Corrective Action Plans

Finding 554410 (2023-004)

Material Weakness 2023

Island County Economic Development Council

WA

Subrecipient Monitoring § 200.331 § 200.332

Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulatio...

Recommendation: CLA recommends adding a review and approval process for all the reimbursement requests and obtaining the support for the payments made in advance for the subawards and review whether subrecipient used the subaward for authorized purposes in compliance with federal statutes, regulations, and the terms and conditions of the subaward. Additionally, CLA recommends modifying the subaward agreements to include the award information required by CFR 200.332 (b). There is no disagreement with the audit finding. Action taken in response to finding: ICEDC appreciates the identification of a gap in subrecipient monitoring. In response, we are strengthening our monitoring procedures by implementing a formal subrecipient monitoring program. ICEDC will implement a formal review and approval process for all reimbursement requests and will enhance monitoring procedures to better assess utilization of the subaward funds for their intended, authorized purposes. This will include regular reviews of subrecipient activities and financial reports to ensure compliance with federal statutes, regulations, and the terms of the subaward. ICEDC will ensure subaward agreements include all necessary award information as required by CFR 200.332 (b). Name(s) of the contact person(s) responsible for corrective action: Kristina Hines Planned completion date for corrective action plan: 8/31/2025

View Audit 353072

Finding 554404 (2023-003)

Material Weakness 2023

Island County Economic Development Council

WA

Procurement, Suspension & Debarment § 200.318 § 200.327

Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done...

Recommendation: CLA recommends ICEDC to update the procurement policy to be compliance in with Uniform Guidance and to include more rigorous documentation as required by 2 CFR sections 200.318-200.327. ICEDC needs to ensure that policy includes the need for suspension and debarment checks to be done prior to entering into a covered transaction. CLA also recommends emphasizing the importance of the procurement standards and established policy to all authorized purchasers within ICEDC. There is no disagreement with the audit finding. Action taken in response to finding: ICEDC acknowledges CLA’s recommendation regarding the need to update the procurement policy to ensure full compliance with the Uniform Guidance, specifically in accordance with 2 CFR Sections 200.318-200.327. ICEDC will further align policy with the requirements outlined in 2 CFR Sections 200.318-200.327, ensuring that all procurement processes are conducted in accordance with federal regulations. The updated policy will require that all suspension and debarment checks are conducted as per the applicable regulations and will ensure all authorized purchasers within ICEDC receive training in procurement policies when engaging in grant activities. Name(s) of the contact person(s) responsible for corrective action: Kristina Hines Planned completion date for corrective action plan: 8/31/2025

View Audit 353072

Finding 554398 (2023-002)

Material Weakness 2023

Island County Economic Development Council

WA

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

Material Weakness in Compliance and Internal Control over Compliance Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding ...

Material Weakness in Compliance and Internal Control over Compliance Recommendation: CLA recommends that additional emphasis of documentary evidence of approvals be made, and such evidence is retained by ICEDC as proof of oversight of expenditure of federal funds. Additionally, we recommend adding a review and approval process for the ED’s timesheets. There is no disagreement with the audit finding. Action taken in response to finding: ICEDC appreciates CLA’s recommendation to enhance processes concerning the retention of documentary evidence of approvals and importance of maintaining strong oversight of expenditures, especially when handling federal funds. ICEDC will place greater emphasis on obtaining and retaining documentation of approvals related to the expenditure of funds. This documentation will serve as proof of oversight, ensuring compliance with federal regulations and enhancing transparency in fund management. A formal review and approval process will be established for the Executive Director's (ED’s) timesheets. This process will involve periodic reviews by a designated authority and documentation will be retained to maintain a clear audit trail. Name(s) of the contact person(s) responsible for corrective action: Kristina Hines Planned completion date for corrective action plan: 8/31/2025

View Audit 353072 Questioned Costs: $1

Finding 554367 (2023-001)

Material Weakness 2023

Housing Authority of the City of Conway

AR

Internal Control / Segregation of Duties Reporting

Housing Authority of the City of Conway respectfully submits the following corrective action plan for the year ended September 30, 2023. Responsible Official: Catherine Lamberg, Executive Director Name and address of independent public accounting firm: Miller & Rose, PA 1309 East Race Searcy, ...

