Reporting – FFATA Federal Agency: U.S. Department of Agriculture U.S. Department of Housing and Urban Development Federal Program Title: Child Nutrition Cluster (CNC) Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (CDBG) ALN: 10.553, 10.555, 10.556, 10.559, 10.582 14.228 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: CNC 236TX332N1099, 236TX332N1199, 236TX375L1603 October 1, 2022 – September 30, 2023 CDBG B-21-DC-48-0001, B-22-DC-48-0001 September 1, 2021 – September 1, 2028, September 1, 2021 – September 1, 2028, September 1, 2022 – September 1, 2029 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 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_x0002_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). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., 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) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: Texas Department of Agriculture (TDA) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). During our testing, we noted the following compliance exceptions: Child Nutrition Cluster- Fresh Fruit and Vegetable Program (ALN 10.582) See chart or table in the Schedule of Findings and Questioned Costs. Child Nutrition Cluster- National School Lunch Program (ALN 10.555) See chart or table in the Schedule of Findings and Questioned Costs. Community Development Block Grant (ALN 14.228) See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See "Condition." Cause: As related to ALN 10.582 and 10.555, TDA reports expenditures at the end of the subaward period rather than reporting subawards over $30,000 by the last day of the month following the month in which the subaward/ subaward amendment obligation was made or the subcontract award/subcontract modification was made. This was due to the nature of the subaward agreements, where subaward amounts are not specified in the agreement and subrecipients are reimbursed based on actual expenditures incurred each month. As related to subawards not reported for ALN 10.555, TDA did not attempt to report subawards during the fiscal year due to significant technical difficulties encountered uploading subaward data into the FSRS in previous periods. As related to 14.228, reports were submitted late due to management oversight. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat Finding: No Recommendation: TDA should revise its current policies and procedures to ensure all subaward/ subaward amendment obligations over $30,000 are identified and submitted in FSRS by the last day of the month following the month in which the subaward/ subaward amendment obligation was made or the subcontract award/subcontract modification was made. Additionally, TDA should attempt to submit subaward information as required. If unsuccessful due to technical matters related to FSRS, TDA should retain documentation of the resolution efforts and submit subaward information immediately after the matter has been resolved. Views of responsible officials: CNC – TDA FND agrees with the CLA’s recommendation. CDBG – TDA agrees with the finding. TDA acknowledges the FFATA reports were not submitted timely.
Subrecipient Monitoring Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0266 – 2021, 1505-0270 – 2021. January 6, 2022 – December 29, 2022 and May 5, 2021 – September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 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_x0002_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). Per 2 CFR sections 200.332 (d) through (f), all pass-through entities must 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. Condition: TDHCA maintains a Master Planning Summary (MPS) to track all active subrecipient contracts that have expenditures in the planning phase, which are to be considered for sampling and potential selection for review. During our testing, we noted one subrecipient contract with expenditures during the fiscal year that was not included in the MPS for potential selection for a review. Questioned costs: None. Context: See “Condition.” Cause: Management is not adhering to the subrecipient monitoring procedures to ensure all active subrecipient contracts with expenditures incurred during the fiscal year are at least considered for review by being included in the MPS. Effect: Failure to complete proper monitoring over subrecipients may lead to noncompliance with grant terms and conditions. Repeat finding: No Recommendation: We recommend that TDHCA strengthen its internal controls to ensure that all subrecipients are included in the MPS and subject to review. Views of responsible officials: The Department’s Compliance Subrecipient Monitoring (CMSM) staff acknowledges that a subrecipient was erroneously not included in the Master Planning Summary. However, the Department’s procedures for risk assessment and monitoring activities for this review period remain compliant with 2 CFR section 200.303(a) as well as 2 CFR section 200.331(6)(b). Risk assessment for non-formula funded contracts is 100% risk based. Both risk assessment and subsequent monitoring functions represent a snapshot of the Department’s pass-through activities and 100% review is not required. It is the Department’s stance that this error does not materially impact the risk assessment process or the scope of this audit.
