#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
FINDING 2023-006 Subject: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii- Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listings Number: 14.228 Federal Award Number and Year (or Other Identifying Number): CV-CV1-233 Pass-Through Entity: Indiana Office of Community and Rural Affairs Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The passthrough agency required the County to submit a CDBG-CV report on Jobs Retained. The County collected the required information via phone calls made by one individual who compiled the information and submitted the required CDBG-CV report on Jobs Retained for the grant program without a documented oversight or review process. Furthermore, supporting documentation for the report was not retained for audit. Due to the lack of supporting documentation, we were unable to determine the accuracy of the report submitted. The lack of internal controls and the failure to maintain adequate supporting documentation was isolated to the CDBG-CV Report on Jobs Retained report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "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. . . ." Cause Management had not established a system of internal controls that would have ensured that adequate supporting documentation would have been maintained and made available for audit. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, we could not determine the County's compliance with the CDBG-CV Report on Jobs Retained report. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 26 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-003: Reporting Federal Program: Economic Adjustment Assistance [AL #11.307]. Criteria: Per 2 CFR 200.334, financial records, supports 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. Condition: The Bureau was unable to provide documentation that their annual report was submitted to the Kentucky Department of Tourism. As such, the report was unable to be tested. Cause: Controls were not in place to ensure records were maintained in accordance with the Uniform Guidance. Effect: The reporting requirements were unable to be tested. Questioned Costs: None Context: This is not a systemic problem. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Bureau maintain all records related to Federal awards, including making copies of reports submitted, to ensure compliance with the award. Management Response: The management team received limited guidance on the testing, reporting, and retention requirements of federal funds. In the future, copies of all reports and documentation of timely submission will be maintained by the management team.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
#2023-010 – Major Federal Award Finding – Document Retention Nature of Finding: Compliance Finding – Uniform Guidance Administrative Requirements and Material Weakness in Internal Controls Over Compliance This is a repeat of prior year finding #2022-011. Criteria/Condition: Federal regulations 2 CFR 200.334 provides that a non-federal entity must retain all records pertinent to a federal award for a minimum period of three years from the date of submission of the annual financial report. We noted during testing that records were not consistently being maintained. Cause/Context: For 4 of the 40 expenditures selected for testing, the Organization was unable to provide appropriate invoice documentation supporting the amount charged to the grant. Effect: Federal expenditures could be charged to the grant at incorrect amounts or for unallowable costs. Recommendation: We recommend the Organization implement a document retention policy that is consistent with the federal document retention requirements. Views of Responsible Officials and Planned Corrective Actions: MARR will retain a CPA consultant to implement a document retention policy that is consistent with federal document retention requirements.
FINDING 2023-006 Subject: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii- Reporting Federal Agency: Department of Housing and Urban Development Federal Programs: COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii Assistance Listings Number: 14.228 Federal Award Number and Year (or Other Identifying Number): CV-CV1-233 Pass-Through Entity: Indiana Office of Community and Rural Affairs Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 25 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. The passthrough agency required the County to submit a CDBG-CV report on Jobs Retained. The County collected the required information via phone calls made by one individual who compiled the information and submitted the required CDBG-CV report on Jobs Retained for the grant program without a documented oversight or review process. Furthermore, supporting documentation for the report was not retained for audit. Due to the lack of supporting documentation, we were unable to determine the accuracy of the report submitted. The lack of internal controls and the failure to maintain adequate supporting documentation was isolated to the CDBG-CV Report on Jobs Retained report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "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. . . ." Cause Management had not established a system of internal controls that would have ensured that adequate supporting documentation would have been maintained and made available for audit. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, we could not determine the County's compliance with the CDBG-CV Report on Jobs Retained report. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. INDIANA STATE BOARD OF ACCOUNTS 26 JEFFERSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County strengthen its system of internal controls to provide for a segregation of duties in the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-005: Significant Deficiency – Documentation Retention Federal grantor: Department of Commerce Condition: The Chamber was unable to provide supporting documentation for one expense sample. Criteria: According to 2 CFR § 200.334, recipients of federal awards must retain financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a federal award for a period of three years from the date of submission of the final expenditure report. Cause: The lack of documentation appears to result from inadequate procedures or oversight in retaining and securely storing required financial records related to the federal program. Effect: Failure to retain supporting documentation compromises the Chamber's ability to demonstrate allowability of costs, may result in questioned costs, and exposes the Chamber to risk in audits or federal monitoring reviews. Recommendation: We recommend the Chamber enhance its record retention policies and internal controls to ensure that all documentation supporting federal program expenditures is retained in compliance with 2 CFR § 200.334. Staff responsible for federal grants should receive training on documentation and retention requirements. Views of Responsible Officials and Planned Corrective Actions: The Chamber agrees with the findings and will improve its record retention practices to ensure all supporting documentation is properly maintained in compliance with federal requirements.