Housing Authority of the City of Conway respectfully submits the following corrective action plan for the year ended September 30, 2023. Responsible Official: Catherine Lamberg, Executive Director Name and address of independent public accounting firm: Miller & Rose, PA 1309 East Race Searcy, AR 72143 Audit period: Year ended September 30, 2023 Oversight Agency: U.S. Department of Housing and Urban Development The findings from the September 30, 2023, audit are discussed below. The findings are numbered to correspond to the auditing findings disclosed in the Schedule of Findings and Questioned Costs. MATERIAL WEAKNESSES Finding 2023-001 – Material Misclassifications • Criteria: A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions to prevent or detect misstatements of the financial statements on a timely basis. AU-C Section 265 Communication Internal Control Related Matters Identified in an Audit, identifies deficiencies in controls over the period-end financial reporting process, including controls over procedures used to enter transactions and journal entries into the general ledger and to record recurring and nonrecurring adjustments to the financial statements that was not initially identified by the entity’s internal controls even if management subsequently corrects the misstatement. • Condition: Material misclassifications in the financial statements under audit. Multiple accounts were not reconciled on a regular basis. In addition, deposits were not recorded on a timely basis resulting in material errors on the financial data schedule that was submitted to REAC. • Context: Several items were discovered that were misclassified. More specifically, assets, liabilities, revenues and expenses were not able to be verified or reconciled. • Effect: The financial statements of Housing Authority of the City of Conway were not materially correct. • Recommendation: Review procedures for proper classification of expenditures and reconcile accounts on a regular basis. • Planned Corrective Actions: We are working with our accountant to resolve the issue. During the current fiscal year, our accountant was not able to access our financial records on a timely basis which resulted in multiple items not being recorded or reconciled. We anticipate these issues being resolved prior to completion of the next audit.

View Audit 352989

Finding 554358 (2023-007)

Significant Deficiency 2023

Exeter Township School District

PA

Reporting School Nutrition Programs § 200.510

Federal Program Child Nutrition Cluster - Passed through the Pennsylvania Department of Education and Pennsylvania Department of Agriculture ALNs 10.555 and 10.553 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 C...

Federal Program Child Nutrition Cluster - Passed through the Pennsylvania Department of Education and Pennsylvania Department of Agriculture ALNs 10.555 and 10.553 Education Stabilization Fund - Passed through the Pennsylvania Department of Education ALN 84.425 Criteria Per the Uniform Guidance 2 CFR 200.510, the auditee is required to prepare a schedule of expenditures of federal awards (SEFA). Condition The District prepared a SEFA and provided information relating to the federal programs including grant agreements and other supporting documentation. However, the SEFA prepared by the auditee required material adjustments as a result of audit procedures. Cause Certain account reconciliations were not performed prior to the audit, which impacted amounts reported on the SEFA. Effect Amounts reported on the SEFA provided by the auditee were not accurate. The SEFA was subsequently updated through audit procedures, including inquiry and review of grant documentation of awards received and amounts expended. Questioned Costs None. Context A SEFA was prepared by management; however, several adjustments were required in order for the schedule to accurately reflect the current year activity. Repeat Finding Yes. See finding 2022-003. Recommendation In order to meet Uniform Guidance requirements, the District should prepare the SEFA from the grant award documentation and any other relevant information including the assistance listing numbers, grant award amounts, grant amounts received, grant amounts expended, and grant revenue recorded. The amounts reported in the SEFA should reconcile to the general ledger. Management Response The new Assistant Business Manager has been trained in Uniform Guidance requirements as well as Federal program guidelines. This should not happen in the future.

View Audit 352972

Finding 554357 (2023-006)

Significant Deficiency 2023

Exeter Township School District

PA

Subrecipient Monitoring Reporting

Federal Program Education Stabilization Fund - Passed through the Pennsylvania Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ALN 84.425U; Contract #223-21-0141; Grant Period 03/13/20 - 09/30/24 COVID-19 - ARP ESSER Learning Loss Set Aside ALN 84...