Special Tests and Provisions – ERA Funds Reallocation Federal Agency: U.S. Department of the Treasury Federal Program Title: Emergency Rental Assistance Program ALN: 21.023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0270 – 2021 May 5, 2021 – September 30, 2025 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR §200.302, the 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. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. Per 2 CFR §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). Per Treasury’s ERA2 Reallocation Guidance Updated November 15, 2022, the ERA2 statute requires Treasury to identify funds for reallocation from amounts allocated to eligible Grantees, but not yet paid out to them. Specifically, the statute provides that beginning on March 31, 2022, Treasury must “reallocate funds allocated to eligible grantees … but not yet paid,” according to a procedure established by Treasury. Condition: Audit procedures included a review of the ERA2 Quarter 3 2022 (July-September) and ERA2 Quarter 4 2022 (October-December) Compliance Reports. We noted that $6,777,186 was double counted on the ‘Cumulative Amount of Award Obligated as of the end of the Reporting Period’ amount in the ERA2 Quarter 4 2022 Compliance Report. Questioned costs: None. Context: See "Condition" Cause: Obligated amounts were duplicated when preparing the supporting worksheets due to management oversight. Effect: Inaccurate supporting data when calculating reallocation expenditure ratios may result in an incorrect amount of excess funds subject to recapture by Treasury. Repeat finding: 2022-025 Recommendation: We recommend management enhance its internal controls over the review of supporting reallocation expenditure ratio calculations. Views of responsible officials: Management agrees with the finding and recommendation
Eligibility Federal Agency: U.S. Department of the Treasury Federal Program Title: Homeowner Assistance Fund Program ALN: 21.026 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0269 – 2021 May 3, 2021 – September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR §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: During our testing of 60 individual payments to program participants, we noted the following exceptions for one sampled payment: The servicer failed to provide an original loan amount. While the deed of trust was used to confirm conforming loan limits, it was not retained. The deed of trust was subsequently provided, however, we were unable to verify that the applicant provided a deed of trust prior to approval. The applicant was enrolled in the Mortgage Reinstatement Program, which states that the debt to-income ratio must be between 31.01% and 55.0% and the applicant states they can afford to make the mortgage payments. We noted that the while the applicant had a 32.01% debt-to-income ratio, they stated they cannot afford to continue mortgage payments. As such, the applicant should have been enrolled in the Reinstatement plus Monthly payment assistance (R+U) program, which provides full monthly payment assistance to homeowners who are past due on their mortgage and unable to make full mortgage payments due to a continuing financial hardship associated with the Coronavirus pandemic. Questioned costs: None. Context: See "Condition" Cause: Management did not retain documentation to support eligibility determinations in the case file. With respect to program placement, the applicant was enrolled in the incorrect program due to changes in program types concurrently taking place. Effect: Ineffective controls over loan eligibility could result in payments on ineligible loans. Additionally, incorrectly placing participants in programs may result in ineligible payments or erroneously denying payments. Repeat finding: No Recommendation: We recommend enhancing current policies and procedures to ensure that the case auditors and supervisors are: (1) not approving applications with incomplete documentation and (2) properly placing participants in the correct program. Views of responsible officials: Management concurs with the control deficiency.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Homeowner Assistance Fund Program ALN: 21.026 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 1505-0269 – 2021 May 3, 2021 – September 30, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR §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). Per the Department of Treasury’s Homeowner Assistance Fund (HAF) guidance on participant compliance and reporting responsibilities, HAF participants are required to submit quarterly reports (PRA 1505-0269) that include data regarding programs, expenditures, demographic distribution, civil rights compliance, equity indicators, community engagement efforts, and programmatic data. To provide public transparency on whether programs are using practices that promote on-time and on-budget delivery, Treasury will seek information from HAF participants on their workforce plans and practices related to HAF programs. The reports contain key line items with critical information as follows: 1. Administrative Expenses - Quantifiable Objective Criteria: Obligations and expenditures do not exceed 15% for admin expenses. 2. Services, Counseling & Education - Quantifiable Objective Criteria: Obligations and expenditures do not exceed 5% for legal services, counseling, and education. Condition: Audit procedures included a review of the key line items within the quarterly reports for the periods ending December 31, 2022 and March 31, 2023. While TDHCA did not exceed the percentage maximums for each key line item, we noted the following variances for Administrative Obligations and Expenses: December 31, 2022 Report Obligations – Total cumulative obligations reported was $121,740,816, however the amount per supporting documentation provided was $95,675,808, resulting in a variance of $26,065,008. Expenditures – Total cumulative expenditures reported was $32,309,867, however, the amount per supporting documentation was $31,498,881 resulting in a variance of $810,986. Specific to contracts with CDCs, Housing Counselors, Affordable Housing Providers for Intake Centers and Outreach, review of the expenditure detail indicated that the $1,781,278 of cumulative expenditures reported included other costs not related to this category. March 31, 2023 Report Obligations – Total cumulative obligations reported was $104,384,814, however, the amount per supporting documentation was $96,426,918, resulting in a variance of $7,957,896. Expenditures – Total cumulative expenditures reported was $41,113,838, however, the amount per supporting documentation was $45,208,650, resulting in a variance of ($4,094,812). Specific to contracts with expenditures for CDCs, Housing Counselors, Affordable Housing Providers for Intake Centers and Outreach, review of the expenditure detail indicated that the $0 of cumulative expenditures reported is incorrect. We noted cumulative expenditures for 100% intake of $2,324,512. These are at minimum expenditures as there are subrecipient contracts allocated between intake, counseling, and legal. which TDHCA did incur expenditures in Q1 2023 and previous quarters. Management was unable to provide an analysis of these expenditures to allocate the respective portion to intake. Questioned costs: None. Context: See "Condition" Cause: TDHCA reported budgeted amounts rather than obligated amounts as defined by the U.S. Treasury Homeowner Assistance Fund Guidance on Participant Compliance and Reporting Responsibilities. Additionally, TDHCA’s controls over the review of reports were not operating at a precision level that would identify reported amounts that do not agree to supporting documentation. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per Treasury and that amounts agree to supporting documentation. Views of responsible officials: Management concurs with the control deficiency.