity announcements. In addition, federal regulations require award grantees to establish and maintain effective internal control that provides reasonable assurance the award is managed in compliance with regulations and terms and conditions of the award. Effective controls may include review and approval of reports for completeness and accuracy. The Health Systems Division of the Oregon Health Authority (department) developed a tool to document post award monitoring in March of 2020, and for three years, the department has pointed to this tool as an action taken to ensure reports are complete and accurate. Although the department has yet to implement this tool, we found evidence of other internal controls that were partially implemented. Program now utilizes collaborative online software called Smartsheet which allows a contracted evaluator to compile subrecipient performance data the department can monitor and edit in real time. The department uses the Smartsheet as support for progress report data. We found some key data elements in the SOR2 year 2 progress report did not agree to support in Smartsheet. Program stated they reviewed a different spreadsheet supplied by the evaluator, not Smartsheet, which had totals agreeing to the submitted report. However, the department did not retain this additional spreadsheet. Without retaining the underlying support used for review, we are unable to assess the effectiveness of the department?s review of the report prior to submission. Program now requires manager review of reports prior to submission. We found evidence of manager review of the SOR2 year 2 progress report, however it was dated two days after the report was submitted. Ineffective controls could result in a misrepresentation of the grant?s performance. We recommend department management implement internal controls to ensure performance progress reports are complete and accurate prior to report submission. MANAGEMENT RESPONSE: We agree with this recommendation. To ensure performance progress reports are complete and accurate prior to report submission, the department will review current internal controls and plans to implement revised or new controls. The current process steps we are reviewing include: ? Sending the completed report via email to the program manager requesting they review the report for completeness and accuracy. ? Documenting approval via email confirmation that the report is complete and accurate prior to submission to federal funders. There is a need to revisit the internal control of having only managers designated to review the federal performance progress reports; we plan to discuss having the following individuals designated to conduct this review: principal investigator, grant coordinator, active partner, or manager. Anticipated Completion Date: December 31, 2023 Contact: Kelsey Smith-Payne, Opioid SOR Grants Project Director and Sarah Adelhart, Interim Manager

View Audit 45093

Finding 47806 (2022-047)

Significant Deficiency 2022

State of Oregon

OR

Subrecipient Monitoring Reporting

2022-047 Oregon Health Authority Implement controls to comply with subrecipient monitoring requirements Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR (Non-major program) Federal Award Numbers and Years: H79TI081716, 2020...

2022-047 Oregon Health Authority Implement controls to comply with subrecipient monitoring requirements Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR (Non-major program) Federal Award Numbers and Years: H79TI081716, 2020; H79TI083316, 2021 Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: 2019-019 Questioned Costs: N/A Criteria: 45 CFR 75.303(d); 45 CFR 75.351; 45 CFR 75.352(b) and (d) Federal regulations require that pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for the purpose of determining appropriate subrecipient monitoring activities. Monitoring activities should be completed based on the results of the subrecipient?s determined risk. Federal regulations also require grantees take prompt action when instances of noncompliance are identified in audit findings. The Health Systems Division of the Oregon Health Authority (department) developed a formal process for performing risk assessments to determine appropriate monitoring activities and developed a tool to document post award monitoring in March of 2020, and for three years, the department has pointed to these procedures as actions taken to partially correct the original 2019 finding. However, the department has yet to implement these or other procedures, and the Opioid program has no documented monitoring plan in place. Federal regulations require the department, as a pass-through entity, to determine if the recipients of disbursements of federal funds are subrecipients or contractors. The subrecipient and contractor determination will impact how program expenditures are reported on the Schedule of Expenditures of Federal Awards (SEFA). Out of 75 contracts with 59 subrecipients, we reviewed 15 contracts with 10 subrecipients and based on the contracts? listed deliverables, we determined five of them did not appear to meet the definition of a subrecipient. Department management could not support its subrecipient determinations and could not identify who made the decisions. As a result, the SEFA may incorrectly report $751,911 as pass-through funds instead of direct expenditures. We recommend department management comply with subrecipient monitoring requirements by implementing and documenting a procedure that evaluates each subrecipient?s risk of noncompliance for the purpose of determining and performing the appropriate monitoring for each subrecipient. We also recommend department management implement procedures to ensure federal subrecipient versus contractor determinations result in accurate reporting on the SEFA. MANAGEMENT RESPONSE: We agree with this recommendation. To comply with subrecipient monitoring requirements, the authority will implement our documented procedures. We will evaluate subrecipient?s risk of noncompliance for the purpose of determining and performing the appropriate monitoring for each subrecipient. We will ensure each subrecipient completes the grantee self-risk assessment survey we?ve created; once completed and submitted this survey will generate a monitoring guidance document based on if the grantee was determined low, moderate, or high risk. This risk assessment survey and guidance document will help inform appropriate subrecipient monitoring. The auto-generated word document is emailed to the identified OHA staff, stored in the software?s report, and can be accessed by staff on an OHA intranet page (OWL site). Additionally, the authority will ensure accurate federal subrecipient versus contractor determinations. We will evaluate and improve current determination procedures, develop a comprehensive checklist or guidance document based on improvement recommendations, determine who has the primary responsibility for subrecipient determinations, and provide training as needed. Anticipated Completion Date: December 31, 2023 Contact: Kelsey Smith-Payne, Opioid SOR Grants Project Director and Sarah Adelhart, Interim Manager