Criteria: The Company should establish and maintain effective internal control over federal awards to provide reasonable assurance that the award is managed in compliance with federal statutes, regulations, and the terms and conditions of the award. Adequate documentation must be maintained to support internal control activities and compliance with federal requirements. Statement of Condition: During our walkthroughs and substantive testing, supporting documentation was not available to allow us to evaluate whether required internal controls were performed. The documents were unavailable due to the expiration of the entity’s document retention period and employee turnover, which resulted in the loss of institutional knowledge about the controls performed during the award period. Because the requested documentation could not be provided, we were unable to verify the performance or effectiveness of internal controls related to the compliance requirement tested. Cause of Condition: The entity did not maintain documentation of internal control activities beyond the minimum required retention period and did not have processes in place to preserve institutional knowledge during employee turnover. As a result, supporting records necessary for testing internal controls over federal awards were no longer available. Effect of Condition: Due to the absence of supporting documentation, we were unable to determine whether internal controls over the compliance requirement were properly designed and operating effectively. This results in the inability to test internal controls and assess control risk at a “low” level. Recommendation: We recommend that management (1) strengthen record retention practices to ensure that documentation of internal control activities is preserved in accordance with 2 CFR 200.334 and is available for future audits, (2) implement procedures to maintain institutional knowledge, particularly during periods of employee turnover (e.g., documented policies, cross-training, centralized recordkeeping), and (3) consider extending retention periods for documents supporting high-risk federal programs or key internal control activities. Management should ensure documentation is sufficient to demonstrate compliance and support internal control operations. Identification of Repeat Finding: This finding is a repeat of the finding noted in the audit for December 31, 2022 as finding 2022-003. Views of Responsible Officials: Management understands and accepts the recommendation as outlined in the Corrective Action Plan.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions; and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits small purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that to the extent practicable, small purchases are distributed equitably among qualified suppliers. Of the 131 procurement transactions, 54 were identified as within the threshold established under § 625(c)(3)No. No. of Transactions General Ledger Account Name Amount 1 20 General Supplies $ 16,123 2 18 Fuel & Other Pol Products 9,220 3 7 Advertising 5,480 4 4 All Other Rentals 3,467 5 3 Boat Rentals 4,900 6 1 Medical Supplies 364 7 1 Vehicle Cycle Etc Rentl 540 Total: 54 $ 40,094 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed, was not available in the procurement or vendor files. Of the 57 purchase orders issued during the year ended September 30, 2023, 4 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $1,978,024. No. Purchase Order # Vendor Amount 1 22301491 PATIENT FOCUS ARFICA (PTY) TD. $ 48,349 2 22303764 ARC CONSULTANCY 131,924 3 22305075 GOPHER SPORT 95,036 4 PC2 ROJECT BELAU SUBMARINE CABLE CORPORATION 1,702,715 Total: $ 1,978,024 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of required procedures to equitably distribute small purchases among qualified suppliers. Additionally, the Republic’s procurement procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions, and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that