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: HHSC Section 33; HHSC Section 12: Rural Hospitals, HHSC Section 22: Sunrise Canyon Hospital November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.334, financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. Federal awarding agencies and pass-through entities must not impose any other record retention requirements upon non-Federal entities. In the 2021 Texas Senate Bill 8, HHSC was appropriated money in various sections of the bill received by Texas from the Coronavirus State Fiscal Recovery Fund for the following purposes related to costs incurred during the period beginning October 8, 2021, and ending November 8, 2023, due to the coronavirus pandemic: Section 11(a) – funding for the construction of a state hospital in Dallas, Texas. Section 12 – funding for grants to support rural hospitals that have been affected by the COVID-19 pandemic. Section 13 – funding for the creation of a consolidated internet portal for Medicaid and the Children’s Health Insurance Program medical services provider data. Section 14 – funding for technology updates to the Medicaid eligibility computer system. Section 15 – funding for COVID-19 related expenses incurred by the Texas Civil Commitment Office related to consumable supplies and travel. Section 22 – funding for the expansion of capacity of Sunrise Canyon Hospital. Section 33 – funding to administer one-time grants related to providing critical staffing needs resulting from frontline healthcare workers affected by COVID-19, including recruitment and retention bonuses for staff. Condition: Audit procedures included a selection of 60 sampled expenditures totaling $143,092,786 incurred during the fiscal year to test allowability with the grant awards. We noted that for 48 out of the 60 samples totaling $9,600,062, the agency did not obtain supporting documentation from the vendor to verify that the amounts advanced to the vendor were expended on allowable costs. We were unable to substantiate the amounts expended by the vendor and allowability of those expenditures in accordance with the relevant Senate Bill 8 section and the Department of the Treasury Final Rule. Questioned costs: $9,600,062. Context: See “Condition.” Cause: HHSC is not fully monitoring the use of program funds through collection, review, and maintenance of invoices supporting the expenditures. Effect: Failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat finding: No Recommendation: HHSC should implement policies and procedures to ensure documentation is maintained for a period of at least three years from the date of submission of the final expenditure report for the grant in accordance with 2 CFR 200.334. Views of responsible officials: HHSC concurs with the finding.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Change Management Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: System changes that were applied to the production Texas Travel Industry Recovery Grant Program (TTIR) environment were not documented in accordance with appropriate change management procedures. We were unable to verify that changes were requested, approved, and segregation of duties existed within the process for five of the five samples selected for testing. Questioned costs: None. Context: See “Condition.” Cause: OOG currently utilizes emails and Microsoft Teams messages to transmit information during the change management process request and approval process. However, documentation from these methods was not retained. Effect: Failure to formally document system changes could result in undocumented or unauthorized changes to the application. Repeat finding: No Recommendation: We recommend formally documenting and retaining the request and approval of all changes related to the TTIR application. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the documented evidence of Change Management execution is insufficient. While the change management procedure is in practice cohesive and in continued use, the documentation of such and evidence of the repeatability thereof, is insufficient for the Texas Travel Industry Recovery Grant Program (TTIR) Portal.
Activities Allowed and Unallowed, Allowable Costs/Cost Principles, Earmarking, Procurement, Suspension and Debarment, Reporting – Information Technology – Logical Access Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year. Questioned costs: None. Context: See “Condition.” Cause: Management’s timeline to complete the user access review was delayed. Effect: Failure to perform user access reviews in a timely manner could result in undetected inappropriate access or inappropriate changes to the application. Repeat finding: No Recommendation: We recommend that OOG enforce current policies and procedures in relation to eGrants to complete timely user access reviews and document the results. The user access review should include a review of all privileged accounts on a periodic basis to verify that all active accounts are supported by a business purpose. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the OOG did not perform a documented periodic access review of users for the eGrants application, which would include a review of privileged users’ access during the fiscal year.
Reporting Federal Agency: U.S. Department of the Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: SLT – 8809: Project Name: CACT Section 3: Children’s Advocacy; OOG TTIR Section 2; OOG Section 24: Trusted Programs within the Office of the Governor November 8, 2021 – December 31, 2026 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and NoncomplianceCriteria or specific requirement: Per 2 CFR section 200.303(a), the 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). Per the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Compliance and Reporting Guidance Version 5.0, for purposes of reporting in the SLFRF portal, an obligation is an order placed for property and services, contracts and subawards made, and similar transactions that require payment. Condition: OOG is the prime recipient of SLFRF funds for the State of Texas. Per Senate Bill 8, funds are passed through to other state agencies to expend on programs established by the Senate Bill. On a quarterly basis, OOG receives ‘Agency Reconcilers’ from each state agency with reported amounts for each of their respective programs per Senate Bill 8 in order to prepare the state-wide Project and Expenditure Report. Audit procedures included testing of the December 31, 2022 and March 31, 2023 Project and Expenditure Reports, which combined Agency Reconcilers for 33 programs and 41 programs, respectively. We compared the amounts reported on the Project and Expenditure Reports as submitted to Treasury to the amounts noted on the ‘Agency Reconcilers’ submitted by the pass-through state agencies noting the following variances by key line item: December 31, 2022 Project and Expenditure Report OOG was unable to provide the Agency Reconciler for five programs. As such, we were unable to validate all key line items reported for those agencies. Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for nine programs, resulting in a variance of ($61,450,208). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 12 programs, resulting in a variance of $333,636,497. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for five programs, resulting in a variance of ($85,590,747) Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($74,511). March 31, 2023 Project and Expenditure Report Current period obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 15 programs, resulting in a variance of ($115,194,311). Cumulative obligations – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for 22 programs, resulting in a variance of $572,738,964. Current period expenditures – Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for eight programs, resulting in a variance of ($20,661,270). Cumulative expenditures - Amounts reported in the Project and Expenditure Report did not agree to the Agency Reconcilers for one program, resulting in a variance of ($32,479). Questioned costs: None. Context: See “Condition.” Cause: Variances related to cumulative obligations were due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances were due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. OOG reported amounts reported in its eGrants system rather than the amounts reported by the state agencies. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported to the federal government. Repeat finding: No Recommendation: We recommend management enhance its internal controls to ensure obligations reported on federal reports meet the definition of an obligation per SLFRF Compliance and Reporting Guidance Version 5.0 and that amounts reported by the state agencies reconcile to the amounts reported in eGrants and the Project and Expenditures Reports. Management should reconcile discrepancies between eGrants and the amounts reported by the state agencies and obtain revised Agency Reconcilers, if appropriate. Views of responsible officials: The Office of the Governor (OOG) management agrees with the finding that the variances related to cumulative obligations are due to OOG reporting budgeted amounts rather than obligated amounts as defined by the SLFRF Compliance and Reporting Guidance Version 5.0. The remaining variances are due to discrepancies between the Agency Reconcilers and amounts reported in OOG’s eGrants system. When variances occurred, it was typically the result of data entry errors within the Agency Reconcilers. In these cases, the OOG deferred to the amounts reported in its eGrants system rather than the amounts reported by the state agencies in the Agency Reconcilers.