View Audit 45093

Finding 47805 (2022-058)

Significant Deficiency 2022

State of Oregon

OR

Questioned Costs Eligibility Period of Performance

2022-058 Department of Human Services Perform timely reconciliations of refinanced OR-Kids transactions Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.667 Social Services Block Grant Federal Award Numbers and Years: 2101ORSOSR, 2021; 22...

2022-058 Department of Human Services Perform timely reconciliations of refinanced OR-Kids transactions Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.667 Social Services Block Grant Federal Award Numbers and Years: 2101ORSOSR, 2021; 2201ORSOSR, 2022 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: $1,308,457 (likely) Criteria: 42 USC 1397a(c); 45 CFR 75.386a(2); 45 CFR 96.30b(2) According to federal requirements, to be eligible for federal funding, expenditures must be expended in the fiscal year allotted or in the succeeding fiscal year (period of performance). Additionally, federal post-closeout requirements stipulate the return of any funds due because of later refunds, corrections, or other transactions. As part of the grant closeout process, block grants also require the grantees to report the total funds expended and the date of the last expenditure. Grant closeout is the process by which the federal awarding agency determines that all applicable administrative actions and all required work have been completed. Social Services Block Grant (SSBG) has expenditures originating from the child welfare system, OR-Kids. OR-Kids is used to manage placements, eligibility, payments, and other case information. When various corrections are initiated, OR-Kids can re-process transactions as far back as January 1, 2008. For some placement corrections, OR-Kids processed the recovery of the funds in a state grant (Miscellaneous Other Fund grant), instead of the federal grant. To date, the department has not completed permanent fixes to the OR-Kids system to prevent these re-processing errors from occurring. During fiscal year 2022, the department was reconciling the Miscellaneous Other Fund grant and identified refunds related to SSBG. The refinanced expenditures reduced the amount of SSBG expenditures originally reported in closed grant awards. Instead of submitting a refund, the department identified expenditures recorded in subsequent grants that could have been used to backfill the reduction of expenditures. Allowable expenditures, that met the period of performance, were subsequently moved. To illustrate, a total of $1.3 million of expenditures were moved in the accounting system from grant award 21 (federal fiscal year 2021) to grant award 20. The department then moved expenditures totaling $1.2 million from grant award 20 to grant award 19. This process continued for all grant awards going back to grant award 11 (federal fiscal year 2011). The table below illustrates the movement of expenditures between grant awards. ?See Corrective Action Plan for Table? Although the department only moved expenditures that qualified for each respective period of performance, we question whether the federal awarding agency would allow the department to backfill the $1.3 million of expenditures in question after grant closeout had been completed. We recommend department management conduct more timely reconciliations of OR-Kids refinancing adjustments to ensure adjustments are made during the related periods of performance. We further recommend management work with its federal awarding agency to determine if it is appropriate to backfill program expenditures between grants to account for the reduction in expenditures created by the reconciliation process. If not appropriate, the questioned costs should be repaid to the federal awarding agency. MANAGEMENT RESPONSE: The agency disagrees with this finding. SFMA grant phase is an internal tracking mechanism only and is not mandated by ACF. None of the expenditures observed were moved into or out of the period of performance for which they originally qualified for. SSBG awards have a two-year period of performance for claiming. As a result, there is an overlap between internal phases where expenditures qualify for two at any given time. Assignment of phase in SFMA is based on internal balancing needs to ensure claiming is not over or under the award for that period. Prior period adjustments occur periodically and are debited or credited to the phase they were originally recorded under. Should those adjustments cause a phase to become under or over reported, the assigned phase in SFMA is adjusted to maintain consistency between SFMA expenditures and the SF-425 report provided to ACF. If a prior period increasing expenditure is outside the period of performance, it is moved to non-reportable and state only funding. Anticipated Completion Date: N/A Contact: Fariborz Pakseresht, Oregon Department of Human Services Director

View Audit 45093 Questioned Costs: $1

Finding 47801 (2022-034)

Significant Deficiency 2022

State of Oregon

OR

Cash Management § 200.305 § 200.508

2022-034 Oregon Housing and Community Services Ensure review of subrecipient requests for funds verifies immediate cash needs are supported Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Families Assistance Listing Number and Name: 93.568 Low...