to the extent practicable, small purchases are distributed equitably among qualified suppliers. Of the 143 procurement transactions, 46 were identified as within the threshold established under § 625(c)(3). No. No. of transactions GL Account Name Amount 1 19 Machinery & Equip Repair $ 6,103 2 24 General Supplies 17,106 3 1 Professional 425 4 1 Advertising 500 5 1 Conference 504 Total: 46 $ 24,638 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed was not available in the procurement or vendor files. Of the 38 purchase orders issued during the year ended September 30, 2023, 2 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $92,149. No. Purchase Order # Vendor Amount 1 22305991 EDHANNAH EDUCATION CONSULTING SERVICES $ 21,000 2 22300871 GUAM CEDDERS 71,149 Total: $ 92,149 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of required procedures to equitably distribute micro‑purchases among qualified suppliers. Additionally, the Republic’s procurement procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions, and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that small purchases are distributed equitably among qualified suppliers. Of the 583 procurement transactions, 140 were identified as within the threshold established under § 625(c)(3). No. No. of Transactions General Ledger Account Name Amount 1 7 Boat Rentals $ 9,400 2 64 General Supplies 60,349 3 7 Advertising 1,045 4 6 Conference 11,800 5 1 All Other Purchased Serv 1,999 6 39 Vehicle Cycle Repair 7,987 7 12 Building/Space Rentals 5,830 8 4 Machinery & Equip Repair 837 Total: 140 $ 99,247 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed was not available in the procurement or vendor files. Of the 185 purchase orders issued during the year ended September 30, 2023, 19 were identified as covered transactions subject to federal suspension and debarment requirements, totaling $2,101,228, of which 12 totaling $1,919,175 were selected for testing. No. Purchase Order # Vendor Amount 1 22300843 MEDPHARM $ 93,032 2 22301907 PACIFIC SOURCE INC. LTD. 490,573 3 22301908 PACIFIC SOURCE INC. LTD. 512,382 4 22301909 PACIFIC SOURCE INC. LTD. 463,320 5 22302788 MEDPHARM 111,550 6 22300845 MD WHOLESALE 55,160 7 22301465 MD WHOLESALE 11,952 8 22302557 MD WHOLESALE 29,607 9 22302790 MEDPHARM 80,946 10 22303546 G&N CLEANING EXPRESS 16,560 11 22306254 ARC HEALTH 37,125 12 22307066 MD WHOLESALE 16,968 Total: $ 1,919,175 Auditor verification of the above vendors in SAM.gov did not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases and does not include procedures to equitably distribute micro‑purchases among qualified suppliers. Additionally, the Republic’s procurement and vendor compliance procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: Finding 2022-009 Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition and to equitably distribute micro‑purchases among qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
Criteria: 1. In accordance with 2 CFR § 200.319(a), all procurement transactions under a Federal award must be conducted in a manner that provides full and open competition. Further, 2 CFR § 200.320(a)(1)(i) requires that, to the extent practicable, micro‑purchases be distributed equitably among qualified suppliers. 2. 2 CFR § 200.214 subjects non‑Federal entities to the non-procurement suspension and debarment regulations in 2 CFR part 180, which restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from Federal awards. Under 2 CFR § 180.300, before entering into a covered transaction with another person or entity at the next lower tier, the non Federal entity must verify that the party is not excluded or disqualified. This verification may be completed by reviewing the SAM.gov Exclusions, obtaining a certification from the entity, or including an appropriate suspension and debarment clause or condition in the contract or agreement. Further, in accordance with 2 CFR § 200.318(i), non‑federal entities must maintain