Federal Program Education Stabilization Fund - Passed through the Pennsylvania Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ALN 84.425U; Contract #223-21-0141; Grant Period 03/13/20 - 09/30/24 COVID-19 - ARP ESSER Learning Loss Set Aside ALN 84.425U; Contract #225-21-0141; Grant Period 03/13/20 - 09/30/24 Criteria The District is required to submit an annual performance report to the Commonwealth of Pennsylvania (the “State”) with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Condition During the year ended June 30, 2023, the District submitted a report for the funds used during the year ended June 30, 2022. The report submitted by the District contained expenditure amounts that did not agree to the amounts reported on the schedule of expenditures of federal awards for the year ended June 30, 2022. Cause When the information was entered into the performance report in the Pennsylvania Information Management System (PIMS), errors were made in the expenditure numbers input in the system. The review process in place did not detect the errors. Effect The information submitted, which will be used in the State’s report to the Department of Education, was not accurate for the key line items that we tested based on the Compliance Supplement published by the Office of Management and Budget. Questioned Costs None. Context The District is required to submit the performance report on an annual basis. The required report was submitted timely. The expenditures reported did not agree to expenditures on the June 30, 2022 schedule of expenditures of federal awards. Repeat Finding No. Recommendation We recommend the District update its report filing procedures to include comparing the expenditures entered on the annual performance report to the audited schedule of expenditures of federal awards. Management Response The District had a finding in the 2021 - 2022 audit that had non-allowable expenses. When the district received the audit, the 2023 federal reports were already submitted. The District made the adjustments for non-allowable expenses in the 2023 SEFA and took out the non-allowable in the 2024 State reports.

View Audit 352972

Finding 554356 (2023-005)

Significant Deficiency 2023

Exeter Township School District

PA

Procurement, Suspension & Debarment Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Federal Program Education Stabilization Fund - Passed through the Pennsylvania Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ALN 84.425U; Contract #223-21-0141; Grant Period 03/13/20 - 09/30/24 COVID-19 - ARP ESSER Learning Loss Set Aside ALN 84...

Federal Program Education Stabilization Fund - Passed through the Pennsylvania Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) ALN 84.425U; Contract #223-21-0141; Grant Period 03/13/20 - 09/30/24 COVID-19 - ARP ESSER Learning Loss Set Aside ALN 84.425U; Contract #225-21-0141; Grant Period 03/13/20 - 09/30/24 Criteria In accordance with Uniform Guidance Post Federal Award Requirements, the District must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition The District did not maintain effective internal controls over the Federal awards. Two invoices were coded to the grants that were paid without documented approval. Cause The District did not follow documented internal control procedures which require all disbursements to have an approved purchase order or invoice signed by an administrator. Effect By paying invoices coded to Federal grants without approval, the District is not verifying the allowability of invoices. This increases the risk that unallowable activities and costs can be charged to the Federal grants and go undetected. Questioned Costs None. Context The Education Stabilization Fund grant nonpayroll costs were made up of 23 invoices. We tested three individually significant and five sampled invoices. Of the five sampled invoices, we found that two invoices were paid without approval. However, no discrepancies were identified in the allowability of the invoices. Repeat Finding No. Recommendation We recommend the District follow documented internal control procedures requiring all disbursements have an approved purchase order or signed invoice. This will ensure that invoices coded to Federal grants are reviewed for allowability before they are applied to the grants. Management Response This has been rectified. The district had a vacancy in the Federal Program Coordinator. Either the new Federal program Coordinator or the Business Administrator will approve and initial the invoices prior to payment.

View Audit 352972

Finding 554298 (2023-005)

None 2023

Solutions for Change, Inc.

CA

Finding 2023-005 - Replacement Reserve Withdrawals – Neighborhood Stabilization Program, Assistance Listing Number 14.256: Statement of Condition Withdrawals in the amount of $26,000 were made from the replacement reserve account for the Projects acquired with Neighborhood Stabilization Program fund...

