Reference Number:2022-013Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative AgreementsAssistance Listing Number:93.268Award Number and Year:NH23IP922594 (7/1/19 ? 6/30/24), 5NH23IP922594-02-00 (7/1/19 ? 6/30/24), NH23IP922594-03-00 (7/1/19 ? 6/30/24)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported timely to FSRS during FY 2022.Context:Eight of eight subawards selected for testing were not reported timely to FSRS.Specifically, we noted the following:? 7 of 8 subawards were issued on 7/1/2021 and they were not reported to FSRS until 1/24/2023, or 511 days late.? 1 of 8 subawards was issued on 7/1/2022 and was not reported to FSRS until 1/24/2023, or 146 days late.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department?s internal controls were not sufficient to ensure that subawards were reported timely to FSRS.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements.Views of responsible officials:The Department of Health, Division of Epidemiology, Environmental and Occupational Health?s (DEEOH), Vaccine Preventable Disease Program (VPDP) will attain full compliance with Federal Funding Accountability and Transparency Act (FFATA) requirements. The VPDP on boarded a full-time lead fiscal/grants officer in August 2022 to oversee the Immunization Cooperative Agreements, including COVID-19 supplemental funding. VPDP fiscal/grants leadership will implement FFATA procedures for the Immunization Cooperative Agreement. These procedures shall include creating a list of all active first-tier subawards of federal funds DEEOH has issued at $30,000 or more under this Cooperative Agreement. The list will include all the data fields required for FFATA reporting. DEEOH fiscal/grants leadership will ensure each of the identified sub-awards is entered on the FFATA Subaward Reporting System (FSRS) website within 30 days of award issuance or award amendment.
Reference Number:2022-013Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative AgreementsAssistance Listing Number:93.268Award Number and Year:NH23IP922594 (7/1/19 ? 6/30/24), 5NH23IP922594-02-00 (7/1/19 ? 6/30/24), NH23IP922594-03-00 (7/1/19 ? 6/30/24)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported timely to FSRS during FY 2022.Context:Eight of eight subawards selected for testing were not reported timely to FSRS.Specifically, we noted the following:? 7 of 8 subawards were issued on 7/1/2021 and they were not reported to FSRS until 1/24/2023, or 511 days late.? 1 of 8 subawards was issued on 7/1/2022 and was not reported to FSRS until 1/24/2023, or 146 days late.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department?s internal controls were not sufficient to ensure that subawards were reported timely to FSRS.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements.Views of responsible officials:The Department of Health, Division of Epidemiology, Environmental and Occupational Health?s (DEEOH), Vaccine Preventable Disease Program (VPDP) will attain full compliance with Federal Funding Accountability and Transparency Act (FFATA) requirements. The VPDP on boarded a full-time lead fiscal/grants officer in August 2022 to oversee the Immunization Cooperative Agreements, including COVID-19 supplemental funding. VPDP fiscal/grants leadership will implement FFATA procedures for the Immunization Cooperative Agreement. These procedures shall include creating a list of all active first-tier subawards of federal funds DEEOH has issued at $30,000 or more under this Cooperative Agreement. The list will include all the data fields required for FFATA reporting. DEEOH fiscal/grants leadership will ensure each of the identified sub-awards is entered on the FFATA Subaward Reporting System (FSRS) website within 30 days of award issuance or award amendment.
Reference Number:2022-013Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Immunization Cooperative Agreements, COVID-19 - Immunization Cooperative AgreementsAssistance Listing Number:93.268Award Number and Year:NH23IP922594 (7/1/19 ? 6/30/24), 5NH23IP922594-02-00 (7/1/19 ? 6/30/24), NH23IP922594-03-00 (7/1/19 ? 6/30/24)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported timely to FSRS during FY 2022.Context:Eight of eight subawards selected for testing were not reported timely to FSRS.Specifically, we noted the following:? 7 of 8 subawards were issued on 7/1/2021 and they were not reported to FSRS until 1/24/2023, or 511 days late.? 1 of 8 subawards was issued on 7/1/2022 and was not reported to FSRS until 1/24/2023, or 146 days late.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department?s internal controls were not sufficient to ensure that subawards were reported timely to FSRS.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements.Views of responsible officials:The Department of Health, Division of Epidemiology, Environmental and Occupational Health?s (DEEOH), Vaccine Preventable Disease Program (VPDP) will attain full compliance with Federal Funding Accountability and Transparency Act (FFATA) requirements. The VPDP on boarded a full-time lead fiscal/grants officer in August 2022 to oversee the Immunization Cooperative Agreements, including COVID-19 supplemental funding. VPDP fiscal/grants leadership will implement FFATA procedures for the Immunization Cooperative Agreement. These procedures shall include creating a list of all active first-tier subawards of federal funds DEEOH has issued at $30,000 or more under this Cooperative Agreement. The list will include all the data fields required for FFATA reporting. DEEOH fiscal/grants leadership will ensure each of the identified sub-awards is entered on the FFATA Subaward Reporting System (FSRS) website within 30 days of award issuance or award amendment.
Reference Number:2022-014Prior Year Finding:2021-016Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6NU50CK000525 (8/1/2019 ? 7/31/2024), 6 NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 ? 7/31/2024)Compliance Requirement:Suspension and DebarmentType of FindingMaterial Weakness in Internal Control Over ComplianceCriteria or specific requirement:Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department could not provide support that it ensured its vendors were not suspended or debarred before issuing contracts to the entity.Context:The suspension and debarment status for eight of eight vendors was not documented. DRAFT4/18/2023Questioned costs:There are no questioned costs related to this finding as the vendors were not federally suspended or debarred.Cause:The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing contracts to its vendors.Effect:If the suspension and debarment status of vendors is not verified when entering into covered transactions, it is possible that a contract could be issued to an ineligible vendor.Recommendation:We recommend the Department implement controls and procedures to ensure suspension and debarments checks are adequately documented and maintained in the vendor procurement files.Views of responsible officials:The New Jersey Department of Health?s (DOH) Central Procurement recently implemented revised Department policy FMC-23-02 and is working with the DOH divisional procurement staff within the agency to achieve full compliance. The revised policy circular includes the debarment language identified as missing in the previous FMC 21-02 policy.
Reference Number:2022-015Prior Year Finding:2021-017Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6NU50CK000525 (8/1/2019 ? 7/31/2024), 6NU50CK000525 (8/1/2019 ? 7/31/2024), 6NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 ? 7/31/2024)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of Finding:Material Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported timely to FSRS by the Department of Health (Department) during FY 2022.Context:Twenty-one of twenty-one subawards selected for testing were not reported timely to FSRS. Specifically, we noted the following:? 13 of 13 subawards issued between July and December 2020 were reported to FSRS between 273 and 725 days late.? 8 of 8 subawards issued in July and October 2021 were reported to FSRS between 244 and 512 days late.? Of the exceptions noted, 12 subawards totaling $10.6 million were not reported to FSRS until January 2023.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department?s internal controls were not sufficient to ensure that subawards were reported timely to FSRS.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements.Views of responsible officials:With the Corrective Action Plan (CAP) previously developed as a result of the prior year 2021 audit finding, the Department?s Grants Unit with coordination from ELC program fiscal staff added a new function to the SAGE system that pulls all subaward data for all of ELC using its assigned ALN number 93.323. This system change was implemented in September 2022 that allows SAGE to pull data by CFDA number and enables the ELC fiscal staff to access all ELC subawards. ELC fiscal staff also has a reminder set to report at the end of each month, to enter FFATA information into FSRS, and to upload each report to SharePoint ELC Document Library at the end of each month.As per the prior year CAP created in September 2022, FFATA information for ELC subawards began being entered into FSRS on September 1, 2022.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Per 2 CFR 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards:(a) Be necessary and reasonable for the performance of the Federal award and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to Federally financed and other activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.(e) Be determined following generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only, as otherwise provided for in this part.(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other Federally financed program in either the current or a prior period. See also ?200.306 Cost sharing or matching paragraph (b).(g) Be adequately documented.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control-Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Reference Number:2022-014Prior Year Finding:2021-016Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6NU50CK000525 (8/1/2019 ? 7/31/2024), 6 NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 ? 7/31/2024)Compliance Requirement:Suspension and DebarmentType of FindingMaterial Weakness in Internal Control Over ComplianceCriteria or specific requirement:Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department could not provide support that it ensured its vendors were not suspended or debarred before issuing contracts to the entity.Context:The suspension and debarment status for eight of eight vendors was not documented. DRAFT4/18/2023Questioned costs:There are no questioned costs related to this finding as the vendors were not federally suspended or debarred.Cause:The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing contracts to its vendors.Effect:If the suspension and debarment status of vendors is not verified when entering into covered transactions, it is possible that a contract could be issued to an ineligible vendor.Recommendation:We recommend the Department implement controls and procedures to ensure suspension and debarments checks are adequately documented and maintained in the vendor procurement files.Views of responsible officials:The New Jersey Department of Health?s (DOH) Central Procurement recently implemented revised Department policy FMC-23-02 and is working with the DOH divisional procurement staff within the agency to achieve full compliance. The revised policy circular includes the debarment language identified as missing in the previous FMC 21-02 policy.
Reference Number:2022-015Prior Year Finding:2021-017Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6NU50CK000525 (8/1/2019 ? 7/31/2024), 6NU50CK000525 (8/1/2019 ? 7/31/2024), 6NU50CK000525-02-03 (8/1/2020 - 7/31/2024), 5NU50CK000525-03-00 (8/1/2019 ? 7/31/2024)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of Finding:Material Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported timely to FSRS by the Department of Health (Department) during FY 2022.Context:Twenty-one of twenty-one subawards selected for testing were not reported timely to FSRS. Specifically, we noted the following:? 13 of 13 subawards issued between July and December 2020 were reported to FSRS between 273 and 725 days late.? 8 of 8 subawards issued in July and October 2021 were reported to FSRS between 244 and 512 days late.? Of the exceptions noted, 12 subawards totaling $10.6 million were not reported to FSRS until January 2023.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department?s internal controls were not sufficient to ensure that subawards were reported timely to FSRS.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements.Views of responsible officials:With the Corrective Action Plan (CAP) previously developed as a result of the prior year 2021 audit finding, the Department?s Grants Unit with coordination from ELC program fiscal staff added a new function to the SAGE system that pulls all subaward data for all of ELC using its assigned ALN number 93.323. This system change was implemented in September 2022 that allows SAGE to pull data by CFDA number and enables the ELC fiscal staff to access all ELC subawards. ELC fiscal staff also has a reminder set to report at the end of each month, to enter FFATA information into FSRS, and to upload each report to SharePoint ELC Document Library at the end of each month.As per the prior year CAP created in September 2022, FFATA information for ELC subawards began being entered into FSRS on September 1, 2022.