records sufficient to document the history of procurement transactions, and 2 CFR § 200.334 requires retention of all supporting documentation for Federal awards. Together, these regulations require that documentation of the suspension and debarment verification be retained to demonstrate compliance with Federal procurement and suspension and debarment requirements. Condition: 1. The Republic’s procurement regulation § 625(c)(3) permits small purchases under $2,500 after obtaining one written price quotation. However, the policy does not demonstrate full and open competition to ensure that micro‑purchases are distributed equitably among qualified suppliers. Of the 224 procurement transactions, 72 were identified as within the threshold established under § 625(c)(3). Condition, continued: No. No. of transactions General Ledger Account Name Amount 1 18 General Supplies $ 19,541 2 1 All Other Rentals 240 3 13 Freight 6,894 4 3 Boat Rentals 3,000 5 3 All Other Purchased Serv 1,635 6 3 Conference 6,463 7 5 Vehicle Cycle Repair 628 8 11 Advertising 4,309 9 1 Dues & Fees 700 10 3 Machinery & Equip Repair 899 11 11 Fuel & Other Pol Products 5,865 Total: 72 $ 50,174 2. The Republic represents that vendors are verified in SAM.gov before entering into covered transactions; however, no documentation was retained to demonstrate that the required verification occurred. Documentation such as screenshots, printouts, approval records, or other system‑based evidence showing that the SAM.gov check was performed was not available in the procurement or vendor files. Of the 70 purchase orders issued during the year ended September 30, 2023, 7 were identified as covered transactions subject to federal suspension and debarment requirements totaling $229,639. No. Purchase Order # Vendor Amount 1 22300343 TLAU T. RIDPATH $ 32,500 2 22301468 MD WHOLESALE 5,371 3 22302270 UNIVERSITY OF HAWAII - OFFICE OF RESEARCH SERVICES 59,738 4 22304018 JMI-EDISON 93,300 5 22304084 SOCIAL SECURITY ADMINISTRATION 7,500 6 22306331 BELAU MEDICAL CLINIC 21,870 7 22307680 DIAGNOSTIC LABORATORY SERVICES, INC 9,360 Total: $ 229,639 Condition, continued: Auditor verification of the above vendors in SAM.gov not identify any as suspended or debarred. However, the absence of documentation prevents the Republic from demonstrating compliance with Federal suspension and debarment requirements. Cause: The Republic’s procurement policy does not ensure full and open competition for small purchases due to lack of procedures to equitably distribute small purchases among qualified suppliers. Additionally, the Republic’s procurement and vendor compliance procedures do not require the retention of documentation evidencing that suspension and debarment checks were performed. Effect: The Republic is not in compliance with Federal procurement, suspension and debarment requirements. Without federally compliant procedures and supporting documentation, the extent of questioned costs cannot be determined, resulting in an undeterminable question cost. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Republic update its procurement policies and procedures to include specific guidance to ensure full and open competition and to equitably distribute small purchases among available qualified suppliers. Management should ensure that documentation supporting the basis for supplier selection is consistently maintained in procurement files. Additionally, we recommend that the Republic strengthen its procurement and vendor‑approval procedures to require retention of evidence demonstrating that suspension and debarment verification was performed for each covered transaction. Acceptable documentation may include date‑stamped screenshots of the SAM.gov search, system‑generated verification logs, or signed certifications. Documentation should be consistently retained in the procurement or vendor file to support compliance with Federal requirements. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.
FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBERS ALL AWARDS COMPLIANCE REQUIREMENT ACTIVITIES ALLOWED OR UNALLOWED TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA Uniform Guidance at 2 CFR 200 §200.302, Financial Management, establishes that: “(a) Each State must expend and account for the Federal award in accordance with State laws and procedures for expending and accounting for the State's funds. All recipient and subrecipient 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 the terms and conditions; and tracking expenditures to establish that funds have been used in accordance with Federal statutes, regulations, and the terms and conditions of the Federal award. (See § 200.450). (b) The recipient's and subrecipient's financial management system must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number, year the Federal award was issued, and name of the Federal agency or pass-through entity. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. When a Federal agency or pass-through entity requires reporting on an accrual basis from a recipient or subrecipient that maintains its records other than on an accrual basis, the recipient or subrecipient must not be required to establish an accrual accounting system. This recipient or subrecipient may develop accrual data for its reports based on an analysis of the documentation on hand. (3) Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. … (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award.” STATEMENT OF CONDITION As part of our understanding of internal controls and compliance testing regarding activities allowed or unallowed, we obtained a procedures manual. We found the following deficiencies: • The Center provided written internal control procedures over federal funds management. We observed that the policy didn’t include any detail of procedures, just a general requirement. In addition, the policy does not identify the personnel responsible for the processes to establish segregation of duties. • We selected a sample of 10 (number of disbursements selected) federal funds disbursed and noted that invoices are not marked as they are paid. • From the sample of federal funds disbursed, no evidence was found of approval or verification of allowability of the disbursement, proper segregation of duties, or accountability. • The Center lacks an adequate process to provide regular training to staff on Generally Accepted Government Auditing Standards, general documentation, acquisitions levels, formal agreements with vendors, vendor selections guidelines and best practices, required documentation regarding grant requirements and other internal best practices. QUESTIONED COSTS No questioned costs identified. PERSPECTIVE INFORMATION This is a systematic deficiency. After conducting personnel interviews, we were able to identify procedures for validating the payments. The person told us that after a need to purchase goods or services is identified by the centers, the entity Administrator requests authorization from the President. The President validates with the external accounting firm that the expense category is included in the approved budget and that funds are available before approving the payment. Procedures and internal controls manuals should provide for and ensure the segregation of duties. STATEMENT OF CAUSE The Center didn't have adequate internal controls in place, or documentation that presented adequate segregation of duties and compliance with applicable laws and regulations. In addition, no internal controls were documented that supported proper accountability of funds. POSSIBLE ASSERTED EFFECT The Center could incur in unallowable costs or activities and not be able to prevent or detect a transaction that doesn't comply with the Federal regulation. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS We recommend that management establish an adequate internal controls process that identifies documentation, personnel responsible and authorizations. In addition, we recommend management to update established written procedures and internal controls manuals to provide and document the segregation of duties related to the activities allowed or unallowed compliance requirement.
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 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 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 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 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 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 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.
Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Social Services Block Grant ALN: 93.667 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – 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 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_x0002_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. Title 42 USC 1397e requires states and territories to submit to the federal administering agency, the Office of Community Services, an annual Post Expenditure Report no later than six months following the close of the fiscal year. The report includes certain critical key line information including: 1. The number of eligible individuals who received services paid for in part or in whole with federal funds under the SSBG. 2. The amount of Social Services Block Grant funds spent in providing each service. Condition: During testing of key line items noted above in the FY2022 Annual Post Expenditure Report submitted in March 2023, we noted the following variances between the amounts reported and supporting documentation: Key Line Item 1 Children Family Planning Services – variance of 1,796 Prevention and Intervention – variance of 9,866 Protective Services – Children – variance of 13,511 Adults Age 59 Years and Younger Family Planning Services – variance of 107,476 Prevention and Intervention – variance of 19,398 Protective Services – Adults – variance of 21,973 Other Services – variance of 10,733 Adults Age 60 Years and Older Family Planning Services – variance of 4,549 Prevention and Intervention – variance of 868 Protective