Subrecipient Monitoring Federal Agency: U.S. Department of Education Federal Program Title: Adult Education- Basic Grants to States ALN: 84.002 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: V002A200044, V002A210044, V002A220044, V002A230044 July 1, 2020 – September 30, 2021, July 1, 2021 – September 30, 2022, July 1, 2022 – September 30, 2023, July 1, 2023 – September 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 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_x0002_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). Per 2 CFR sections 200.332 (d) through (f), TWC must 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. Condition: Per review of TWC's Subrecipient Monitoring Department's (SRM) Annual Monitoring Plan, the Adult Education and Literacy (AEL) program is designed to meet the education and training needs of adults. SRM will continue to work closely with the Workforce Development Division to identify the fiscal and program areas that present the highest risk to the Agency. SRM will also conduct data validation reviews of all AEL providers, once during each five-year grant period. During our testing, we noted seven AEL subrecipients were excluded from the SRM Plan and no reviews or data validations were performed within the previous five years. Questioned costs: None. Context: See “Condition.” Cause: Management is not adhering to the subrecipient monitoring procedures to ensure all Adult Education and Literacy subrecipients have a data validation review once during each five-year granting period. Effect: Failure to complete proper monitoring over subrecipients may lead to noncompliance with grant terms and conditions. Repeat Finding: No Recommendation: We recommend that TWC strengthen its internal controls to ensure that monitoring over all subrecipients is completed. Views of responsible officials: The Texas Workforce Commission acknowledges and agrees with the finding with one observation. Follow-up review indicates that only 6 of 7 AEL subrecipients tested were not included in the risk assessment. ‘Restore Education’ was, in fact, assessed. It was SRM’s understanding from prior guidance that the types of AEL subrecipients tested as part of this audit were not applicable to SRM’s risk assessment process. We have confirmed with TWC’s AEL program staff that they should have been in scope for SRM’s annual and mid-year risk assessments.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Reporting – Special Reporting Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund ALN: 84.425R Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: S425R210043 February 25, 2021 – September 30, 2022 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 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_x0002_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). Per the Office of Elementary and Secondary Education, all grantees are required to report on ESSER funds received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act; the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act; and the American Rescue Plan (ARP) Act. Grantees must submit an annual report describing how the State and subrecipients used the awarded funds during the performance period. Condition: Audit procedures included a review of 40 subrecipients/ local education agencies (LEAs) whose data was reported on key line item 3.b10 - Number of specific positions supported with ESSER Fund. Of the 40 subrecipients, the number of paraprofessionals, the number of school counselors, school psychologists and/or social workers, and number of classroom educators, not covered by previous categories for one LEA was reported incorrectly in the Annual Report by TEA compared to the information the LEA submitted. Information was transposed with another LEA, causing that LEA’s information to be incorrect as well. Additionally, one LEA submitted corrected information, which was not subsequently corrected by TEA in the Annual Report. Questioned costs: None. Context: See “Condition.” Cause: Current controls are not at the correct precision level to detect variances in data reported in the Annual Report compared to information submitted by LEAs. Effect: Failure to report accurate information may result in noncompliance with terms of the grant award. Repeat finding: No Recommendation: TEA should enhance and/or modify existing controls to ensure information submitted by the LEAs is reported completely and accurately on the Annual Report. Views of responsible officials: TEA agrees an error was made during the upload of the LEA submitted corrected CROSSACT data. The corrective actions below will be implemented to prevent future occurrence.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines and Special Tests and Provisions – Record of Immunization – Information Technology – User Access Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: DSHS utilizes the Child Health Reporting System (CHRS) to track immunizations for childcare, daycares, and colleges. Providers that administer immunizations upload required information into the system for DSHS to meet reporting requirements. During our testing, we noted that the user provisioning process for CHRS does not require formal documentation for requesting and approving system access. Questioned costs: None. Context: See “Condition.” Cause: DSHS does not have established policies and procedures that require a formal request and approval for system access to CHRS. Effect: Failure to complete formal requests and approvals for system access increases the risk of unauthorized users and suspicious activities that may not be identified and investigated. Repeat finding: 2020-027 Recommendation: We recommend that DSHS implement enhanced procedures to ensure that new hire provisioning procedures are approved before access is granted. Views of responsible officials: The remaining portion of this prior year finding addresses only CHRS. CHRS is a system currently used by public and private schools to enter non-confidential, aggregate data eventually posted to the internet as part of the Annual Report of Immunizations Status. Within DSHS, internal CHRS users are from the Infectious Disease Prevention Division and the Vision, Hearing, Spinal Screening (VHSS) program within the Community Health Improvement Division. Access for these users is provisioned as part of the DSHS new hire process. Because CHRS does not contain confidential information, Immunization and VHSS staff want to make the process for schools to enter aggregate data as uncomplicated as possible.