Reference Number:2022-016Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of HealthFederal Program:Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Assistance Listing Number:93.323Award Number and Year:6 NU62PS924524-01-04 (2018), 18NU62PS924524 (2019), 5 NU62PS924524-03-00 (2020), 6 NU62PS924524-03-02 (2020)Compliance Requirement:Allowable Costs/Cost PrinciplesType of Finding:Material Weakness in Internal Control Over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Per 2 CFR 200.403, except where otherwise authorized by statute, costs must meet the following general criteria to be allowable under Federal awards:(a) Be necessary and reasonable for the performance of the Federal award and be allocable under these principles.(b) Conform to any limitations or exclusions outlined in these principles or the Federal award regarding types or amount of cost items.(c) Be consistent with policies and procedures that apply uniformly to Federally financed and other activities of the non-Federal entity.(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.(e) Be determined following generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only, as otherwise provided for in this part.(f) Not be included as a cost or used to meet cost sharing or matching requirements of any other Federally financed program in either the current or a prior period. See also ?200.306 Cost sharing or matching paragraph (b).(g) Be adequately documented.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control-Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health (Department) was unable to provide supporting documentation for disbursement transactions charged to the program.Context:The Department was unable to provide supporting documentation for 17 of 60 disbursement transactions selected for testing. Auditors were not able to verify whether the expenditures were allowable per program requirements nor that they had been properly reviewed and approved.Questioned costs:Questioned costs of $59,466 represent the total of unsupported disbursements charged to the program.Cause:The Department?s procedures and controls were not sufficient to ensure that expenditures charged to the program were allowable and properly documented in accordance with federal requirements.Effect:Unallowable and unapproved costs may have been charged to the program.Recommendation:We recommend that the Department review its current procedures and controls to ensure that all expenditures charged to the program are supported by documentation, are properly reviewed and approved, and that documentation is readily available for audit. The Department should not seek federal reimbursement unless it can substantiate that disbursements are allowable and properly approved.Views of responsible officials:Due to the COVID-19 pandemic and the resulting remote teleworking period that was in place at the Department of Health (DOH) during the FY 2022 audit period, some payment documents were approved remotely without physical documents in hand, and the payment documentation for the 17 of 60 ELC general disbursement transactions examined were either not delivered to the office to be filed yet or have been delivered but misfiled. DOH Central Accounts Payable will review and improve its current procedures and controls to ensure all physical payment documents are reviewed, approved, and filed correctly under the current hybrid remote working conditions in place now since the pandemic ceased.
Reference Number:2022-017Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of Finding:Material Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported to FSRS during FY 2022.Context:Zero of eight subrecipients selected for testing were reported to FSRS during FY 2022. Total subawards tested were $3,241,668, and $0 was reported as required by FFATA requirements.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:During FY 2022, there was a vacancy in the Department?s staffing assigned to FFATA reporting, a breakdown in the transition responsibilities for the position, and a delay in hiring a replacement.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department cross-train staff to ensure it maintains capacity to meet FFATA requirements in the event that a staffing vacancy occurs in the future.Views of responsible officials:The Department of Community Affairs (DCA) now has a staff member in place with assigned responsibility for the FFATA reporting in the Federal Subaward Reporting System (FSRS) and other required federal reporting. To ensure that all required reporting in FSRS is completed timely, the process and procedures will be fully documented and the LIHEAP program manager will verify completion each month. DCA will also hire additional staff or cross-train current staff to further support the federal reporting function.
Reference Number:2022-018Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Cash ManagementType of Finding:Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200.302, each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Community Affairs (Department) was not able to provide documentation that drawdown requests had been properly approved.Context:Two of eight drawdown requests selected did not have evidence of supervisory approval prior to submission of the requests to the federal agency. The amounts drawn down for the two samples were $282,956 and $74,916 respectively.Questioned costs:None noted.Cause:The Department?s procedures were not sufficient to ensure that drawdown requests were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors.Effect:Without proper review and approval of drawdown requests, the amounts requested could be inaccurate which could result in the Department receiving program funds to which it is not entitled.Recommendation:We recommend that the Department review and enhance its procedures and controls to ensure that cash drawdowns are reviewed and approved prior to submission to the federal agency.Views of responsible officials:The Department of Community Affairs (DCA) staff responsible for the LIHEAP cash management function retired prior to this audit period without a proper transition of these tasks and there was also a delay in refilling the position. As recommended, the DCA has reviewed current procedures and controls regarding cash drawdown approvals and has developed a Policy Memo that details the Payment Management System (PMS) drawdown procedures going forward. For each request made, a Contract Administrator will produce a Business Object report for all transactions to be included in the drawdown and will send the report to the Program staff for review and approval that the amounts contained in the report are correct. Once the Program staff review is complete, the approved Business Object report will be forwarded with a cover email to the Division Fiscal Unit staff responsible for drawing down the funds in PMS for final processing.Views of responsible officials:
Reference Number:2022-019Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Reporting ? Performance and Special ReportingType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? State grantees must submit this report by January 31st regarding the prior federal fiscal year. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service.Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported.Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Community Affairs (Department) did not submit performance and special reports timely. The LIHEAP Performance Data Form and the LIHEAP Carryover and Reallotment Report were submitted after their respective due dates.Context:We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP which were due during FY2022. The following exceptions were noted:? One of one LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 1/31/2022 but was not submitted until 4/22/2022, or 81 days late.? One of one LIHEAP Carryover and Reallotment Reports was not submitted timely. The report was due by 8/1/2021, but was not submitted until 11/16/2021, or 107 days late.Questioned costs:None noted.Cause:The Department?s procedures were not sufficient to ensure that the LIHEAP Performance Data Form and the LIHEAP Carryover and Reallotment Report were submitted timely. Internal controls did not prevent or detect the errors.Effect:Delays in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor.Recommendation:We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely.Views of responsible officials:All performance and special reports noted in the audit finding must be approved by the Applied Public Policy Research Institute for Study and Evaluation (APPRISE - U.S. Department of Health and Human Services (USDHHS) Consultants) before they are submitted to USDHHS. The final reports noted as exceptions were not submitted on time due to pandemic related complications, staff retirements and communication issues with APPRISE. As recommended, the Department of Community Affairs (DCA) has reviewed current reporting procedures and Program staff will be assigned the responsibility to prepare all reports, work with APPRISE to obtain required approvals, and submit the all required reports on a timely basis. Reporting due dates and deadlines will be documented to ensure that initial reports are produced timely. The timeframe needed to coordinate with the APPRISE consultants for reviews and updates to the reports will also be built into the process so that final reports are submitted to USDHHS by the due date. All reporting procedures will be documented and distributed to LIHEAP program staff.
Reference Number:2022-017Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of Finding:Material Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported to FSRS during FY 2022.Context:Zero of eight subrecipients selected for testing were reported to FSRS during FY 2022. Total subawards tested were $3,241,668, and $0 was reported as required by FFATA requirements.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:During FY 2022, there was a vacancy in the Department?s staffing assigned to FFATA reporting, a breakdown in the transition responsibilities for the position, and a delay in hiring a replacement.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department cross-train staff to ensure it maintains capacity to meet FFATA requirements in the event that a staffing vacancy occurs in the future.Views of responsible officials:The Department of Community Affairs (DCA) now has a staff member in place with assigned responsibility for the FFATA reporting in the Federal Subaward Reporting System (FSRS) and other required federal reporting. To ensure that all required reporting in FSRS is completed timely, the process and procedures will be fully documented and the LIHEAP program manager will verify completion each month. DCA will also hire additional staff or cross-train current staff to further support the federal reporting function.