Services – Adults – variance of 71,969 Other Services – variance of 14,408 Adults of Unknown Age Prevention and Intervention – variance of 151 Key Line Item 2 SSBG Allocation Foster Care Services – Children – variance of ($77,124) Information & Referral – variance of $2,116 Protective Services – Adults – variance of ($59,467) Protective Services – Children – variance of ($114,243) Funds Transferred into SSBG Protective Services – Children – variance of ($6,948,063) Expenditures of All Other Federal, State, and Local Funds Family Planning Services – variance of $172,504,171 Foster Care Services – Children – variance of $674,230,152 Information & Referral – variance of $35,508,405 Protective Services – Adults – variance of $67,694,139 Protective Services – Children – variance of $1,145,408,512 Other Services – $171,788,478 Questioned costs: None. Context: See “Condition.” Cause: Current internal controls are not at the correct precision level to ensure the completeness and accuracy of the report. Additionally, HHSC did not follow current policies and procedures regarding record retention. More specifically, all variances listed for key line item 1 were due to lack of supporting documentation except for the Protective Services – Children variance of 13,511, which was the difference between amounts reported and supporting documentation provided. All variances for key line item 2 were due to lack of supporting documentation except the four amounts listed under SSBG Allocation, which are a result difference between amounts reported and supporting documentation provided. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. In addition, failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat Finding: No Recommendation: We recommend management revise its internal controls to reconcile expenditures reported on federal reports to federal expenditures in the general ledger. Additionally, HHSC should implement or revise 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.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Children’s Health Insurance Program ALN: 93.767 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – 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 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual). Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers for CHIP, which resulted in one exception for the following: A copy of the completed application was not included in the file. Enrollment of the provider was not completed within the last 5 years. Verification of the provider’s license was not included in the file. Required information on ownership and control was not disclosed. Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. A copy of the provider agreement was not included in the files. Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving CHIP funds. Repeat Finding: No Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in CHIP. Views of responsible officials: HHSC concurs with the finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Children’s Health Insurance Program ALN: 93.767 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – 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 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual). Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers for CHIP, which resulted in one exception for the following: A copy of the completed application was not included in the file. Enrollment of the provider was not completed within the last 5 years. Verification of the provider’s license was not included in the file. Required information on ownership and control was not disclosed. Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. A copy of the provider agreement was not included in the files. Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving CHIP funds. Repeat Finding: No Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in CHIP. Views of responsible officials: HHSC concurs with the finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
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 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 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 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 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 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 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.
Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Social Services Block Grant ALN: 93.667 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2301TXSOSR, 2201TXSOSR and 2101TXSOSR October 1, 2022 – September 30, 2024, October 1, 2021 – 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 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_x0002_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. Title 42 USC 1397e requires states and territories to submit to the federal administering agency, the Office of Community Services, an annual Post Expenditure Report no later than six months following the close of the fiscal year. The report includes certain critical key line information including: 1. The number of eligible individuals who received services paid for in part or in whole with federal funds under the SSBG. 2. The amount of Social Services Block Grant funds spent in providing each service. Condition: During testing of key line items noted above in the FY2022 Annual Post Expenditure Report submitted in March 2023, we noted the following variances between the amounts reported and supporting documentation: Key Line Item 1 Children Family Planning Services – variance of 1,796 Prevention and Intervention – variance of 9,866 Protective Services – Children – variance of 13,511 Adults Age 59 Years and Younger Family Planning Services – variance of 107,476 Prevention and Intervention – variance of 19,398 Protective Services – Adults – variance of 21,973 Other Services – variance of 10,733 Adults Age 60 Years and Older Family Planning Services – variance of 4,549 Prevention and Intervention – variance of 868 Protective Services – Adults – variance of 71,969 Other Services – variance of 14,408 Adults of Unknown Age Prevention and Intervention – variance of 151 Key