Finding 2023-005 - Replacement Reserve Withdrawals – Neighborhood Stabilization Program, Assistance Listing Number 14.256: Statement of Condition Withdrawals in the amount of $26,000 were made from the replacement reserve account for the Projects acquired with Neighborhood Stabilization Program funds were used to cover operating cash flow needs during the year ended December 31, 2023. Criteria According to the County of San Diego Department of Housing and Community Development (the “County”) Regulatory Agreements, disbursements from the replacement reserve accounts may only be made to fund Project expenses with the approval of the County. Effect Solutions for Change was not in compliance with the terms of the County Regulatory Agreements during the year and the replacement reserve accounts had a deficient balance of $30,693 at December 31, 2023. Cause Solutions for Change used funds from the replacement reserve account to cover operating cash flow needs. Recommendation Replacement reserves should be repaid. Future withdrawals should not be used without the approval of the County. Management Response Acknowledgment of Findings: Management acknowledges and agrees with this audit finding. Withdrawals totaling $26,000 were made from the Replacement Reserve Account to support the Project. For over 15 years, Solutions for Change has consistently met this obligation through private-sector donations. However, extraordinary challenges beyond our control limited our ability to do so in this period, necessitating the use of reserve funds. Cause Analysis: Management has conducted an in-depth analysis of the factors leading to this finding and determined that the primary cause is directly related to California’s Housing First mandate. This state-imposed approach significantly reduces funding opportunities for nonprofits that operate accountability-based, self-sufficiency-driven housing models. Under Housing First, funding is restricted to programs that do not require job placement, sobriety, or self-improvement interventions, which are essential elements of Solutions for Change’s proven approach. This policy shift has resulted in decreased access to public funding, forcing a greater reliance on private donations. In response, we made the strategic decision to uphold our core values despite financial uncertainties. Corrective Action Plan: To restore the Replacement Reserve Account, the Board of Directors has approved a comprehensive divestment strategy, including the sale of privately owned real estate controlled by the nonprofit. The proceeds from this sale will fully replenish the Replacement Reserve Account in the amount of $30,693. • Planned Sale Timeline: Between June and November 2025 • Full Restoration of Replacement Reserve: By December 1, 2025 This restoration effort is part of a multi-year strategic recovery plan that incorporates a private-sector initiative called “Bridge to Freedom.” In addition, the Board is exploring alternative funding streams to ensure financial stability while maintaining program integrity. Commitment to Financial Responsibility: Solutions for Change remains fully committed to responsible financial management and long-term sustainability. We will continue to implement strategic measures to secure financial stability while staying true to our mission of solving family homelessness through transformative, self-sustaining solutions.

View Audit 352898

Finding 554286 (2023-002)

Significant Deficiency 2023

New Beginning International Ministry Inc.

TN

Cash Management

Corrective Action: The Organization has plans to transition to a new digital software to electronically receive meal counts

View Audit 352876

Finding 554285 (2023-001)

Significant Deficiency 2023

New Beginning International Ministry Inc.

TN

Reporting Internal Control / Segregation of Duties

Corrective Action: The Organization is working with their financial institution to see if statement closing dates can better align with the reporting period. The Organization will perform the reconciliation if no changes can be made with the bank

View Audit 352876

Finding 554240 (2023-001)

None 2023

Westside Family Healthcare

DE

Reporting

During 2023 and 2024 there were significant problems with staffing, in addition to having an accounting system that was difficult to manage without having appropriate staff. This caused a delay in the 2022 audit, which carried to 2023 as well. In late 2024, staffing stabilized and the Organization t...

During 2023 and 2024 there were significant problems with staffing, in addition to having an accounting system that was difficult to manage without having appropriate staff. This caused a delay in the 2022 audit, which carried to 2023 as well. In late 2024, staffing stabilized and the Organization transitioned to an accounting system that was much easier to operate, even with reduced staffing. At this time, the Organization does not foresee delays with future audits.

View Audit 352811

Finding 554191 (2023-001)

Material Weakness 2023

City of Pullman

WA

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

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE City of Pullman January 1, 2023 through December 31, 2023 This schedule presents the corrective action the City is planning to take for findings included in this report in accordance with Title 2 U.S. Code of Federal Regulations (C...

CORRECTIVE ACTION PLAN FOR FINDINGS REPORTED UNDER UNIFORM GUIDANCE City of Pullman January 1, 2023 through December 31, 2023 This schedule presents the corrective action the City is planning to take for findings included in this report in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Finding ref number: 2023-001 Finding caption: The City did not have adequate internal controls and did not comply with federal suspension and debarment requirements. Name, address, and telephone of District contact person: Jeff Elbracht, Director of Finance 190 SE Crestview Street, Pullman, WA 99163 (509) 338-3212 Corrective action the auditee plans to take in response to the finding: Controls and training will be put in place to ensure staff complies with federal suspension and debarment requirements including completion for the process on all subsequent agreements with each contractor. Anticipated date to complete the corrective action: Immediately

View Audit 352781

Finding 554185 (2023-002)

Material Weakness 2023

Westchester Community Opportunity Program, Inc.

NY

Allowable Costs / Cost Principles § 200.430

For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end eac...

For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until fiscal year 2025 given the timing of the fiscal year 2021 and 2022 audits and receipt of this finding.

View Audit 352780

Finding 554151 (2023-019)

Significant Deficiency 2023

State of California

CA

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.300 § 200.303 § 200.309 § 200.403

The CDSS’ Disability Determination Services Division (DDSD) has implemented corrective measures to address inaccuracies in the Modernized Integrated Disability Adjudicative System (MIDAS) and Disability Case Processing System (DCPS) invoice review processes. This includes an internal quality control...