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines Special Tests and Provisions – Record of Immunization Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Texas Vaccines for Children (TVFC) staff perform compliance visits to assess, support, and educate the site regarding TVFC policies and procedures. Compliance visits must be directly entered in PEAR while the review is being conducted. At the conclusion of a compliance visit, the DSHS Public Health Region (PHR) or Quality Assurance (QA) contractor reviewer must discuss the visit’s outcomes with the vaccine coordinator. The discussion must include a review of the site visit findings and a formal follow-up plan with a timeline addressing noncompliance issues or opportunities for improvement. Monthly reports are run from PEAR to ensure all provider audits are being conducted within a 24-month timeframe. When pulling the monthly report of issues/deficiencies, TVFC staff also review to see that follow-up activities have been completed on time. During fiscal year 2023, review and verification of follow up activities for site reviews conducted by TVFC staff were not formally documented. Thus, we were unable to verify that the reviews were being conducted. Questioned costs: Unknown. Context: See “Condition.” Cause: Internal controls surrounding the site visits conducted are not formally documented. Effect: Lack of formal documentation of reviews may result in missed follow-up actions and potential noncompliance. Repeat finding: No Recommendation: TVFC staff should formally document the review of site visit results, including any relevant follow-up actions, to retain documentation of compliance. Views of responsible officials: DSHS agrees formal documentation of TVFC site visits and site-visit reviews would improve the process.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines and Special Tests and Provisions – Record of Immunization – Information Technology – User Access Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: DSHS utilizes the Child Health Reporting System (CHRS) to track immunizations for childcare, daycares, and colleges. Providers that administer immunizations upload required information into the system for DSHS to meet reporting requirements. During our testing, we noted that the user provisioning process for CHRS does not require formal documentation for requesting and approving system access. Questioned costs: None. Context: See “Condition.” Cause: DSHS does not have established policies and procedures that require a formal request and approval for system access to CHRS. Effect: Failure to complete formal requests and approvals for system access increases the risk of unauthorized users and suspicious activities that may not be identified and investigated. Repeat finding: 2020-027 Recommendation: We recommend that DSHS implement enhanced procedures to ensure that new hire provisioning procedures are approved before access is granted. Views of responsible officials: The remaining portion of this prior year finding addresses only CHRS. CHRS is a system currently used by public and private schools to enter non-confidential, aggregate data eventually posted to the internet as part of the Annual Report of Immunizations Status. Within DSHS, internal CHRS users are from the Infectious Disease Prevention Division and the Vision, Hearing, Spinal Screening (VHSS) program within the Community Health Improvement Division. Access for these users is provisioned as part of the DSHS new hire process. Because CHRS does not contain confidential information, Immunization and VHSS staff want to make the process for schools to enter aggregate data as uncomplicated as possible.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines Special Tests and Provisions – Record of Immunization Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Texas Vaccines for Children (TVFC) staff perform compliance visits to assess, support, and educate the site regarding TVFC policies and procedures. Compliance visits must be directly entered in PEAR while the review is being conducted. At the conclusion of a compliance visit, the DSHS Public Health Region (PHR) or Quality Assurance (QA) contractor reviewer must discuss the visit’s outcomes with the vaccine coordinator. The discussion must include a review of the site visit findings and a formal follow-up plan with a timeline addressing noncompliance issues or opportunities for improvement. Monthly reports are run from PEAR to ensure all provider audits are being conducted within a 24-month timeframe. When pulling the monthly report of issues/deficiencies, TVFC staff also review to see that follow-up activities have been completed on time. During fiscal year 2023, review and verification of follow up activities for site reviews conducted by TVFC staff were not formally documented. Thus, we were unable to verify that the reviews were being conducted. Questioned costs: Unknown. Context: See “Condition.” Cause: Internal controls surrounding the site visits conducted are not formally documented. Effect: Lack of formal documentation of reviews may result in missed follow-up actions and potential noncompliance. Repeat finding: No Recommendation: TVFC staff should formally document the review of site visit results, including any relevant follow-up actions, to retain documentation of compliance. Views of responsible officials: DSHS agrees formal documentation of TVFC site visits and site-visit reviews would improve the process.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines and Special Tests and Provisions – Record of Immunization – Information Technology – User Access Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: DSHS utilizes the Child Health Reporting System (CHRS) to track immunizations for childcare, daycares, and colleges. Providers that administer immunizations upload required information into the system for DSHS to meet reporting requirements. During our testing, we noted that the user provisioning process for CHRS does not require formal documentation for requesting and approving system access. Questioned costs: None. Context: See “Condition.” Cause: DSHS does not have established policies and procedures that require a formal request and approval for system access to CHRS. Effect: Failure to complete formal requests and approvals for system access increases the risk of unauthorized users and suspicious activities that may not be identified and investigated. Repeat finding: 2020-027 Recommendation: We recommend that DSHS implement enhanced procedures to ensure that new hire provisioning procedures are approved before access is granted. Views of responsible officials: The remaining portion of this prior year finding addresses only CHRS. CHRS is a system currently used by public and private schools to enter non-confidential, aggregate data eventually posted to the internet as part of the Annual Report of Immunizations Status. Within DSHS, internal CHRS users are from the Infectious Disease Prevention Division and the Vision, Hearing, Spinal Screening (VHSS) program within the Community Health Improvement Division. Access for these users is provisioned as part of the DSHS new hire process. Because CHRS does not contain confidential information, Immunization and VHSS staff want to make the process for schools to enter aggregate data as uncomplicated as possible.