Line Item 2 SSBG Allocation Foster Care Services – Children – variance of ($77,124) Information & Referral – variance of $2,116 Protective Services – Adults – variance of ($59,467) Protective Services – Children – variance of ($114,243) Funds Transferred into SSBG Protective Services – Children – variance of ($6,948,063) Expenditures of All Other Federal, State, and Local Funds Family Planning Services – variance of $172,504,171 Foster Care Services – Children – variance of $674,230,152 Information & Referral – variance of $35,508,405 Protective Services – Adults – variance of $67,694,139 Protective Services – Children – variance of $1,145,408,512 Other Services – $171,788,478 Questioned costs: None. Context: See “Condition.” Cause: Current internal controls are not at the correct precision level to ensure the completeness and accuracy of the report. Additionally, HHSC did not follow current policies and procedures regarding record retention. More specifically, all variances listed for key line item 1 were due to lack of supporting documentation except for the Protective Services – Children variance of 13,511, which was the difference between amounts reported and supporting documentation provided. All variances for key line item 2 were due to lack of supporting documentation except the four amounts listed under SSBG Allocation, which are a result difference between amounts reported and supporting documentation provided. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. In addition, failure to maintain adequate documentation pertinent to a federal award may result in noncompliance with grant terms and conditions. Repeat Finding: No Recommendation: We recommend management revise its internal controls to reconcile expenditures reported on federal reports to federal expenditures in the general ledger. Additionally, HHSC should implement or revise 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.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Children’s Health Insurance Program ALN: 93.767 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – 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 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual). Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers for CHIP, which resulted in one exception for the following: A copy of the completed application was not included in the file. Enrollment of the provider was not completed within the last 5 years. Verification of the provider’s license was not included in the file. Required information on ownership and control was not disclosed. Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. A copy of the provider agreement was not included in the files. Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving CHIP funds. Repeat Finding: No Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in CHIP. Views of responsible officials: HHSC concurs with the finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Children’s Health Insurance Program ALN: 93.767 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2105TX5021, 2205TX5021, 2305TX3002, 2305TX5021 October 1, 2020 – September 30, 2022, October 1, 2021 – September 30, 2023, October 1, 2022 – 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 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual). Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers for CHIP, which resulted in one exception for the following: A copy of the completed application was not included in the file. Enrollment of the provider was not completed within the last 5 years. Verification of the provider’s license was not included in the file. Required information on ownership and control was not disclosed. Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. A copy of the provider agreement was not included in the files. Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving CHIP funds. Repeat Finding: No Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in CHIP. Views of responsible officials: HHSC concurs with the finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
Special Tests and Provisions – Provider Eligibility – Lack of Documentation Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Medicaid Cluster ALN: 93.775, 93.777, 93.778 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 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: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303, a non-Federal entity must: Establish and maintain effective internal controls over federal awards that provide reasonable assurance they are managing federal awards in compliance with federal statutes, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs. 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 order to comply with federal provider eligibility requirements, HHSC must adhere to various subsections of 42 CFR Section 455 including but not limited to: § 455.104 – HHSC must require that disclosing entities, fiscal agents, and managed care entities provide the following disclosures: The name and address of any person (individual or corporation) with an ownership or control interest in the disclosing entity, fiscal agent, or managed care entity. The address for corporate entities must include as applicable primary business address, every business location, and P.O. Box address. Date of birth and Social Security Number (in the case of an individual) Other tax identification number (in the case of a corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) or in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest. Whether the person (individual or corporation) with an ownership or control interest in the disclosing entity (or fiscal agent or managed care entity) is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling; or whether the person (individual or corporation) with an ownership or control interest in any subcontractor in which the disclosing entity (or fiscal agent or managed care entity) has a 5 percent or more interest is related to another person with ownership or control interest in the disclosing entity as a spouse, parent, child, or sibling. The name of any other disclosing entity (or fiscal agent or managed