The CDSS’ Disability Determination Services Division (DDSD) has implemented corrective measures to address inaccuracies in the Modernized Integrated Disability Adjudicative System (MIDAS) and Disability Case Processing System (DCPS) invoice review processes. This includes an internal quality control process to monitor and review additional invoice samples from Branches after they have been processed and reviewed by Branch Program Technicians and Branch Auditors. Additionally, the DDSD Central Support Services Branch implemented a secondary audit process and created a new Auditor role to routinely sample additional Medical Evidence of Record (MER) and Consultative Examination (CE) contracts. Findings are provided to branches to reinforce accuracy and assure compliance. The DDSD, also transitioned from MIDAS to DCPS, which provides more sophisticated fiscal controls. To remediate any inaccuracies, DDSD’s centralized auditor will assess findings and develop an action plan to prevent erroneous invoices. The CDSS ensures that all necessary controls are in place to verify the accuracy and proper documentation of invoices. The CDSS concludes that the sample size of 15 MER cases does not provide sufficient audit evidence that controls are not operating effectively resulting in a calculated $54,398 in potential costs. However, CDSS agrees with the finding and is committed to the control and mitigation of risk related to the audit recommendation. Estimated Implementation Date: Implemented Contact: Bernice Stanfield, Fiscal and Procurement Section Chief Central Support Services Branch Disability Determination Service Division California Department of Social Services

View Audit 352774 Questioned Costs: $1

Finding 554148 (2023-016)

Material Weakness 2023

State of California

CA

Internal Control / Segregation of Duties Special Tests & Provisions Allowable Costs / Cost Principles § 200.303

CDPH is addressing the findings of the audit through a combination of outreach and training for internal stakeholders, updated internal policies, and data verification to ensure proper review and approval of the Form CMS-1539. Estimated Implementation Date: April 2025 Contact: Nate Gilmore, Branch ...

CDPH is addressing the findings of the audit through a combination of outreach and training for internal stakeholders, updated internal policies, and data verification to ensure proper review and approval of the Form CMS-1539. Estimated Implementation Date: April 2025 Contact: Nate Gilmore, Branch Chief Center for Health Care Quality California Department of Public Health

View Audit 352774

Finding 554141 (2023-014)

Material Weakness 2023

State of California

CA

Subrecipient Monitoring Special Tests & Provisions Allowable Costs / Cost Principles § 200.303

The CDSS will complete its development and implementation of a monitoring process over license-exempt health and safety standards in collaboration with the federal Administration of Children and Families and the State Legislature. Estimated Implementation Date: July 1, 2027 Contact: Jeff Fowler, St...

The CDSS will complete its development and implementation of a monitoring process over license-exempt health and safety standards in collaboration with the federal Administration of Children and Families and the State Legislature. Estimated Implementation Date: July 1, 2027 Contact: Jeff Fowler, Staff Services Manager III Child Care and Development Program California Department of Social Services

View Audit 352774

Finding 554140 (2023-013)

Material Weakness 2023

State of California

CA

Questioned Costs Subrecipient Monitoring Internal Control / Segregation of Duties § 200.303

The CDSS disagrees with the finding. California’s subsidized child care system is locally operated. The CDSS relies on hundreds of local county offices and nonprofit agencies to administer child care and development programs at the local level, rather than having the State pay subsidized providers d...

The CDSS disagrees with the finding. California’s subsidized child care system is locally operated. The CDSS relies on hundreds of local county offices and nonprofit agencies to administer child care and development programs at the local level, rather than having the State pay subsidized providers directly. As a result, CDSS required Alternative Payment Programs, direct-service contractors that administer Family Child Care Home Education Networks, and fiscal partners to track survey completion as a prerequisite for awarding American Rescue Plan Act (ARPA) subgrants. This local infrastructure and the size of California’s subsidized child care and development system separates California from other states. As a result, CDSS worked very closely with the federal grantor, the Administration for Children and Families, to ensure that the ARPA survey methodology met federal monitoring requirements and tracked data elements required by the federal government. For this reason, CDSS believes it has fulfilled its responsibility and does not need to further establish a monitoring program. Estimated Implementation Date: Will not implement Contact: Jeff Fowler, Staff Services Manager III Child Care and Development Program California Department of Social Services

View Audit 352774 Questioned Costs: $1

Finding 554139 (2023-012)

Material Weakness 2023

State of California

CA

Questioned Costs Subrecipient Monitoring Matching / Level of Effort / Earmarking § 200.303 § 200.332 § 200.513 § 200.521

The CDSS agrees with the finding. The Child Care and Development Division's Program Quality Improvement Branch (PQIB) recognized the need for tracking monitoring procedures starting from risk assessment identification to closing out of Continuous Improvement Plans (CIP) to ensure that contractors wi...