Reference Number:2022-018Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Cash ManagementType of Finding:Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200.302, each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Community Affairs (Department) was not able to provide documentation that drawdown requests had been properly approved.Context:Two of eight drawdown requests selected did not have evidence of supervisory approval prior to submission of the requests to the federal agency. The amounts drawn down for the two samples were $282,956 and $74,916 respectively.Questioned costs:None noted.Cause:The Department?s procedures were not sufficient to ensure that drawdown requests were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors.Effect:Without proper review and approval of drawdown requests, the amounts requested could be inaccurate which could result in the Department receiving program funds to which it is not entitled.Recommendation:We recommend that the Department review and enhance its procedures and controls to ensure that cash drawdowns are reviewed and approved prior to submission to the federal agency.Views of responsible officials:The Department of Community Affairs (DCA) staff responsible for the LIHEAP cash management function retired prior to this audit period without a proper transition of these tasks and there was also a delay in refilling the position. As recommended, the DCA has reviewed current procedures and controls regarding cash drawdown approvals and has developed a Policy Memo that details the Payment Management System (PMS) drawdown procedures going forward. For each request made, a Contract Administrator will produce a Business Object report for all transactions to be included in the drawdown and will send the report to the Program staff for review and approval that the amounts contained in the report are correct. Once the Program staff review is complete, the approved Business Object report will be forwarded with a cover email to the Division Fiscal Unit staff responsible for drawing down the funds in PMS for final processing.Views of responsible officials:
Reference Number:2022-019Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Community AffairsFederal Program:Low-Income Home Energy Assistance, COVID-19 - Low-Income Home Energy AssistanceAssistance Listing Number:93.568Award Number and Year:2102NJE5C6 (3/11/21 ? 9/30/22), 2001NJE5C3 (3/27/20 ? 9/30/21), G-1701NJLIEA (10/1/16 ? 9/30/18), G-1801NJLIEA (10/1/17 ? 9/30/19), 2202NJLIEA (10/1/21 ? 9/30/22), 2001NJLIEA (10/1/19 ? 9/30/22), 2102NJLIEA (10/1/20 ? 9/30/21)Compliance Requirement:Reporting ? Performance and Special ReportingType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? State grantees must submit this report by January 31st regarding the prior federal fiscal year. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service.Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported.Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Community Affairs (Department) did not submit performance and special reports timely. The LIHEAP Performance Data Form and the LIHEAP Carryover and Reallotment Report were submitted after their respective due dates.Context:We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP which were due during FY2022. The following exceptions were noted:? One of one LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 1/31/2022 but was not submitted until 4/22/2022, or 81 days late.? One of one LIHEAP Carryover and Reallotment Reports was not submitted timely. The report was due by 8/1/2021, but was not submitted until 11/16/2021, or 107 days late.Questioned costs:None noted.Cause:The Department?s procedures were not sufficient to ensure that the LIHEAP Performance Data Form and the LIHEAP Carryover and Reallotment Report were submitted timely. Internal controls did not prevent or detect the errors.Effect:Delays in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor.Recommendation:We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely.Views of responsible officials:All performance and special reports noted in the audit finding must be approved by the Applied Public Policy Research Institute for Study and Evaluation (APPRISE - U.S. Department of Health and Human Services (USDHHS) Consultants) before they are submitted to USDHHS. The final reports noted as exceptions were not submitted on time due to pandemic related complications, staff retirements and communication issues with APPRISE. As recommended, the Department of Community Affairs (DCA) has reviewed current reporting procedures and Program staff will be assigned the responsibility to prepare all reports, work with APPRISE to obtain required approvals, and submit the all required reports on a timely basis. Reporting due dates and deadlines will be documented to ensure that initial reports are produced timely. The timeframe needed to coordinate with the APPRISE consultants for reviews and updates to the reports will also be built into the process so that final reports are submitted to USDHHS by the due date. All reporting procedures will be documented and distributed to LIHEAP program staff.
Reference Number:2022-020Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:CCDF Cluster, COVID-19 ? CCDF ClusterAssistance Listing Number:93.575, 93.596Award Number and Year:2201NJCCDF (10/1/2021 ? 9/30/2024)2201NJCCDD (10/1/2021 ? 9/30/2024)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2019 ? 9/30/2022)2001NJCCDF (10/1/2019- 9/30/2022)2101NJCSC6 (10/1/2020 ? 9/30/2023)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported to FSRS during FY 2022.Context:Zero of eight subrecipients selected for testing were reported to FSRS during FY 2022. Total subawards tested were $27,226,331, and $0 was reported as required by FFATA requirements.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department was unaware of FFATA reporting requirements and did not report subaward information to FSRS during FY 2022.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance.Views of responsible officials:The DHS Division of Family Development (DFD) agrees with the audit finding regarding the submission of subawards to the FFFATA Subaward Reporting System (FSRS).In accordance with the finding recommendation, the DFD will develop internal controls and procedures to ensure the timely reporting of all required subawards to FSRS. An initial review of the FSRS by DFD fiscal staff appeared to indicate that some federal grant data that should be prepopulated on the website was missing (e.g. Child Care M&M available; discretionary not found). DFD will work with the necessary federal agencies to ensure that the Division can input the required information for all awards.Assessment and development of policy and procedures related to this task will take approximately three months. Staff assignment, training, and submission of federal grant information to the federal website will occur over the next State fiscal year 2024.Projected policy and procedures development completion: July 1, 2023.Assignment and submission of federal reports: June 30, 2024.
Reference Number:2022-020Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:CCDF Cluster, COVID-19 ? CCDF ClusterAssistance Listing Number:93.575, 93.596Award Number and Year:2201NJCCDF (10/1/2021 ? 9/30/2024)2201NJCCDD (10/1/2021 ? 9/30/2024)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2019 ? 9/30/2022)2001NJCCDF (10/1/2019- 9/30/2022)2101NJCSC6 (10/1/2020 ? 9/30/2023)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported to FSRS during FY 2022.Context:Zero of eight subrecipients selected for testing were reported to FSRS during FY 2022. Total subawards tested were $27,226,331, and $0 was reported as required by FFATA requirements.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department was unaware of FFATA reporting requirements and did not report subaward information to FSRS during FY 2022.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance.Views of responsible officials:The DHS Division of Family Development (DFD) agrees with the audit finding regarding the submission of subawards to the FFFATA Subaward Reporting System (FSRS).In accordance with the finding recommendation, the DFD will develop internal controls and procedures to ensure the timely reporting of all required subawards to FSRS. An initial review of the FSRS by DFD fiscal staff appeared to indicate that some federal grant data that should be prepopulated on the website was missing (e.g. Child Care M&M available; discretionary not found). DFD will work with the necessary federal agencies to ensure that the Division can input the required information for all awards.Assessment and development of policy and procedures related to this task will take approximately three months. Staff assignment, training, and submission of federal grant information to the federal website will occur over the next State fiscal year 2024.Projected policy and procedures development completion: July 1, 2023.Assignment and submission of federal reports: June 30, 2024.
Reference Number:2022-020Prior Year Finding:NoFederal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:CCDF Cluster, COVID-19 ? CCDF ClusterAssistance Listing Number:93.575, 93.596Award Number and Year:2201NJCCDF (10/1/2021 ? 9/30/2024)2201NJCCDD (10/1/2021 ? 9/30/2024)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2020 ? 9/30/2023)2101NJCCDF (10/1/2019 ? 9/30/2022)2001NJCCDF (10/1/2019- 9/30/2022)2101NJCSC6 (10/1/2020 ? 9/30/2023)Compliance Requirement:Reporting ? Federal Funding Accountability and Transparency Act (FFATA)Type of FindingMaterial Weakness in Internal Control Over Compliance, Material Non-complianceCriteria or specific requirement:Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements.The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.)Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Subaward information was not reported to FSRS during FY 2022.Context:Zero of eight subrecipients selected for testing were reported to FSRS during FY 2022. Total subawards tested were $27,226,331, and $0 was reported as required by FFATA requirements.SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLECause:The Department was unaware of FFATA reporting requirements and did not report subaward information to FSRS during FY 2022.Effect:Subawards were not reported to FSRS in accordance with FFATA requirements.Questioned costs:None noted.Recommendation:We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance.Views of responsible officials:The DHS Division of Family Development (DFD) agrees with the audit finding regarding the submission of subawards to the FFFATA Subaward Reporting System (FSRS).In accordance with the finding recommendation, the DFD will develop internal controls and procedures to ensure the timely reporting of all required subawards to FSRS. An initial review of the FSRS by DFD fiscal staff appeared to indicate that some federal grant data that should be prepopulated on the website was missing (e.g. Child Care M&M available; discretionary not found). DFD will work with the necessary federal agencies to ensure that the Division can input the required information for all awards.Assessment and development of policy and procedures related to this task will take approximately three months. Staff assignment, training, and submission of federal grant information to the federal website will occur over the next State fiscal year 2024.Projected policy and procedures development completion: July 1, 2023.Assignment and submission of federal reports: June 30, 2024.
Reference Number:2022-021Prior Year Finding:NoFederal Agency:Department of Health and Human ServicesState Agency:Department of Children and FamiliesFederal Program:Social Services Block GrantAssistance Listing Number:93.667Award Number and Year:G-2200NJSOSR (10/1/2021 ? 3/30/2023)Compliance Requirement:Period of PerformanceType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance ? A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Social Services Block Grant funds must be expended by the state in the fiscal year allotted or in the succeeding fiscal year.Control ? Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Children and Families (Department) charged costs to the program that were incurred outside of the grant award?s period of performance.Context:Four of forty expenditure transactions selected for testing, totaling $842, were incurred prior to the award start date of October 1, 2021.Questioned costs:$842, the total of expenditures charged to the program that were incurred outside of the grant award?s period of performance.Cause:Accounting staff identified and charged program costs to the incorrect grant. The Department?s review process did not detect the errors nor take timely corrective action.Effect:The Department was not compliant with the grant?s period of performance which could result in the grantor?s disallowance of the costs.Recommendation:We recommend that the Department review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within the grant?s period of performance.Views of responsible officials:The Department of Children and Families (DCF) will review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within each grant award?s specified period of performance.Further, as the federal SSBG grant award cited has a period of performance that remains open through September 2023, DCF has adjusted the four transactions that were posted incorrectly to another available funding source and ensured that all transactions presently recorded are now in compliance and within the specified period of performance.
Reference Number:2022-022Prior Year Finding:2021-019Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Managed Care Financial AuditType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Two types of audits are required for managed care:1. Audited Financial Reports ? The contract with each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) must require them to submit to the state an audited financial report specific to the Medicaid contract on an annual basis. These audits must be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards (42 CFR section 438.3(m)).2. Periodic Audits ? Effective no later than for rating periods for contracts starting on or after July 1, 2017, the state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each MCO, PIHP, and PAHP and post the results of these audits on its website (42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Human Services (Department) received audit reports from its MCOs, but these reports were Agreed Upon Procedures (AUP) reports which were not conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Context:Five of five MCO audit reports received by DMAHS were AUP reports. An AUP engagement is one in which a practitioner is engaged by a client to issue a report of findings based on specific procedures performed on subject matter. The client engages the practitioner to assist specified parties in evaluating subject matter or an assertion as a result of a need or needs of the specified parties.In an engagement performed under this section, the practitioner does not perform an examination or a review, and does not provide an opinion or negative assurance. Therefore, AUP reports do not fulfill the requirement that the audit is conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Questioned costs:Undetermined.Cause:The Department held the opinion that AUP reports were sufficient to meet the requirement of obtaining a financial statement audit report per the flexibility given to States in Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10, dated November 10, 2016.Effect:The Department is unable to ensure that its MCOs were audited in accordance with generally accepted accounting principles and generally accepted auditing standards. Failure to obtain qualified audit reports from its MCOs would result in DMAHS being unaware of deficiencies, corrective action plans or unmet requirements which would be identified as a result of qualified audits.Recommendation:We recommend that The Department update its contracts with its MCOs to remove the language specifying the requirement for an audit conducted specifically in accordance with generally accepted accounting principles and generally accepted auditing standards and instead to specify that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.Views of responsible officials:Based on this audit finding recommendation, Section 7.25.1(B) of the MCO Contract has been updated effective January 2023. The update removes language requiring audits in accordance with generally accepted accounting principles and generally accepted auditing standards and specifies that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.