2022-034 Oregon Housing and Community Services Ensure review of subrecipient requests for funds verifies immediate cash needs are supported Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Families Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program 93.568 Low-Income Home Energy Assistance Program (COVID-19) Federal Award Numbers and Years: 2001ORE5C3, 2020 (COVID-19); 2102ORLIEA, 2021; 2102ORE5C6, 2021 (COVID-19); 2202ORLIEA, 2022 Compliance Requirement: Cash Management Type of Finding: Significant Deficiency; Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR ? 200.305(b), (b)(1); 2 CFR ? 200.508 Federal regulations require that auditees maintain documentation as needed for the performance of audit procedures related to the Single Audit. Additionally, regulations require payment advances should be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the subrecipient for carrying out the approved program. We reviewed 60 sample cash draws and were unable to obtain adequate supporting documentation for 4 subrecipient requests for reimbursement/advances demonstrating they were appropriate and for immediate cash needs. We also identified an advance payment for which there was not an adequate explanation indicating why an advance was needed. These 5 exceptions totaled $124,304 in expenditures. Department management cited a breakdown in control process and communicated their intention to train relevant staff to ensure adequate support is obtained. Without adequate verification of cash needs, the department could be sending funds to subrecipients that are not for a reimbursement of expenditures or immediate cash needs. We recommend department management strengthen internal controls to ensure support for subrecipient requests for funds adequately documents they are appropriate and for immediate cash needs. MANAGEMENT RESPONSE: We agree with this recommendation. Strong internal controls exist and costs were eventually substantiated and allowable, however OHCS had significant staff turnover and newer staff processing these advance requests did not gather the level of detail required by OHCS to substantiate draws in a timely manner. Training has been completed for FY23. Anticipated Completion Date: June 30, 2023 Contact: Beth Brown, Accounting Manager

View Audit 45093

Finding 47800 (2022-033)

Material Weakness 2022

State of Oregon

OR

Reporting § 200.303 § 200.328

2022-033 Oregon Housing and Community Services Ensure financial reports are submitted Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Families Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program 93.568 Low-Inc...

2022-033 Oregon Housing and Community Services Ensure financial reports are submitted Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Families Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program 93.568 Low-Income Home Energy Assistance Program (COVID-19) Federal Award Numbers and Years: 2002ORLIEA, 2020; 2102ORE5C6, 2021 (COVID-19) Compliance Requirement: Reporting Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: 2021 ? 012 Questioned Costs: N/A Criteria: 2 CFR ? 200.303(a), (c)-(d); 2 CFR ? 200.328 Department management is responsible for establishing and maintaining effective internal control that provides reasonable assurance the department is managing the federal award in compliance with the terms and conditions of the federal award. Additionally, management is responsible for evaluating and monitoring the department?s compliance with the terms and conditions of federal awards and taking prompt action when instances of noncompliance are identified. Federal Financial Reports, SF-425?s, are required to be submitted annually for each open grant award ninety days after the end of the federal fiscal year. The department did not submit SF-425?s for two of the four open grants for the federal fiscal period ended September 30, 2021. This is an improvement from the prior fiscal year when the department hadn?t submitted any of the SF-425 reports for open grants. Department management cited a federal reporting system issue where awards are not appropriately tied to the correct grant identification number, which has hindered their ability to submit financial reports. As a result, the department was not in compliance with financial reporting requirements in accordance with the terms and conditions of their grant agreements. We recommend department management work with their federal partners to determine if unsubmitted reports should be completed and to ensure reporting compliance in future fiscal periods. MANAGEMENT RESPONSE: We agree with this recommendation. OHCS submitted 2 of the 4 required reports but was unable to submit the remainder due to technical issues with the federal reporting system. OHCS compiled all requisite reporting information timely and is in correspondence with the federal funder to enable report submission. Anticipated Completion Date: December 31, 2023 Contact: Beth Brown, Accounting M

View Audit 45093

Finding 47799 (2022-032)

Material Weakness 2022

State of Oregon

OR

Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.332

2022-032 Oregon Housing and Community Services Ensure subrecipient risk assessments and fiscal monitoring are performed and required grant information is communicated timely to subrecipients Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Fami...