The CDSS agrees with the finding. The Child Care and Development Division's Program Quality Improvement Branch (PQIB) recognized the need for tracking monitoring procedures starting from risk assessment identification to closing out of Continuous Improvement Plans (CIP) to ensure that contractors with the highest risk factors are prioritized and agencies requiring follow up received a CIP. • Tracking Use of the Risk Assessment: Annually, the PQIB identifies risk criteria for the upcoming Fiscal Year (FY) monitoring through the Contract Monitoring Protocols Agreement document. Using the Consultant Caseload Cohorts spreadsheet staff identify the agencies they will monitor using the FY Monitoring Priorities criteria (risk assessment criteria). The PQIB Travel Team and Administrators review the monitoring schedules for each consultant to ensure the risk assessment criteria has been followed. The risk assessment criteria are reviewed and updated annually based on trends and support needs of the field. In FY 2023-2024 PQIB implemented a cohort review cycle to apply the risk assessment criteria to all contracted programs subject to monitoring reviews. • Maintaining Monitoring Reports: Each Contract Monitoring Report includes a “Monitoring Summary Page” containing all items reviewed during a Contract Monitoring Review (CMR). Any item from the Program Integrity Monitoring Tool identified during a review as unmet and/or identified for a CIP is automatically tracked by the analysts for follow-up and resolution. A spreadsheet with all the reviews scheduled for any contract monitoring visit are maintained by FY and the findings are recorded for each item on the tool. The PQIB analysts track the review dates, reports, findings, and CIPs. The analysts meet with the administrators monthly to track missing reports. All reports are filed by individual agency. • Continuous Improvement Plan (CIP): The PQIB analysts use the Contract Monitoring Report to determine if a CIP is required. A standard CIP template was developed, and all staff are required to use the same document. Every CIP has a 45-day corrective action period; however, programs may be granted extensions if requested in writing. Programs can request up to an additional 180 days to complete corrective actions. To receive an extension, a plan must be submitted in writing detailing how the program will address the actions by the end of the extension period. The PQIB analyst conducts follow-up with the consultant until the CIP is received. The CIP is not closed until all items identified for corrective action are resolved. A completed CIP and Resolution Letter are sent to the contractor and filed in the Common Folder in the agency’s folder. All spreadsheets, agreements, forms, and records of completed monitoring reports referenced above are maintained in the Common Folder and on the PQIB SharePoint page. Furthermore, CDSS is actively working to fully adopt audit report monitoring responsibilities of Local Education Agencies (LEA) and certain non-LEAs receiving Child Care and Development Fund (CCDF) Cluster program funds by July 1, 2025. Estimated Implementation Date: July 1, 2025 Contact: Jeff Fowler, Staff Services Manager III Child Care and Development Program California Department of Social Services

View Audit 352774 Questioned Costs: $1

Finding 554138 (2023-011)

Material Weakness 2023

State of California

CA

Matching / Level of Effort / Earmarking Reporting § 200.303

The CDSS has sufficient internal controls for the Federal Fiscal Year (FFY) 2022 grants onward. The CDSS was not the lead agency for the FFY 2020 and 2021 grants. During those years, the California Department of Education (CDE) held the responsibilities as the lead agency and had custody of the gran...

The CDSS has sufficient internal controls for the Federal Fiscal Year (FFY) 2022 grants onward. The CDSS was not the lead agency for the FFY 2020 and 2021 grants. During those years, the California Department of Education (CDE) held the responsibilities as the lead agency and had custody of the grants. As such, CDSS cannot be held accountable for the reports submitted by CDE. The CDSS is unable to validate or provide commentary on the data or information reported by CDE for those periods. The CDSS is the lead agency for FFY 2022 grants onward and has assumed full responsibilities for all related procedures, including the review, preparation, and submission of quarterly reports with complete and accurate information. The CDSS is diligently monitoring and managing the process to ensure that future reconciliations are conducted with the utmost accuracy and timeliness. The CDSS is also collaborating closely with all relevant stakeholders to ensure that the current data is thoroughly verified and aligned. The CDSS maintains comprehensive documentation supporting all expenditures, including the Schedule of Expenditures of Federal Awards (SEFA) report. Furthermore, CDSS has strengthened our internal checks and improved communication with all involved parties to mitigate the risk of issues arising in future reconciliations. Estimated Implementation Date: Implemented Contact: Daniel During, Federal Reporting Section Chief Accounting and Fiscal Systems Branch Finance and Accounting Division California Department of Social Services