Reference Number:2022-023Prior Year Finding:2021-014Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Provider EligibilityType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the Office of the Inspector General (OIG) exclusion list are not eligible to be enrolled in the Medicaid program. (See 42 CFR 455.436).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health and Human Services (the Department) did not maintain documentation to support provider eligibility to participate in the Medicaid program. The provider eligibility requirement is administered by a 3rd-party that is required to determine and document the provider?s eligibility with the Department?s requirements. Provider files were incomplete, containing expired licenses or missing key documentation supporting eligibility.Context:The Department contracts with a 3rd party provider to manage medical provider eligibility. The 3rd party provider is responsible for verifying providers? license statuses and that providers meet health and safety standards. We noted that medical provider files maintained by the 3rd party contractor did not consistently support providers? eligibility and compliance with the State?s health and safety standards in accordance with federal and state requirements. A sample of 60 provider files was selected for testing and the following exceptions were noted:? Six of sixty provider files did not have an active license on file. The provider licenses expired and an active license was not obtained and updated in the provider files.? One of sixty provider files did not contain the provider agreement checklist.Questioned costs:Undetermined.Cause:Internal controls of the 3rd party provider were ineffective in ensuring that all required documentation was obtained and maintained in provider files. The Department?s controls over the 3rd party contractor were ineffective in detecting the errors.Effect:Medicaid claims may be paid to ineligible providers which may result in unallowed program costs. The Department is not compliant with the State?s plan for Medicaid.Recommendation:We recommend that the Department continue to review the 3rd party provider?s procedures for determining and documenting provider eligibility and compliance with related State and Federal requirements. The Department should periodically review provider files to determine if all required documentation is maintained in the files.Views of responsible officials:The Department of Human Services? Division of Medical Assistance and Health Services (DMAHS) has unsuccessfully attempted to gain access to data files that would provide current licensure data to our contracted vendor from the State?s licensing agencies. Continuing efforts to outreach providers by sending a license expiration letter to providers 45 days prior to the license expiration date have also been less than successful. Access concerns have discouraged the State?s efforts to deny claims because of expired licenses. It is important to note that the State?s expectations are that providers are properly licensed, but have failed to communicate this information to our contracted vendor. Licensure information for all enrolling providers and those subject to revalidation are also screened in accordance with ACA requirements.DMAHS efforts to achieve compliance with regard to provider licensing in coordination with the State?s contracted vendor remains ongoing and the importance of having license information on file for the providers being enrolled will again be reiterated and reinforced through communications with the contracted vendor and their staff. The vendor has also been approved to continue taking screenshots of providers? licensing information from licensing websites in lieu of the provider sending in paper copies. These ongoing efforts and actions will help to ensure that licensing information is captured and maintained for each provider and the State?s compliance with documenting provider licensing continues to improve and move towards full compliance in future periods.
Reference Number:2022-022Prior Year Finding:2021-019Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Managed Care Financial AuditType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Two types of audits are required for managed care:1. Audited Financial Reports ? The contract with each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) must require them to submit to the state an audited financial report specific to the Medicaid contract on an annual basis. These audits must be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards (42 CFR section 438.3(m)).2. Periodic Audits ? Effective no later than for rating periods for contracts starting on or after July 1, 2017, the state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each MCO, PIHP, and PAHP and post the results of these audits on its website (42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Human Services (Department) received audit reports from its MCOs, but these reports were Agreed Upon Procedures (AUP) reports which were not conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Context:Five of five MCO audit reports received by DMAHS were AUP reports. An AUP engagement is one in which a practitioner is engaged by a client to issue a report of findings based on specific procedures performed on subject matter. The client engages the practitioner to assist specified parties in evaluating subject matter or an assertion as a result of a need or needs of the specified parties.In an engagement performed under this section, the practitioner does not perform an examination or a review, and does not provide an opinion or negative assurance. Therefore, AUP reports do not fulfill the requirement that the audit is conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Questioned costs:Undetermined.Cause:The Department held the opinion that AUP reports were sufficient to meet the requirement of obtaining a financial statement audit report per the flexibility given to States in Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10, dated November 10, 2016.Effect:The Department is unable to ensure that its MCOs were audited in accordance with generally accepted accounting principles and generally accepted auditing standards. Failure to obtain qualified audit reports from its MCOs would result in DMAHS being unaware of deficiencies, corrective action plans or unmet requirements which would be identified as a result of qualified audits.Recommendation:We recommend that The Department update its contracts with its MCOs to remove the language specifying the requirement for an audit conducted specifically in accordance with generally accepted accounting principles and generally accepted auditing standards and instead to specify that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.Views of responsible officials:Based on this audit finding recommendation, Section 7.25.1(B) of the MCO Contract has been updated effective January 2023. The update removes language requiring audits in accordance with generally accepted accounting principles and generally accepted auditing standards and specifies that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.
Reference Number:2022-023Prior Year Finding:2021-014Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Provider EligibilityType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the Office of the Inspector General (OIG) exclusion list are not eligible to be enrolled in the Medicaid program. (See 42 CFR 455.436).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health and Human Services (the Department) did not maintain documentation to support provider eligibility to participate in the Medicaid program. The provider eligibility requirement is administered by a 3rd-party that is required to determine and document the provider?s eligibility with the Department?s requirements. Provider files were incomplete, containing expired licenses or missing key documentation supporting eligibility.Context:The Department contracts with a 3rd party provider to manage medical provider eligibility. The 3rd party provider is responsible for verifying providers? license statuses and that providers meet health and safety standards. We noted that medical provider files maintained by the 3rd party contractor did not consistently support providers? eligibility and compliance with the State?s health and safety standards in accordance with federal and state requirements. A sample of 60 provider files was selected for testing and the following exceptions were noted:? Six of sixty provider files did not have an active license on file. The provider licenses expired and an active license was not obtained and updated in the provider files.? One of sixty provider files did not contain the provider agreement checklist.Questioned costs:Undetermined.Cause:Internal controls of the 3rd party provider were ineffective in ensuring that all required documentation was obtained and maintained in provider files. The Department?s controls over the 3rd party contractor were ineffective in detecting the errors.Effect:Medicaid claims may be paid to ineligible providers which may result in unallowed program costs. The Department is not compliant with the State?s plan for Medicaid.Recommendation:We recommend that the Department continue to review the 3rd party provider?s procedures for determining and documenting provider eligibility and compliance with related State and Federal requirements. The Department should periodically review provider files to determine if all required documentation is maintained in the files.Views of responsible officials:The Department of Human Services? Division of Medical Assistance and Health Services (DMAHS) has unsuccessfully attempted to gain access to data files that would provide current licensure data to our contracted vendor from the State?s licensing agencies. Continuing efforts to outreach providers by sending a license expiration letter to providers 45 days prior to the license expiration date have also been less than successful. Access concerns have discouraged the State?s efforts to deny claims because of expired licenses. It is important to note that the State?s expectations are that providers are properly licensed, but have failed to communicate this information to our contracted vendor. Licensure information for all enrolling providers and those subject to revalidation are also screened in accordance with ACA requirements.DMAHS efforts to achieve compliance with regard to provider licensing in coordination with the State?s contracted vendor remains ongoing and the importance of having license information on file for the providers being enrolled will again be reiterated and reinforced through communications with the contracted vendor and their staff. The vendor has also been approved to continue taking screenshots of providers? licensing information from licensing websites in lieu of the provider sending in paper copies. These ongoing efforts and actions will help to ensure that licensing information is captured and maintained for each provider and the State?s compliance with documenting provider licensing continues to improve and move towards full compliance in future periods.
Reference Number:2022-022Prior Year Finding:2021-019Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Managed Care Financial AuditType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Two types of audits are required for managed care:1. Audited Financial Reports ? The contract with each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) must require them to submit to the state an audited financial report specific to the Medicaid contract on an annual basis. These audits must be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards (42 CFR section 438.3(m)).2. Periodic Audits ? Effective no later than for rating periods for contracts starting on or after July 1, 2017, the state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each MCO, PIHP, and PAHP and post the results of these audits on its website (42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Human Services (Department) received audit reports from its MCOs, but these reports were Agreed Upon Procedures (AUP) reports which were not conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Context:Five of five MCO audit reports received by DMAHS were AUP reports. An AUP engagement is one in which a practitioner is engaged by a client to issue a report of findings based on specific procedures performed on subject matter. The client engages the practitioner to assist specified parties in evaluating subject matter or an assertion as a result of a need or needs of the specified parties.In an engagement performed under this section, the practitioner does not perform an examination or a review, and does not provide an opinion or negative assurance. Therefore, AUP reports do not fulfill the requirement that the audit is conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Questioned costs:Undetermined.Cause:The Department held the opinion that AUP reports were sufficient to meet the requirement of obtaining a financial statement audit report per the flexibility given to States in Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10, dated November 10, 2016.Effect:The Department is unable to ensure that its MCOs were audited in accordance with generally accepted accounting principles and generally accepted auditing standards. Failure to obtain qualified audit reports from its MCOs would result in DMAHS being unaware of deficiencies, corrective action plans or unmet requirements which would be identified as a result of qualified audits.Recommendation:We recommend that The Department update its contracts with its MCOs to remove the language specifying the requirement for an audit conducted specifically in accordance with generally accepted accounting principles and generally accepted auditing standards and instead to specify that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.Views of responsible officials:Based on this audit finding recommendation, Section 7.25.1(B) of the MCO Contract has been updated effective January 2023. The update removes language requiring audits in accordance with generally accepted accounting principles and generally accepted auditing standards and specifies that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.