2022-032 Oregon Housing and Community Services Ensure subrecipient risk assessments and fiscal monitoring are performed and required grant information is communicated timely to subrecipients Federal Awarding Agency: U.S. Department of Health and Human Services, Administration for Children and Families Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program 93.568 Low-Income Home Energy Assistance Program (COVID-19) Federal Award Numbers and Years: 2001ORE5C3, 2020 (COVID-19); 2102ORLIEA, 2021; 2102ORE5C6 , 2021 (COVID-19); 2202ORLIEA, 2022 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR ? 200.332(a) ? (h) Federal regulations require that pass-through entities evaluate each subrecipient?s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward to determine the extent and scope of subrecipient monitoring activities. Monitoring activities should be based on the results of a given subrecipient?s determined risk. Pass-through entities must also communicate certain award information to subrecipients as the time of the subaward. The department, as the pass-through entity, has long-established subrecipient monitoring procedures broken into two categories: program and fiscal monitoring. Program monitoring is performed by program-specific staff and focuses on requirements related to certain aspects of Activities Allowed and Client Eligibility. During FY2022, the department performed program monitoring activities as planned. Fiscal monitoring reviews compliance requirements related to Allowable Costs, Activities Allowed, and Earmarking. However, fiscal monitoring activities were limited due to staff turnover. As a result, limited fiscal monitoring procedures were performed for 5 of 17 subrecipients, and fiscal monitoring risk assessments were not performed for any of the 17 subrecipients. Without the performance of subrecipient risk assessments and adequate fiscal monitoring, the department risks distributing program funds to subrecipients out of compliance with federal program requirements. Additionally, we reviewed 5 randomly selected subrecipients to determine whether all required grant award information was communicated at the time of the subaward. For all of the 5 subrecipients reviewed, only some of the required information was communicated at the time of the award. The required information missing in the original grant agreements was communicated via agreement amendments several months later. Without timely communication of required grant information, subrecipients may not have all the information they need for the subaward they received. We recommend department management ensure subrecipient risk assessments are performed for all subrecipients and ensure required fiscal monitoring activities are performed based on the results of the risk assessments. We also recommend department management ensure all required award information is communicated to subrecipients at the time of the subawards. MANAGEMENT RESPONSE: We agree with this recommendation. OHCS lost critical fiscal monitoring staff and was unable to complete all risk assessments and fiscal monitoring due to this. OHCS is on track to complete fiscal monitoring and risk assessments for all subrecipients of LIHEAP in FY23. Additionally, OHCS has established vendor relationships to perform fiscal monitoring as a backup for when staff vacancies exist. Anticipated Completion Date: June 30, 2023 Contact: Dean Criscola, Controller or Michelle Cole, Assistant Director of Energy Services

View Audit 45093

Finding 47798 (2022-040)

Significant Deficiency 2022

State of Oregon

OR

Questioned Costs Eligibility Significant Deficiency

2022-040 Department of Human Services Improve controls to ensure eligibility criteria are met Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.558 Temporary Assistance for Needy Families Federal Award Numbers and Years: 2021G996115, ...

2022-040 Department of Human Services Improve controls to ensure eligibility criteria are met Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.558 Temporary Assistance for Needy Families Federal Award Numbers and Years: 2021G996115, 2021; 2022G996115, 2022 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency, Noncompliance Prior Year Finding: N/A Questioned Costs: $9,569 (known); $931,750 (likely) Criteria: 45 CFR 264.1; Oregon TANF State Plan The State of Oregon Temporary Assistance for Needy Families (TANF) State Plan (Plan) defines financial neediness criteria with its adjusted income limit tables. Federal regulations establish 60 cumulative months as the length of time a client may receive federal TANF assistance. The department uses its case management system, Oregon Eligibility (ONE), to count federal-eligible benefit months, and when 60 months is reached, an indicator is sent to the financial subsystem to change federal funding to state funding. From a population of 105,267 TANF benefit payments recorded in ONE, we randomly selected a sample of 40 and two additional individually significant payments for testing. We found: One sample?s financial eligibility information included a disaster relief benefit without details showing the date of payment and the covered time period. As a result, auditors and the department are unable to determine if this case met financial eligibility criteria, resulting in questioned costs of $1,311. One individually significant case?s child support and spousal support were entered incorrectly into ONE. The countable income at time of certification did not meet the adjusted income limit, making the client ineligible for TANF benefits. Questioned costs for this case total $8,258. We recommend department management ensure federally-funded client benefits are paid on behalf of eligible individuals, and documentation is retained to support eligibility decisions. We also recommend department management correct the identified error cases and reimburse the federal agency for questioned costs. MANAGEMENT RESPONSE: We agree with this recommendation. The Department will communicate to eligibility staff the importance of reviewing information reported by the applicant compared to information received from a third-party and direct staff to case note in the ONE system how the discrepancy was reconciled. The Department will also communicate the requirement to maintain eligibility records in both case notes and electronic file when applicable. The Department will review the cases cited and make an appropriate referral to the Overpayment Recovery Unit. Overpayments recouped can then be adjusted by Office of Financial Services to credit the TANF federal grant rather than reimbursing, per instructions outlined in TANF-ACF-PI-2006-03. Anticipated Completion Date: October 31, 2023 Contact: Annette Palmer, TANF Program Manager

View Audit 45093 Questioned Costs: $1

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