View Audit 352774

Finding 554137 (2023-010)

Material Weakness 2023

State of California

CA

Procurement, Suspension & Debarment Subrecipient Monitoring Allowable Costs / Cost Principles § 200.303

The CDSS agrees with the finding and recognizes the importance of effective report tracking and the timely submission of fiscal and compliance reports, with clearly defined responsibilities and workflows to ensure accuracy. When the grants were transferred from CDE to CDSS, no formal guidance was pr...

The CDSS agrees with the finding and recognizes the importance of effective report tracking and the timely submission of fiscal and compliance reports, with clearly defined responsibilities and workflows to ensure accuracy. When the grants were transferred from CDE to CDSS, no formal guidance was provided during the transition. The delay in submission was due to multiple factors including training new staff, understanding the different pieces of the various grants, and the most impactful factor was the information to produce the Federal Funding Accountability and Transparency Act (FFATA) report. To produce the FFATA report, the Federal Reporting Section (FRS) had to reach out to every contractor, vendor, county, etc. and ask for their assistance to fill out the FFATA report information. This was a labor- and time-consuming process due to the size of the grant. As a result, it took some time for the FRS to gather the necessary information and become fully familiar with the procedures required to prepare the FFATA report. To minimize the risk of late report submission, FRS has ensured that all staff understand the final deadline and all key milestones along the way. The FRS has broken down the report into smaller, manageable tasks within individual deadlines which helps to avoid last-minute rushes and ensure steady progress. The FRS utilizes Microsoft Teams as a project management tool to track deadlines, monitor progress, and send reminders to keep everyone on track. The FRS conducts regular check-ins to discuss progress, address any challenges early, and adjust the plan as needed to prevent delays. Additionally, FRS has created a standardized template to save time and allow the team to work efficiently. Staff are now completing their individual reports ahead of time which gives ample room for review and revisions to ensure the FFATA report is prepared accurately and timely. Estimated Implementation Date: Implemented Contact: Daniel During, Federal Reporting Section Chief Accounting and Fiscal Systems Branch Finance and Accounting Division California Department of Social Services

View Audit 352774

Finding 554135 (2023-018)

Significant Deficiency 2023

State of California

CA

Allowable Costs / Cost Principles Significant Deficiency Matching / Level of Effort / Earmarking § 200.303

DHCS recently implemented and instructed all staff on an improved leave management and timesheet submission process, effective November 20, 2024, beginning with the December 2024 pay period. The change addresses the recommendations from CSA by streamlining the submission, review, and storage of empl...

DHCS recently implemented and instructed all staff on an improved leave management and timesheet submission process, effective November 20, 2024, beginning with the December 2024 pay period. The change addresses the recommendations from CSA by streamlining the submission, review, and storage of employee timesheets, ensuring efficient and transparent management of time-related data across DHCS. Furthermore, the new process ensures a manager or supervisor reviews and approves all timesheets before submission. Estimated Implementation Date: November 20, 2024 Contact: California Department of Health Care Services • Primary – Erika Cristo Assistant Deputy Director, Behavioral Health • Secondary – Wendy Rasmussen, Chief, Office of Compliance - Internal Audits

View Audit 352774

Finding 554133 (2023-017)

Significant Deficiency 2023

State of California

CA

Eligibility Internal Control / Segregation of Duties Procurement, Suspension & Debarment § 200.303

Public Health’s Office of AIDS (OA) agrees with the finding and recommendation. OA introduced and fully implemented an internal Secondary Review (SR) process for all AIDS Drug Assistance Program (ADAP) applications in March 2018. This SR process enables ADAP staff to verify that contracted and certi...