Reference Number:2022-023Prior Year Finding:2021-014Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Provider EligibilityType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the Office of the Inspector General (OIG) exclusion list are not eligible to be enrolled in the Medicaid program. (See 42 CFR 455.436).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health and Human Services (the Department) did not maintain documentation to support provider eligibility to participate in the Medicaid program. The provider eligibility requirement is administered by a 3rd-party that is required to determine and document the provider?s eligibility with the Department?s requirements. Provider files were incomplete, containing expired licenses or missing key documentation supporting eligibility.Context:The Department contracts with a 3rd party provider to manage medical provider eligibility. The 3rd party provider is responsible for verifying providers? license statuses and that providers meet health and safety standards. We noted that medical provider files maintained by the 3rd party contractor did not consistently support providers? eligibility and compliance with the State?s health and safety standards in accordance with federal and state requirements. A sample of 60 provider files was selected for testing and the following exceptions were noted:? Six of sixty provider files did not have an active license on file. The provider licenses expired and an active license was not obtained and updated in the provider files.? One of sixty provider files did not contain the provider agreement checklist.Questioned costs:Undetermined.Cause:Internal controls of the 3rd party provider were ineffective in ensuring that all required documentation was obtained and maintained in provider files. The Department?s controls over the 3rd party contractor were ineffective in detecting the errors.Effect:Medicaid claims may be paid to ineligible providers which may result in unallowed program costs. The Department is not compliant with the State?s plan for Medicaid.Recommendation:We recommend that the Department continue to review the 3rd party provider?s procedures for determining and documenting provider eligibility and compliance with related State and Federal requirements. The Department should periodically review provider files to determine if all required documentation is maintained in the files.Views of responsible officials:The Department of Human Services? Division of Medical Assistance and Health Services (DMAHS) has unsuccessfully attempted to gain access to data files that would provide current licensure data to our contracted vendor from the State?s licensing agencies. Continuing efforts to outreach providers by sending a license expiration letter to providers 45 days prior to the license expiration date have also been less than successful. Access concerns have discouraged the State?s efforts to deny claims because of expired licenses. It is important to note that the State?s expectations are that providers are properly licensed, but have failed to communicate this information to our contracted vendor. Licensure information for all enrolling providers and those subject to revalidation are also screened in accordance with ACA requirements.DMAHS efforts to achieve compliance with regard to provider licensing in coordination with the State?s contracted vendor remains ongoing and the importance of having license information on file for the providers being enrolled will again be reiterated and reinforced through communications with the contracted vendor and their staff. The vendor has also been approved to continue taking screenshots of providers? licensing information from licensing websites in lieu of the provider sending in paper copies. These ongoing efforts and actions will help to ensure that licensing information is captured and maintained for each provider and the State?s compliance with documenting provider licensing continues to improve and move towards full compliance in future periods.
Reference Number:2022-022Prior Year Finding:2021-019Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Managed Care Financial AuditType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Two types of audits are required for managed care:1. Audited Financial Reports ? The contract with each Managed Care Organization (MCO), Prepaid Inpatient Health Plan (PIHP), and Prepaid Ambulatory Health Plan (PAHP) must require them to submit to the state an audited financial report specific to the Medicaid contract on an annual basis. These audits must be conducted in accordance with generally accepted accounting principles and generally accepted auditing standards (42 CFR section 438.3(m)).2. Periodic Audits ? Effective no later than for rating periods for contracts starting on or after July 1, 2017, the state must periodically, but no less frequently than once every three years, conduct, or contract for an independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by, or on behalf of each MCO, PIHP, and PAHP and post the results of these audits on its website (42 CFR section 438.602(e) and (g); May 6, 2016, Federal Register (81 FR 27497); OMB No. 0938-0920).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Human Services (Department) received audit reports from its MCOs, but these reports were Agreed Upon Procedures (AUP) reports which were not conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Context:Five of five MCO audit reports received by DMAHS were AUP reports. An AUP engagement is one in which a practitioner is engaged by a client to issue a report of findings based on specific procedures performed on subject matter. The client engages the practitioner to assist specified parties in evaluating subject matter or an assertion as a result of a need or needs of the specified parties.In an engagement performed under this section, the practitioner does not perform an examination or a review, and does not provide an opinion or negative assurance. Therefore, AUP reports do not fulfill the requirement that the audit is conducted in accordance with generally accepted accounting principles and generally accepted auditing standards.Questioned costs:Undetermined.Cause:The Department held the opinion that AUP reports were sufficient to meet the requirement of obtaining a financial statement audit report per the flexibility given to States in Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10, dated November 10, 2016.Effect:The Department is unable to ensure that its MCOs were audited in accordance with generally accepted accounting principles and generally accepted auditing standards. Failure to obtain qualified audit reports from its MCOs would result in DMAHS being unaware of deficiencies, corrective action plans or unmet requirements which would be identified as a result of qualified audits.Recommendation:We recommend that The Department update its contracts with its MCOs to remove the language specifying the requirement for an audit conducted specifically in accordance with generally accepted accounting principles and generally accepted auditing standards and instead to specify that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.Views of responsible officials:Based on this audit finding recommendation, Section 7.25.1(B) of the MCO Contract has been updated effective January 2023. The update removes language requiring audits in accordance with generally accepted accounting principles and generally accepted auditing standards and specifies that an AUP report is acceptable per guidance provided under Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) Frequently Asked Question number Q10.
Reference Number:2022-023Prior Year Finding:2021-014Federal Agency:U.S. Department of Health and Human ServicesState Agency:Department of Human ServicesFederal Program:Medicaid Cluster, COVID-19 - Medicaid ClusterAssistance Listing Number:93.775, 93.777, 93.778Award Number and Year:2205NJ5MAP (10/1/2021 ? 9/30/2022)2205NJ5ADM (10/1/2021 ? 9/30/2022)Compliance Requirement:Special Tests and Provisions: Provider EligibilityType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: In order to receive Medicaid payments, providers must: (1) be licensed in accordance with federal, state, and local laws and regulations to participate in the Medicaid program (42 CFR sections 431.107 and 447.10; and Section 1902(a)(9) of the Social Security Act (42 USC 1396a(a)(9)); (2) screened and enrolled in accordance with 42 CFR Part 455, Subpart E (sections 455.400 through 455.470); and make certain disclosures to the state (42 CFR Part 455, Subpart B, sections 455.100 through 455.106). Medicaid managed care network providers are subject to the same disclosure, screening, enrollment, and termination requirements that apply to Medicaid fee-for-service providers in accordance with 42 CFR Part 438, Subpart H. Providers who have been barred from participation by the Office of the Inspector General (OIG) exclusion list are not eligible to be enrolled in the Medicaid program. (See 42 CFR 455.436).Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Health and Human Services (the Department) did not maintain documentation to support provider eligibility to participate in the Medicaid program. The provider eligibility requirement is administered by a 3rd-party that is required to determine and document the provider?s eligibility with the Department?s requirements. Provider files were incomplete, containing expired licenses or missing key documentation supporting eligibility.Context:The Department contracts with a 3rd party provider to manage medical provider eligibility. The 3rd party provider is responsible for verifying providers? license statuses and that providers meet health and safety standards. We noted that medical provider files maintained by the 3rd party contractor did not consistently support providers? eligibility and compliance with the State?s health and safety standards in accordance with federal and state requirements. A sample of 60 provider files was selected for testing and the following exceptions were noted:? Six of sixty provider files did not have an active license on file. The provider licenses expired and an active license was not obtained and updated in the provider files.? One of sixty provider files did not contain the provider agreement checklist.Questioned costs:Undetermined.Cause:Internal controls of the 3rd party provider were ineffective in ensuring that all required documentation was obtained and maintained in provider files. The Department?s controls over the 3rd party contractor were ineffective in detecting the errors.Effect:Medicaid claims may be paid to ineligible providers which may result in unallowed program costs. The Department is not compliant with the State?s plan for Medicaid.Recommendation:We recommend that the Department continue to review the 3rd party provider?s procedures for determining and documenting provider eligibility and compliance with related State and Federal requirements. The Department should periodically review provider files to determine if all required documentation is maintained in the files.Views of responsible officials:The Department of Human Services? Division of Medical Assistance and Health Services (DMAHS) has unsuccessfully attempted to gain access to data files that would provide current licensure data to our contracted vendor from the State?s licensing agencies. Continuing efforts to outreach providers by sending a license expiration letter to providers 45 days prior to the license expiration date have also been less than successful. Access concerns have discouraged the State?s efforts to deny claims because of expired licenses. It is important to note that the State?s expectations are that providers are properly licensed, but have failed to communicate this information to our contracted vendor. Licensure information for all enrolling providers and those subject to revalidation are also screened in accordance with ACA requirements.DMAHS efforts to achieve compliance with regard to provider licensing in coordination with the State?s contracted vendor remains ongoing and the importance of having license information on file for the providers being enrolled will again be reiterated and reinforced through communications with the contracted vendor and their staff. The vendor has also been approved to continue taking screenshots of providers? licensing information from licensing websites in lieu of the provider sending in paper copies. These ongoing efforts and actions will help to ensure that licensing information is captured and maintained for each provider and the State?s compliance with documenting provider licensing continues to improve and move towards full compliance in future periods.