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines Special Tests and Provisions – Record of Immunization Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Texas Vaccines for Children (TVFC) staff perform compliance visits to assess, support, and educate the site regarding TVFC policies and procedures. Compliance visits must be directly entered in PEAR while the review is being conducted. At the conclusion of a compliance visit, the DSHS Public Health Region (PHR) or Quality Assurance (QA) contractor reviewer must discuss the visit’s outcomes with the vaccine coordinator. The discussion must include a review of the site visit findings and a formal follow-up plan with a timeline addressing noncompliance issues or opportunities for improvement. Monthly reports are run from PEAR to ensure all provider audits are being conducted within a 24-month timeframe. When pulling the monthly report of issues/deficiencies, TVFC staff also review to see that follow-up activities have been completed on time. During fiscal year 2023, review and verification of follow up activities for site reviews conducted by TVFC staff were not formally documented. Thus, we were unable to verify that the reviews were being conducted. Questioned costs: Unknown. Context: See “Condition.” Cause: Internal controls surrounding the site visits conducted are not formally documented. Effect: Lack of formal documentation of reviews may result in missed follow-up actions and potential noncompliance. Repeat finding: No Recommendation: TVFC staff should formally document the review of site visit results, including any relevant follow-up actions, to retain documentation of compliance. Views of responsible officials: DSHS agrees formal documentation of TVFC site visits and site-visit reviews would improve the process.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines and Special Tests and Provisions – Record of Immunization – Information Technology – User Access Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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_x0002_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: DSHS utilizes the Child Health Reporting System (CHRS) to track immunizations for childcare, daycares, and colleges. Providers that administer immunizations upload required information into the system for DSHS to meet reporting requirements. During our testing, we noted that the user provisioning process for CHRS does not require formal documentation for requesting and approving system access. Questioned costs: None. Context: See “Condition.” Cause: DSHS does not have established policies and procedures that require a formal request and approval for system access to CHRS. Effect: Failure to complete formal requests and approvals for system access increases the risk of unauthorized users and suspicious activities that may not be identified and investigated. Repeat finding: 2020-027 Recommendation: We recommend that DSHS implement enhanced procedures to ensure that new hire provisioning procedures are approved before access is granted. Views of responsible officials: The remaining portion of this prior year finding addresses only CHRS. CHRS is a system currently used by public and private schools to enter non-confidential, aggregate data eventually posted to the internet as part of the Annual Report of Immunizations Status. Within DSHS, internal CHRS users are from the Infectious Disease Prevention Division and the Vision, Hearing, Spinal Screening (VHSS) program within the Community Health Improvement Division. Access for these users is provisioned as part of the DSHS new hire process. Because CHRS does not contain confidential information, Immunization and VHSS staff want to make the process for schools to enter aggregate data as uncomplicated as possible.
Special Tests and Provisions – Control, Accountability, and Safeguarding of Vaccines Special Tests and Provisions – Record of Immunization Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Immunization Cooperative Agreements ALN: 93.268 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NH23IP922616 July 1, 2019 – June 30, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Texas Vaccines for Children (TVFC) staff perform compliance visits to assess, support, and educate the site regarding TVFC policies and procedures. Compliance visits must be directly entered in PEAR while the review is being conducted. At the conclusion of a compliance visit, the DSHS Public Health Region (PHR) or Quality Assurance (QA) contractor reviewer must discuss the visit’s outcomes with the vaccine coordinator. The discussion must include a review of the site visit findings and a formal follow-up plan with a timeline addressing noncompliance issues or opportunities for improvement. Monthly reports are run from PEAR to ensure all provider audits are being conducted within a 24-month timeframe. When pulling the monthly report of issues/deficiencies, TVFC staff also review to see that follow-up activities have been completed on time. During fiscal year 2023, review and verification of follow up activities for site reviews conducted by TVFC staff were not formally documented. Thus, we were unable to verify that the reviews were being conducted. Questioned costs: Unknown. Context: See “Condition.” Cause: Internal controls surrounding the site visits conducted are not formally documented. Effect: Lack of formal documentation of reviews may result in missed follow-up actions and potential noncompliance. Repeat finding: No Recommendation: TVFC staff should formally document the review of site visit results, including any relevant follow-up actions, to retain documentation of compliance. Views of responsible officials: DSHS agrees formal documentation of TVFC site visits and site-visit reviews would improve the process.