Public Health’s Office of AIDS (OA) agrees with the finding and recommendation. OA introduced and fully implemented an internal Secondary Review (SR) process for all AIDS Drug Assistance Program (ADAP) applications in March 2018. This SR process enables ADAP staff to verify that contracted and certified enrollment workers across California are consistently adhering to eligibility and documentation requirements. However, due to staffing challenges caused by the redirection of staff during the state of emergency declared for the COVID-19 pandemic, ADAP faced significant workforce shortages from March 2020 through much of 2023. This caused a backlog in SR processing, which delayed tasks, including the review of this client’s application. The client’s eligibility lapsed after 130 days, before SR could be conducted. The Eligibility Operations Section (EOS) of ADAP which conducts SR, is now fully staffed and has successfully addressed the backlog. As of early 2024, SR processing has returned to normal operations and is current. Estimated Implementation Date: Already implemented as of April 2024 Contact: Joseph Lagrama, ADAP Branch Chief California Department of Public Health

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Finding 554131 (2023-015)

Material Weakness 2023

State of California

CA

Subrecipient Monitoring Allowable Costs / Cost Principles Internal Control / Segregation of Duties § 200.303

DHCS implemented a process to impose payment withholds for significantly late cost reports, which addresses CSA’s recommendations. As of January 1, 2025, DHCS has issued 26 Notices of Delinquency to contracted counties of Short-Doyle funding (two notices for FY 2015-16, four notices for FY 2016-17, ...

DHCS implemented a process to impose payment withholds for significantly late cost reports, which addresses CSA’s recommendations. As of January 1, 2025, DHCS has issued 26 Notices of Delinquency to contracted counties of Short-Doyle funding (two notices for FY 2015-16, four notices for FY 2016-17, one notice for FY 2018-19, three notices for FY 2019-20, six notices for FY 2020-21, and ten notices for FY 2021-22). DHCS has received positive responses from some of the delinquent counties, stating the cost reports should be submitted shortly. If the counties do not submit their cost reports within 30 calendar days of the delinquency notice, DHCS will send a Notice of Intent to Impose Temporary Withhold of Funds with an option to meet and confer. If a county still has not submitted its cost report within 30 calendar days after Notice of Intent to Impose Temporary Withhold of Funds, the county will be put on Final Notice of Intent to Impose Temporary Withhold of Funds with an effective date of 30 days, at which time a withhold of funds will be processed. Estimated Implementation Date: January 1, 2025 Contact: California Department of Health Care Services • Primary – Ryan Whalen, Behavioral Health Interim Settlement, Section Chief, Audit & Investigations (A&I) Financial Review Outpatient and Behavioral Health Division (FROBHD) • Secondary – Lisa Alder, Behavioral Health Financial Review, Branch Chief, A&I FROBHD • Tertiary – Charles Anders, Behavioral Health Financing Branch, Chief, Local Governmental Financing Division (LGFD)

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Finding 554130 (2023-009)

Material Weakness 2023

State of California

CA

Subrecipient Monitoring Procurement, Suspension & Debarment Allowable Costs / Cost Principles § 200.1 § 200.303 § 200.332 § 200.414 § 200.501

Public Health agrees with the recommendation. Public Health will develop a process for conducting risk assessments of subrecipient funding, develop and implement procedures for obtaining single audit reports from subrecipients, as well as a system to monitor and track compliance with the single audi...

Public Health agrees with the recommendation. Public Health will develop a process for conducting risk assessments of subrecipient funding, develop and implement procedures for obtaining single audit reports from subrecipients, as well as a system to monitor and track compliance with the single audit mandate among subrecipients. Public Health will ensure each subaward includes all requirements imposed on the subrecipient so that the federal award is used in accordance with Federal Statutes, regulations, and terms of conditions of the federal award. Estimated Implementation Date: May 2025 Contact: Melissa Relles, Assistant Deputy Director Division of Operations, Center for Preparedness and Response California Department of Public Health

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Finding 554129 (2023-008)

Material Weakness 2023

State of California

CA

Procurement, Suspension & Debarment § 200.303

Public Health agrees with the recommendation. Public Health will review existing procedures for verifying the suspension and debarment status of vendors before entering into any agreement involving federal funds, and strengthen procedures as required. Estimated Implementation Date: May 2025 Contact:...

Public Health agrees with the recommendation. Public Health will review existing procedures for verifying the suspension and debarment status of vendors before entering into any agreement involving federal funds, and strengthen procedures as required. Estimated Implementation Date: May 2025 Contact: Melissa Relles, Assistant Deputy Director Division of Operations, Center for Preparedness and Response California Department of Public Health

View Audit 352774

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