Reference Number:2022-024Prior Year Finding:NoFederal Agency:Social Security AdministrationState Agency:Department of Labor and Workforce DevelopmentFederal Program:Disability Insurance/SSI ClusterAssistance Listing Number:96.001Award Number and Year:04-2204NJD100 (10/1/2021 ? 3/30/2023), 04-2104NJD100 (10/1/2020 ? 3/30/2022), 04-2004NJD100 (10/1/2019 ? 3/30/2021)Compliance Requirement:Period of PerformanceType of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance ? A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods.Control ? Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The Department of Labor and Workforce Development (Department) charged costs to the program that were incurred outside of the grant award?s period of performance.Context:Two of six expenditure transactions selected for testing, totaling $435, were incurred prior to the award start date of October 1, 2021.Questioned costs:$435, the total of expenditures charged to the program that were incurred outside of the grant?s period of performance.Cause:Accounting staff identified and charged program costs to the incorrect grant. The Program?s review process did not detect the errors nor take timely corrective action.Effect:The Department was not compliant with the grant?s period of performance which could result in the grantor?s disallowance of the costs.Recommendation:We recommend that the Department review its procedures to ensure that expenditures charged to the program are incurred within the grant?s period of performance.Views of responsible officials:The New Jersey Department of Labor and Workforce Development (DLWD) has a policy in place for processing tuition reimbursements that are performed by the Department?s Accounts Payable unit. The policy was reviewed by the Office of Finance & Accounting (F&A) and internal control procedures were enhanced to ensure that fiscal cutoff measures were appropriately addressed. Tuition reimbursement procedures include having the requests forwarded to the responsible Supervising Analyst in the Appropriations/Accounting unit for final review and approval to ensure the proper fiscal period is charged. The correcting transactions were completed during the Single Audit timeframe to remediate the findings by charging and reimbursing the proper fiscal year accounts. The DLWD will continue its efforts to ensure compliance and that all charges applied to Federal awards are within the specified period of performance going forward.
Assistance Listings number and name: 14.231 COVID-19 - Emergency Solutions Grant ProgramAward numbers and years: E-21-UC-04-0501, August 9, 2021 through August 8, 2023E-20-UW-04-0501 August 27, 2020 through November 22, 2022Federal agency: U.S. Department of Housing and Urban DevelopmentCompliance requirement: Special tests and provisions?Obligation, expenditure and payment requirementsQuestioned costs: Not applicableCondition?Contrary to federal regulation and the County?s award terms, the County?s Human Services Department did not pay subrecipients for program expenditures they incurred and requested reimbursement for within the required 30 days for 42 percent of the requests we tested. Specifically, of the 12 subrecipient reimbursement requests we tested, the Department paid 5 of those requests, totaling $78,992, 10 to 51 days late. This amount comprised 7.8 percent of total program expenditures the County reimbursed to subrecipients for the year and 3.4 percent of total program expenditures the County incurred for the year.Effect?The Department?s failure to pay subrecipients within the required 30 days may place an undue financial burden on those entities, which are primarily nonprofit organizations that are helping the County administer the federal program, placing the services provided by those entities at an increased risk of being interrupted.Cause?The Department reported it needed additional time to obtain complete reimbursement requests from its subrecipients; however, the Department did not document its attempts to obtain complete requests or the dates when the completed requests were obtained. Further, the Department did not have written policies and procedures for paying subrecipients within the required 30-day period.Criteria?Both federal regulation and the County?s award terms require the County to pay subrecipients for allowable costs they incur for the program within 30 days of receiving their completed reimbursement requests (24 Code of Federal Regulation [CFR] ?576.203). In addition, the County must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal programs are being administered in compliance with all applicable laws, regulations, and award terms (2 CFR 200.303).Recommendations?The Department should:1. Develop and implement written policies and procedures to pay subrecipients for program expenditures they incur and request reimbursement for within the required 30 days of receiving their completed reimbursement requests.2. Document its attempts to obtain complete reimbursement requests from subrecipients or the dates when the completed requests were obtained.The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 14.231 COVID-19 - Emergency Solutions Grant ProgramAward numbers and years: E-21-UC-04-0501, August 9, 2021 through August 8, 2023E-20-UW-04-0501 August 27, 2020 through November 22, 2022Federal agency: U.S. Department of Housing and Urban DevelopmentCompliance requirement: Special tests and provisions?Obligation, expenditure and payment requirementsQuestioned costs: Not applicableCondition?Contrary to federal regulation and the County?s award terms, the County?s Human Services Department did not pay subrecipients for program expenditures they incurred and requested reimbursement for within the required 30 days for 42 percent of the requests we tested. Specifically, of the 12 subrecipient reimbursement requests we tested, the Department paid 5 of those requests, totaling $78,992, 10 to 51 days late. This amount comprised 7.8 percent of total program expenditures the County reimbursed to subrecipients for the year and 3.4 percent of total program expenditures the County incurred for the year.Effect?The Department?s failure to pay subrecipients within the required 30 days may place an undue financial burden on those entities, which are primarily nonprofit organizations that are helping the County administer the federal program, placing the services provided by those entities at an increased risk of being interrupted.Cause?The Department reported it needed additional time to obtain complete reimbursement requests from its subrecipients; however, the Department did not document its attempts to obtain complete requests or the dates when the completed requests were obtained. Further, the Department did not have written policies and procedures for paying subrecipients within the required 30-day period.Criteria?Both federal regulation and the County?s award terms require the County to pay subrecipients for allowable costs they incur for the program within 30 days of receiving their completed reimbursement requests (24 Code of Federal Regulation [CFR] ?576.203). In addition, the County must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal programs are being administered in compliance with all applicable laws, regulations, and award terms (2 CFR 200.303).Recommendations?The Department should:1. Develop and implement written policies and procedures to pay subrecipients for program expenditures they incur and request reimbursement for within the required 30 days of receiving their completed reimbursement requests.2. Document its attempts to obtain complete reimbursement requests from subrecipients or the dates when the completed requests were obtained.The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance ProgramAward numbers and years: C-95-21-017-X-01, January 6, 2021 through September 30, 2022;C 22-22-062-X-00, December 6, 2021 through June 30, 2024; C 49-21-024-X-00, May 10, 2021 through September 30, 2025Federal agency: U.S. TreasuryCompliance requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and EligibilityQuestioned costs: $60,199Condition?During the audit, County management reported to us that it identified 6 suspicious payments totaling $135,125 that it made to potentially fraudulent claimants during fiscal year 2022. We reviewed each of the 6 suspicious payments the County made and determined each involved a rental assistance application listing a landlord who was not the recorded property owner of the residence. Although we did not identify instances in which the landlord was not the residence?s property owner in the sample of 60 applications we tested, the County potentially made improper payments from the $75.8 million it disbursed for emergency rental assistance during the year due to the County?s Human Services Department not verifying the landlord information provided on the application.Effect?Upon making potential improper payments, the County made those monies no longer available to assist others who may have needed emergency rental assistance and would have been eligible to receive it. Three of the 6 potentially improper payments totaling $74,926 were flagged by banks and a reported landlord and returned to the County due to suspicious activity, and County management used those monies to provide emergency rental assistance payments to other claimants. However, the County is at risk of having to repay any unrecovered payments that the federal government determines to be improper.Cause?Although the Department had written policies and procedures for verifying tenants were eligible to participate in other federal and State assistance welfare programs before making payments to them, it lacked guidance to identify fraud indicators for applicant information that may warrant further investigation and where to implement antifraud measures to address the program?s inherent risks. For instance, the Department relied on written attestations from applicants that the landlord information provided was accurate but lacked written procedures to verify information submitted on applications using other County records, such as matching the landlord on the application to the County Assessor?s records of the residence?s property owner. In September 2022, the Department began implementing written procedures to verify landlord information with the County Assessor?s property records.Criteria?Federal law and the County?s grant award terms and policies and procedures all require the Department to make rental assistance payments for eligible household tenants directly to the tenant?s landlord unless documentation is provided indicating that the landlord refuses to participate in the program and accept the payments on the tenant?s behalf.1 In those cases, the Department may make payments directly to the tenant. In addition, the County must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal programs are being administered in compliance with all applicable laws, regulations, and award terms (2 CFR 200.303).Recommendations?The Department should:1. Continue to verify that the landlord information provided in the application is accurate prior to authorizing rental assistance payments, such as by verifying landlord information with the County Assessor?s property record.2. Add written policies and procedures to include guidance to identify fraud indicators for applicant information that may warrant further investigation and where to implement antifraud measures to address the program?s inherent risks.3. Investigate suspicious payments and work with the federal grantor, its legal counsel, and law enforcement, as appropriate, to recover any payments determined to be improper.4. Repay any unrecovered monies to the federal grantor, if required.The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.1 The Consolidated Appropriations Act of 2021 (Public Law 116-260), Title V, Section 501(c)(2)(C)(i)(l) and the American Rescue Plan Act of 2021 (Public Law 117-2), Title III, Section 3201.