Eligibility Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families ALN: 93.558 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2301TXTANF, 2301TXTAN3, 2201TXTANF, 2201TXTAN3, 2101TXTANF, 2101TXTAN3 October 1, 2022 – September 30, 2023, October 1, 2021 – September 30, 2022, and October 1, 2020 – September 30, 2021 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: 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). According to United States Codes, Chapter 8 Aliens and Nationality, Chapter 14 – Restricting Welfare and Public Benefits of Aliens, §1611 Aliens who are not qualified aliens ineligible for Federal public benefits is as follows: (a) In general notwithstanding any other provision of law and except as provided in subsection (b), an alien who is not a qualified alien (as defined in section 1641 of this title) is not eligible for any Federal public benefit (as defined in subsection (c)). Condition: According to the DFPS’s Child Protective Services Handbook 2720 Responding to the Eligibility Statements CPS June 2020, IMPACT automatically makes the Emergency Assistance (EA) Eligibility Application/Determination section available when the caseworker completes the Risk Assessment tool and the risk level is ‘high’ or ‘very high.’ The caseworker completes this section, which contains three statements that each require a response of ‘YES’ in order for the child to be eligible for EA benefits. For one of 40 payments to program participants, we noted one of the three statements was answered ‘NO’ in IMPACT, which should have resulted in the determination that the child does not meet the emergency assistance eligibility criteria. However, the child and family were technically eligible for EA at closure of the investigation stage based on documentation. DFPS’s sandbox database reflects a conclusion that the child does meet the emergency assistance eligibility criteria indicating that the three statements had a response of ‘yes ‘at the time of stage closure. However, we were unable to verify a response of ‘yes’ for all three statements in IMPACT. Additionally, during our testing of 40 individual payments to program participants, we noted one participant being eligible based on the EA eligibility criteria in IMPACT. However, the child was not a U.S. citizen, qualified alien, or permanent resident and was ineligible to receive EA benefits. Questioned costs: $842.18. Context: See “Condition.” Cause: Exception related to statements in IMPACT was caused by system limitations. Exceptions related to eligibility determinations were due to management oversight. Effect: Failure to review and maintain accurate information may result in payments made to ineligible participants or overpayments to eligible participants. Repeat finding: 2022-002 Recommendation: DFPS should strengthen its internal controls and remedy system limitations to ensure accurate data is maintained in IMPACT. DFPS should also strengthen its internal controls over eligibility determinations. Views of responsible officials: DFPS acknowledges the incorrect EA Eligibility Determination was marked for question #2 in the EA Eligibility Application/Determination section in IMPACT. The caseworker marked no, but the answer should have been marked yes. Despite this system-generated discrepancy, interviews with family that were documented in the investigation report, did confirm the child was genuinely eligible for Emergency Assistance (EA). Notably, the child did not receive funding during the initial year but was later deemed eligible upon recertification a year later, without a clear understanding of the root cause for why the child was determined to be eligible at recertification. Citizenship: DFPS acknowledges the child was determined to be Emergency Assistance (EA) eligible based on (EA) eligibility criteria in IMPACT. DFPS also agrees the child was a not a US Citizen and therefore was not eligible to receive EA Benefits.
Allowable Costs/Cost Principles – Cost Allocations, Matching, Level of Effort, Earmarking (CHIP Only) Federal Agency: U.S. Department of Health and Human Services U.S. Department of Agriculture U.S. Department of Education Social Security Administration Federal Program Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Temporary Assistance for Needy Families (TANF) Social Services Block Grant (SSBG) Children’s Health Insurance Program (CHIP) Block Grants for Community Mental Health Services (MHBG) Block Grants for Prevention and Treatment of Substance Abuse (SABG) Medicaid Cluster Aging Cluster (nonmajor) Disability Insurance/SSI Cluster (nonmajor) Money Follows the Person Rebalancing Demonstration (nonmajor) CCDF Cluster (nonmajor) SNAP Cluster (nonmajor) Special Education-Grants for Infants and Families (nonmajor) ALN: 10.557 93.558 93.667 93.767 93.958 93.959 93.775, 93.777, 93.778 93.044, 93.045, 93.053 (nonmajor) 96.001, 96.006 (nonmajor) 93.791 (nonmajor) 93.575, 93.596, 93.489 (nonmajor) 10.551, 10.561 (nonmajor) 84.181 (nonmajor) Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: WIC 6TX700527, 6TX700507 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023, October 1, 2022 – September 30, 2024 TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023 CHIP 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01 6B08TI083478- 01M002, 6B08TI083478-01M003, 6B08TI083478-01M004 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Medicaid Cluster 2205TX5ADM, 2205TX5MAP, 2205TXIMPL; 2305TX5ADM, 2305TX5MAP, 2305TXIMPL October 1, 2021 – September 30, 2022, October 1, 2022 – September 30, 2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 45 CFR Section 95.507, the State shall submit a cost allocation plan for the State agency as required below to the Director, Division of Cost Allocation (DCA), in the appropriate HHS Regional Office. The plan shall describe the procedures used to identify, measure, and allocate all costs to each of the programs operated by the State agency. The cost allocation plan shall contain the procedures used to identify, measure, and allocate all costs to each benefitting program and activity. Per 45 CFR Section 95.509, the State shall promptly amend the cost allocation plan and submit the amended plan to the Director, DCA, if any of the following events occur, including if other changes occur which make the allocation basis or procedures in the approval cost allocation plan invalid. Condition: HHSC’s approved Public Assistance Cost Allocation Plan (PACAP) expenditures and revenues are initially allocated based on an estimate of Project ID percentages. After actual base statistical data is available, expenditures are reallocated and adjustments between estimated and actual costs are made. The adjustments will result in costs claimed for each period being allocated based on actual base statistics for the same period. Data is updated either by voucher, monthly, quarterly, semi-annually, or annually, depending on the Project ID. HHSC experienced significant delays in updating factors. By the end of the fiscal year, cost allocations had been updated only through August 2022. Although there is no documented policy over when the FMAP should be updated, HHSC will allocate costs at the FMAP that is in effect at the time of the transaction and will reallocate the transactions using the FMAP in effect at the time of the reallocation. This procedure was not followed in 2023 when the costs for four of 40 sample allocations tested in the CHIP program were allocated using a rate other than the current one in effect resulting in noncompliance with matching requirements. Questioned costs: Unknown Context: See “Condition.” Cause: HHSC’s General Ledger Unit is responsible for cost allocations. At the start of fiscal year 2023, the Unit suffered a loss of more than half of its staff due to turnover. Additionally, the current Federal Medical Assistance Percentage (FMAP) rates were in a stepdown process whereby the rate changed quarterly as opposed to yearly which intensified the workload. In addition, since transformation, the number of Public Assistance Cost Allocation Plan (PACAP) methodologies (Project IDs) has increased by 243%. These methodologies have become increasingly more complex, now including over 80 dependent factors of which some comprise more than 100 fund sources each. This huge increase in both volume and complexity has greatly increased calculation labor and risk of error. Effect: Failure to update factor allocations timely can result in questioned costs. Repeat finding: 2022-010, 2021-004, 2020-016, 2019-006, 2018-005, 2017-009, and 2016-024 Recommendation: HHSC should allocate adequate resources to ensure factor allocations are performed and reallocations are updated timely in order to present accurate information. Views of responsible officials: HHSC concurs with the finding.