Assistance Listings number and name: 84.374 Teacher and School Leader Incentive GrantsAward number and year: U374A160041-20, October 1, 2020 through September 30, 2022Federal agency: U.S. Department of EducationCompliance requirement: Cash managementQuestioned costs: $925,524Condition?Contrary to federal regulation, the Maricopa County School Superintendent?s Office overdrew $1,370,113 of program monies for its May 2022 reimbursement request for program expenditures it did not incur, or 18 percent of the program?s total expenditures for the year.Effect?The Office risks having to return the $1,370,113 of program monies for expenditures that it had not incurred and was not eligible to receive, along with any interest it earned exceeding $500, to the federal grantor. However, the Office incurred additional program expenditures of $444,589 during the fiscal year for which it did not request reimbursement because it wanted to first resolve the $1,370,113 overdrawn amount. Therefore, the total questioned costs at fiscal year-end were $925,524, which the Office reported notifying the federal grantor of the error and requesting guidance on how to repay the federal monies. The federal program ended on September 30, 2022, and the Office will need to work with the federal grantor to resolve the overpayment during the grant?s close-out.Cause?The Office?s former Assistant Superintendent incorrectly based the May 2022 drawdown on the wrong time period?July 1, 2019 through May 2020 instead of the time period of July 1, 2021 through May 2022, resulting in a requested drawdown of $1,915,288 rather than the needed drawdown of $545,175?due to an apparent oversight. The Office?s policies and procedures did not require the reviewer to perform a reconciliation of the year?s program expenditures to the drawdown request prior to approving the request for submission to the federal grantor, and the assigned reviewer did not detect the error. Had the Office performed a more careful preparation and detailed review of the reimbursement request, it may have been able to detect and correct the error before submitting the reimbursement request to the federal grantor.Criteria?The Office?s federal award terms and federal Uniform Guidance require the Office to use the reimbursement method to administer the program, whereby the Office is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 Code of Federal Regulations [CFR] ?200.305[b][3]). Accordingly, both the Office and County-wide policies and procedures require an independent review and approval of federal program reimbursement requests and reports before submitting them to the grantor. Also, federal regulation requires the County and all its departments administering federal grants to establish and maintain effective internal control over federal awards that provides reasonable assurance that federal programs are being administered in accordance with all applicable laws, regulations, and award terms (2 CFR ?200.303).Recommendations?The Office should develop and implement policies and procedures for preparing and reviewing federal reimbursement requests that require:1. The assigned reimbursement request reviewer to review or reconcile program expenditures recorded on the County?s financial accounting system to the drawdown request before approving the request to be submitted to the federal grantor.2. The Office to continue to work with the federal grantor to repay award amounts exceeding what the Office was eligible to receive, if any such amounts exist during the grant's close-out.The County?s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Reference Number: 2022-001Prior Year Finding: NoFederal Agency: U.S. TreasuryFederal Program: Coronavirus State and Local Recovery Funds (CSLRF)Assistance Listing Number: 21.027Federal IdentificationAward Number and Year:None, March 3, 2021- December 31, 2024Compliance Requirement:Allowable Costs and ActivitiesAward YearJuly 1, 2021-June 30, 2022Type of FindingSignificant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Recipients may use CSLFRF payments for any eligible expenses subject to the restrictions set forth in sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021 (codified as 42 USC 802 and 42 USC 803 respectively).21 U.S.C. ? 812 - U.S. Code - Unannotated Title 21. Food and Drugs ? 812. Schedules of controlled substances. There are established five schedules of controlled substances, to be known as schedules I, II, III, IV, and V. CSA identifies cannabis as schedule 1, despite studies finding it to have medical uses.(1) Schedule I:(A) The drug or other substance has a high potential for abuse.(B) The drug or other substance has no currently accepted medical use in treatment in the United States.(C) There is a lack of accepted safety for use of the drug or other substance under medicalsupervision.Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The City used CSLRF funds to support the marketing and production of a Cannabis Summit which supported the use of cannabis. Although the use of cannabis is legal in the Commonwealth of Virginia and the summit was approved by the Commonwealth, cannabis is a schedule I controlled substance under the federal Controlled Substance Act (CSA).Federal funds are not allowed to support activities that are illegal federal activity.Context:CLA noted two of five disbursements selected for testing were used to support the Cannabis Summit. CLA reviewed all CSLRF disbursements and noted that only two were made to support the Cannabis Summit.Questioned costs:$130,000, relates to the total CSLRF used to support the Cannabis Summit.Cause:City obtained approval from the State to use the funds in support of the Cannabis Summit.Effect:Federal funds were used to support an illegal federal activity.Recommendation:We recommend that the City ensure that federal funds are used to support allowable costs and activities, and to determine when federal requirements may be more restrictive than the State or grantor? requirements.Views of responsible officials:The City agrees with the finding, see corrective action plan.
Reference Number: 2022-002Prior Year Finding: NAFederal Agency: U.S. TreasuryFederal Program: Coronavirus State and Local Recovery Funds (CSLRF)Assistance Listing Number: 21.027Federal IdentificationAward Number and Year:None, March 3, 2021- December 31, 2024Compliance Requirement:Allowable ActivitiesAward YearJuly 1, 2021-June 30, 2022Type of FindingSignificant Deficiency in Internal Control Over ComplianceCriteria or specific requirement:Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and theterms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:The City purchased 4,429 $100 gift cards for the Senior and ALICE programs. The gift card distribution records did contain all the required eligibility information but was not reconciled to the total gift card population as of June 30, 2022. The distribution record was completed and reconciled as of March 1, 2023; however, this was not timely for the fiscal year 2022 federal program audit.Context:None, the finding relates to the maintenance of records.Questioned costs:None noted.Cause:The City?s initial response was to provide immediate financial assistance to the City?s residents. As a result, the time to establish adequate internal controls that prevent and/or detect errors and irregularities was decreased.Effect:The City may be unable to support the allowability of activity supported by the gift cards.Recommendation:We recommend that the City review and evaluate procedures to ensure that the procedures over safeguarding assets, maintenance of records, and reconciliation of activity are consistently performed.Views of responsible officials:The City agrees with the finding, see corrective action plan.
Criteria: For programs under ESSER I and GEER I, an LEA that receives funds under one or both programs must provide equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) to students and teachers in private schools as determined in consultation with private school officials (section 18005(a) of the CARES Act. To meet this requirement, an LEA must determine the proportional share of funds available for equitable services. Condition: The District did not offer funds from ESSER I and GEER I to private schools in the same manner as provided under Title I. Questioned Cost: Unknown Context: This finding is limited to ESSER I and GEER I. ESSER II, III and GEER II funding to the LEA does not have this requirement as private schools are directly funded. Effect: The District did not offer funding from ESSER I and GEER I to private schools. Recommendation: Consistent with sections 8501 and 8503 of ESEA, a private school may file a complaint directly with the California Department of Education (CDE). Views of Responsible Officials: The District plans to ensure that all employees funded by federal programs either fully funded or partially funded, complete the Personnel Activity Report form as required by law (Title 2, CFR 200.303). The district will monitor and review with all sites and departments for the completion of the PARs form on an ongoing basis. In addition, the district will provide training for current and new employees to acquire the knowledge necessary and required in the completion of the PARs document.
Criteria: For programs under ESSER I and GEER I, an LEA that receives funds under one or both programs must provide equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) to students and teachers in private schools as determined in consultation with private school officials (section 18005(a) of the CARES Act. To meet this requirement, an LEA must determine the proportional share of funds available for equitable services. Condition: The District did not offer funds from ESSER I and GEER I to private schools in the same manner as provided under Title I. Questioned Cost: Unknown Context: This finding is limited to ESSER I and GEER I. ESSER II, III and GEER II funding to the LEA does not have this requirement as private schools are directly funded. Effect: The District did not offer funding from ESSER I and GEER I to private schools. Recommendation: Consistent with sections 8501 and 8503 of ESEA, a private school may file a complaint directly with the California Department of Education (CDE). Views of Responsible Officials: The District plans to ensure that all employees funded by federal programs either fully funded or partially funded, complete the Personnel Activity Report form as required by law (Title 2, CFR 200.303). The district will monitor and review with all sites and departments for the completion of the PARs form on an ongoing basis. In addition, the district will provide training for current and new employees to acquire the knowledge necessary and required in the completion of the PARs document.
Criteria: For programs under ESSER I and GEER I, an LEA that receives funds under one or both programs must provide equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) to students and teachers in private schools as determined in consultation with private school officials (section 18005(a) of the CARES Act. To meet this requirement, an LEA must determine the proportional share of funds available for equitable services. Condition: The District did not offer funds from ESSER I and GEER I to private schools in the same manner as provided under Title I. Questioned Cost: Unknown Context: This finding is limited to ESSER I and GEER I. ESSER II, III and GEER II funding to the LEA does not have this requirement as private schools are directly funded. Effect: The District did not offer funding from ESSER I and GEER I to private schools. Recommendation: Consistent with sections 8501 and 8503 of ESEA, a private school may file a complaint directly with the California Department of Education (CDE). Views of Responsible Officials: The District plans to ensure that all employees funded by federal programs either fully funded or partially funded, complete the Personnel Activity Report form as required by law (Title 2, CFR 200.303). The district will monitor and review with all sites and departments for the completion of the PARs form on an ongoing basis. In addition, the district will provide training for current and new employees to acquire the knowledge necessary and required in the completion of the PARs document.
Criteria: For programs under ESSER I and GEER I, an LEA that receives funds under one or both programs must provide equitable services in the same manner as provided under section 1117 of Title I, Part A of the ESEA (20 USC 6320) to students and teachers in private schools as determined in consultation with private school officials (section 18005(a) of the CARES Act. To meet this requirement, an LEA must determine the proportional share of funds available for equitable services. Condition: The District did not offer funds from ESSER I and GEER I to private schools in the same manner as provided under Title I. Questioned Cost: Unknown Context: This finding is limited to ESSER I and GEER I. ESSER II, III and GEER II funding to the LEA does not have this requirement as private schools are directly funded. Effect: The District did not offer funding from ESSER I and GEER I to private schools. Recommendation: Consistent with sections 8501 and 8503 of ESEA, a private school may file a complaint directly with the California Department of Education (CDE). Views of Responsible Officials: The District plans to ensure that all employees funded by federal programs either fully funded or partially funded, complete the Personnel Activity Report form as required by law (Title 2, CFR 200.303). The district will monitor and review with all sites and departments for the completion of the PARs form on an ongoing basis. In addition, the district will provide training for current and new employees to acquire the knowledge necessary and required in the completion of the PARs document.
Lack of Internal Controls and Noncompliance with Subrecipient Monitoring Requirement –Coronavirus Relief Fund (Repeat Finding - 2021-001) FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING: 21.019 FEDERAL PROGRAM NAME: Coronavirus Relief Fund FEDERAL AWARD NUMBER: SLT0259 FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $176,562 Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Oklahoma County has not established the following procedures to ensure compliance with the Subrecipient Monitoring requirements: • Identify the award and applicable requirements to the subrecipients. • Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Further, when performing tests over compliance of the federal grant, it was noted that the County did not perform any subrecipient monitoring procedures. In addition, subaward agreements were not designed to ensure the subrecipients understand and use the funds in accordance with federal regulations, and terms and conditions of the subaward. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County complies with federal laws and regulations and grant agreements. Effect of Condition: This condition resulted in noncompliance with federal laws and regulations and grant agreements. Recommendation: OSAI recommends the County comply with federal laws and regulations and grant agreements by creating award agreements that are designed and implemented to ensure Subrecipient Monitoring is performed. Management Response: Chairman of the Board of County Commissioners: Oklahoma County will comply with federal laws and regulations and grant agreements by creating award agreements that are designed and implemented to ensure Subrecipient Monitoring is performed. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.332 states: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward… (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section,… (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals areachieved. ... (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals. (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations.
Lack of Internal Controls and Noncompliance with Subrecipient Monitoring Requirement – Emergency Rental Assistance Program (Repeat Finding – 2021-002) FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance Program FEDERAL AWARD NUMBER: ERAE0514, ERAE0418 FEDERAL AWARD YEAR: 2022 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: $13,241,928 Condition: During the process of documenting the County’s internal controls regarding federal disbursements, we noted that Oklahoma County has not established the following procedures to ensure compliance with the Subrecipient Monitoring requirements: • Identify the award and applicable requirements to the subrecipients. • Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). • Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Further, when performing tests over compliance of the federal grant, it was noted that the County did not perform any subrecipient monitoring procedures. In addition, subaward agreements were not designed to ensure the subrecipients understand and use the funds in accordance with federal regulations, and terms and conditions of the subaward. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County complies with federal laws and regulations and grant agreements. Effect of Condition: This condition resulted in noncompliance with federal laws and regulations and grant agreements. Recommendation: OSAI recommends the County comply with federal laws and regulations and grant agreements by creating award agreements that are designed and implemented to ensure Subrecipient Monitoring is performed. Management Response: Chairman of the Board of County Commissioners: Oklahoma County will comply with federal laws and regulations and grant agreements by creating award agreements that are designed and implemented to ensure Subrecipient Monitoring is performed. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR § 200.332 states: All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward… (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, . . . (c) Consider imposing specific subaward conditions upon a subrecipient if appropriate as described in § 200.208. (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. … (e) Depending upon the pass-through entity's assessment of risk posed by the subrecipient (as described in paragraph (b) of this section), the following monitoring tools may be useful for the pass-through entity to ensure proper accountability and compliance with program requirements and achievement of performance goals (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in § 200.501. (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations.
Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Various instances were identified through testing of direct expenditures and payroll transactions where controls in place were not consistently applied or were not documented, designed, or implemented properly to ensure compliance with requirements of each major program. A proper review of requests, expenditures, and timesheets includes a review that assures that the summarized information is supported by the underlying documentation, such as appropriate account coding, funding source, and/or pay rates. It was noted that upon occasion, these reviews were performed, but not adequately, resulting in the following: 1. One instance was noted where an employee was funded under Title 1A, but received retroactive pay of $988, which was funded by Indian School Equalization Program funds. 2. Four instances were noted where individuals qualified for overtime wages, as in total they worked more than 80 hours during the pay period, but were paid at a rate less than 150% of their regular payrate for hours exceeding 80, representing a net underpayment of $180. 3. One instance was noted where an individual was awarded an extracurricular stipend to coach, payable in two installments of 50% of the total contract, but was paid $200 less than 50% in the instance that was selected for testing. 4. Two instances were noted where an employee did not work the full 80 hours in the pay period and did not have enough leave accumulated to be paid for the full period. In these instances the payroll clerk applies the hour shortage as a contra to offset gross pay for the period. In these two instances, the pay rate was not updated to reflect the proper period or change in pay rate elected by the employee, resulting in a net underpayment of $69 in wages. 5. Four instances were identified out of 60 direct expenditures where the request for funds was for approved for amounts lower than the value of the goods purchased. These items were not investigated further by the school. 6. One instance was identified out of 60 expenditures, where an amount was issued for student stipends to a chaperone, to distribute to students to attend an athletic event that did not conform with the policies for documentation standards of the School. Thus, the total amount of this instance resulted in $10,032 in questioned costs. Cause: Various instances were identified through testing of direct expenditures and payroll transactions where controls in place were not consistently applied (primarily manual controls) or were not documented, designed, or implemented properly to ensure compliance with requirements of each major program. Effect: Without a properly designed system of internal controls, including review and approval of all disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other compliance requirements. Questioned Costs: $10,032 Context: A non‐statistical sample of 60 direct expenditures were tested resulting in 1 out of 60 lacking sufficient documentation that ISEP funds were spent in accordance with the policy. There were no similar instances identified through testing of remaining activity stipends. 229 payroll transactions were selected for testing. Repeat Finding from Prior Year: No. Recommendation: We recommend that management retain documentation to support the review process was performed. Views of Responsible Officials: Management is in agreement.
Finding: 2022‐003 84.425 – Education Stabilization Fund Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Various instances were identified through testing of direct expenditures and payroll transactions where controls in place were not consistently applied or were not documented, designed, or implemented properly to ensure compliance with requirements of each major program. A proper review of requests, expenditures, and timesheets includes a review that assures that the summarized information is supported by the underlying documentation, such as appropriate account coding, funding source, and/or pay rates. 1. The School utilized COVID‐19 funding to incentivize retention of staff for the Fall and Spring Semesters. Additionally, the School paid 25% of the employees’ wages for actual hours worked as Hazard Pay, to encourage participation and fulfill student needs during the Pandemic. In 49 out of 358 transactions tested that were funded using COVID‐19 funds, Hazard Pay was incorrectly or inconsistently computed due to inconsistent application of policy, resulting in a net underpayment of wages of $504. Cause: Various instances were identified through testing of payroll transactions where controls in place were not consistently applied (primarily manual controls) or were not documented, designed, or implemented properly to ensure compliance with requirements of each major program. Effect: Without a properly designed system of internal controls, including review and approval of all disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other compliance requirements. Questioned Costs: None reported. Context: A non‐statistical sample of 358 payroll transactions were selected. There were 49 instances identified where the Hazard Pay was inconsistently computed for non‐regular pay codes 21 of those were overpaid Hazard pay totaling $1,448, and 28 instances totaling $1,952 were underpaid out of a total sample of $162,733. Repeat Finding from Prior Year: No. Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
FINDING 2022-004 Information on the federal program: Subject: Aging Cluster – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Information on the federal program: Subject: Aging Cluster – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Information on the federal program: Subject: Aging Cluster – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-004 Information on the federal program: Subject: Aging Cluster – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for four claims in a sample of four, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-005 Information on the federal program: Subject: SSBG – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Social Services Block Grant Assistance Listing Number: 93.667 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for three claims in a sample of three, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-006 Information on the federal program: Subject: Title III-E – Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Title III-E Family Caregiver, COVID-19 – Title III-E Family Caregiver Assistance Listing Number: 93.052 Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted that for two claims in a sample of two, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review. Identification as a repeat finding, if applicable: Yes. The same comment appeared in the prior year report as Finding 2021-005. Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2022-001 – Earmarking, Reporting (Performance Progress Reporting) Material Weakness in Internal Controls Over Compliance and Instance of Noncompliance (Scope Limitation) Assistance Listing Number: 16.589 Federal Agency/Pass-through Entity - Program Name: Department of Justice - Rural Domestic Violence, Dating Violence, Sexual Assault, Stalking Assistance Program Award Number: 2020-WR-AX-0041 Award Year(s): 2020-2023 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Grant Agreement Requirements - Earmarking Section 50 of the grant agreement requires that no more than 30% of project activities and grant funds will be dedicated to awareness and prevention activities. Grant Agreement Requirements – Performance Progress Reporting Section 35 of the grant agreement requires submission of semi-annual performance progress reports that describe activities conducted during the reporting period, including program effectiveness measures. Condition: The Coalition does not have controls in place to track actual expenditures related to the earmarking requirements in Section 50 of the grant award. The Coalition does have controls related to the review and approval of performance progress reports; however, it was noted that this control was not operating effectively to ensure proper document retention to support earmarking amounts reported. Questioned Costs: Questioned costs are not determinable. Context: We tested one semi-annual performance progress report required by Section 35 of the grant agreement. We noted that the Coalition reported 10% of grant expenditures for awareness and prevention activities, related to the earmarking requirement of Section 50. The Coalition could not provide supporting documentation for the percentage reported. While the percentage reported by the Coalition did not exceed the 30% earmarking threshold, we were unable to obtain sufficient appropriate evidence to support compliance with program earmarking. Cause: The Coalition did not maintain the supporting documentation for the percentage earmarking reported on semi-annual performance progress report due to change in personnel. Effect or potential effect: Without proper record retention, the Coalition is unable to support the amounts reported for earmarking percentages on their semi-annual performance progress report, causing potential noncompliance. Repeat Finding: Yes, 2021-002 Recommendation: We recommend that the Coalition develop policies and procedures for tracking actual expenditures related to earmarking requirements and maintain all supporting documentation for the calculation of the earmarking percentages that are reported in the semi-annual performance progress reports. Views of responsible officials: The Coalition's staff has developed policies and procedures for tracking actual expenditures related to these requirements, and maintaining all supporting documentation for the calculation of the earmarking percentages that are reported in the semi-annual progress reports. The Coalition has developed an internal control process for reviewing and approving calculations required by Section 50 of the grant agreement and has strengthened its reporting management review controls to ensure that the review is effective to ensure the completeness and accuracy of reports, and that all elements are appropriately supported, prior to submission the federal agency.
Department of Health and Human Services Temporary Assistance for Needy Families (TANF), Federal Assistance Listing # 93.558 Pass Through Virginia Department of Social Services, Pass Through Entity Identifying Number BEN-21-054 Type of Finding: Significant Deficiency in Internal Control over Compliance with Federal Awards Criteria: The Organization should have effective internal controls in place over review of intake forms, per 2 CFR 200.303 and 2 CFR 200.334. Condition: During our audit, it was noted that there was not an effective review of intake forms. Context: During testing, 6 of 60 intake forms tested to not contain appropriate signatures by individuals or management noting approval. The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: N/A Cause/Effect: Internal control processes over intake forms were not operating effectively from July 2021 through June 2022. Identification of Repeat Finding: N/A Recommendation: We recommend that Cornerstones implements a review process to ensure that intake forms are complete and accurate as possess all appropriate signatures. Views of Responsible Officials and Correction Action: Management’s response is reported in “Management’s Views and Corrective Action Plan” included at the end of this report.