Reporting – FFATA Subawards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Social Services Block Grant Block Grants for Community Mental Health Services Block Grants for Prevention and Treatment of Substance Abuse ALN: 93.558 93.667 93.958 93.959 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 MHBG 1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM083999-01M001, 6B09SM083830-01M001 October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, and October 1, 2020 – September 30, 2022 SABG 1B08TI085835-01,6B08TI085835-01M001, 6B08TI084673-01M001, 6B08TI084673-01M002, 1B08TI084673-01, 6B08TI083478-01M003 October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., 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) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: The HHSC Federal Funds Office (FFO) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). A standard FFATA Reporting template has been created by the FFO that includes all required elements to be submitted. Program departments must complete and submit the template to the FFO for all federal subawards with amounts over $30,000 by the 15th of every month to be included in that month’s submission. Currently, it is the responsibility of the individual program departments to ensure that each obligating action at or over $30,000 is reported in the FFATA Reporting Template no later than the end of the next month in which the obligation was made. Due to system limitations, there is no central tracking of award obligations. Thus, HHSC was unable to provide a population of first-tier subawards of $30,000 or more that were obligated during the fiscal year and required to be submitted in FSRS. Accordingly, we were unable to select a sample and test for internal controls over compliance or compliance. Questioned costs: None. Context: See “Condition.” Cause: CAPPS-FIN, HHSC’s system of record, does not have the capability to track the date of obligation of federal awards. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat finding: 2022-013, 2021-007 Recommendation: HHSC should implement functionality into CAPPS-FIN to track when obligations of federal awards are made so that the agency is able to retrieve a list of all subawards by obligation date in order to monitor compliance with the Federal Funding Accountability and Transparency Act. Views of responsible officials: HHSC agrees with the finding but does not concur with the recommendation insofar as it makes a specific designation of CAPPS-Financials as the system to ensure compliance.
Subrecipient Monitoring Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Temporary Assistance for Needy Families Social Services Block Grant Block Grants for Community Mental Health Services ALN: 93.558 93.667 93.958 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: TANF 2301TXTANF, 2301TXTAN3, 2201TXTANF, and 2201TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2021 – September 30, 2022 SSBG 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – September 30, 2023, and October 1, 2020 – September 30, 2022 MHBG 1B09SM087345, 6B09SM087345-01M001, 6B09SM087345-01M002, 6B09SM087345-01M003, 1B09SM087322-01,1B09SM085994-01, 6B09SM085994-01M001, 6B09SM085994-01M002, 6B09SM085994-01M003, 1B09SM083999 -01, 6B09SM083999-01M001, 1B09SM083830-01, 6B09SM083830- 01M001 October 1, 2022 – September 30, 2024, October 17, 2022 – October 16, 2024, October 1, 2021 – September 30, 2023, March 15, 2021 – March 14, 2024, March 15, 2021 – March 14, 2023, and October 1, 2020 – September 30, 2022 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain 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. Required information includes: Subrecipient’s unique entity identifier (UEI) Federal award identification number (FAIN) Federal award date of award to the recipient by the federal agency Assistance listings number and title Indirect cost rate for the federal award (including if the de minimis rate is charged) Condition: Audit procedures included a review of a sample of subrecipient contracts for required information with the following results noted: TANF – For a sample of 17, the contracts did not include: UEI (one sample) FAIN (four samples) Federal award date (four samples) Assistance listings numbers and title (four samples) Indirect cost rate, including if the de minimis rate is charged (four samples) SSBG – For 11 of 19 samples, the contract did not include neither the FAIN nor the federal award date of award to the recipient by the federal agency. MHBG – For 7 of 8 samples, the contract did not include neither the FAIN nor the federal award date of award to the recipient by the federal agency. Questioned costs: None. Context: See “Condition.” Cause: Current internal controls in place to ensure a review of subaward agreements is taking place to verify that all required elements are included per 2 CFR 200 §200.332 are not at the correct precision level. Effect: Providing incomplete information to subrecipients may result in inaccurate reporting by the subrecipients and ultimately by HHSC. Repeat Finding: No Recommendation: We recommend management enhance existing controls around the review of all subaward agreements to ensure that all pass-through agreements include each of the required elements by 2 CFR §200.332. Views of responsible officials: Temporary Assistance for Needy Families (TANF) - HHSC concurs with the finding. Social Services Block Grants (SSBG)/ Mental Health Block Grants (MHBG) - HHSC concurs with the finding.