care entity) in which an owner of the disclosing entity (or fiscal agent or managed care entity) has an ownership or control interest. The name, address, date of birth, and Social Security Number of any managing employee of the disclosing entity (or fiscal agent or managed care entity). § 455.105 – HHSC must enter into an agreement with each provider under which the provider agrees to furnish to it the following information related to business transactions within 35 days of request: The ownership of any subcontractor with whom the provider has had business transactions totaling more than $25,000 during the 12-month period ending on the date of the request; and Any significant business transactions between the provider and any wholly owned supplier, or between the provider and any subcontractor, during the 5-year period ending on the date of the request. § 455.106 – Before HHSC enters into or renews a provider agreement, or at any time upon written request by HHSC, the provider must disclose to HHSC the identity of any person who: Has ownership or control interest in the provider, or is an agent or managing employee of the provider; and Has been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the title XX services program since the inception of those programs. § 455.410 – HHSC must require all ordering or referring physicians or other professionals providing services under the State plan or under a waiver of the plan to be enrolled as participating providers. § 455.412 – HHSC must: Have a method for verifying that any provider purporting to be licensed in accordance with the laws of any State is licensed by such State. Confirm that the provider's license has not expired and that there are no current limitations on the provider's license. § 455.414 – HHSC must revalidate the enrollment of all providers regardless of provider type at least every five years. § 455.432 – HHSC must: Conduct pre-enrollment and post-enrollment site visits of providers who are designated as “moderate” or “high” categorical risks to the Medicaid program. Require any enrolled provider to permit CMS, its agents, its designated contractors, or HHSC to conduct unannounced on-site inspections of any and all provider locations. § 455.434 – HHSC must: Require providers to consent to criminal background checks including fingerprinting when required to do so under State law or by the level of screening based on risk of fraud, waste or abuse as determined for that category of provider. Establish categorical risk levels for providers and provider categories who pose an increased financial risk of fraud, waste or abuse to the Medicaid program. o Upon HHSC determining that a provider, or a person with a 5 percent or more direct or indirect ownership interest in the provider, meets HHSC's criteria hereunder for criminal background checks as a “high” risk to the Medicaid program, HHSC will require that each such provider or person submit fingerprints, in a form and manner to be determined by HHSC, within 30 days upon request from CMS or HHSC. § 455.436 – HHSC must confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases. Upon enrollment and reenrollment, HHSC must check the Social Security Administration's Death Master File (SSADMF), the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the Excluded Parties List System (EPLS), and any such other databases as the Secretary may prescribe. During the period the provider is enrolled, HHSC must check the LEIE and EPLS no less frequently than monthly. § 455.434 – HHSC must screen all initial applications, including applications for a new practice location, and any applications received in response to a re-enrollment or revalidation of enrollment request based on a categorical risk level of “limited,” “moderate,” or “high.” If a provider could fit within more than one risk level described in this section, the highest level of screening is applicable. Condition: Various departments within and contractors of HHSC are responsible for ensuring medical providers are properly licensed, screened, and enrolled in the Medicaid Program including Contract Administration and Provider Monitoring (CAPM), Access and Eligibility Services (AES), Procurement and Contracting Services, and the Texas Medicaid and Healthcare Partnership. Audit procedures included a review of 60 providers each for Medicaid, which resulted in the following (sampled exceptions noted in parentheses): A copy of the completed application was not included in the file. (9 providers) Enrollment of the provider was not completed within the last 5 years. (7 providers) Verification of the provider’s license was not included in the file. (7 providers) Required information on ownership and control was not disclosed. (11 providers) Supporting documentation was not included in the file indicating the provider consented to a criminal background check. (9 providers) Supporting documentation was not included in the file indicating the SSADMF database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the NPPES database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the LEIE database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the EPLS database was checked at the time of the most recent enrollment. (12 providers) Supporting documentation was not included in the file indicating the provider was categorized during screening as limited, moderate, or high risk. (13 providers) A copy of the provider agreement was not included in the files. (13 providers) Supporting documentation was not included indicating a pre- or post-enrollment site visit was conducted as required for providers designated as moderate or high risk. (13 providers) Supporting documentation was not included indicating the provider disclosed the identity of any person who had been convicted of a criminal offense related to that person's involvement in any program under Medicare, Medicaid, or the Title XX services program since the inception of those programs. (9 providers) Questioned costs: None. Context: See “Condition.” Cause: HHSC does not have adequate procedures in place to ensure required documentation is obtained and maintained to comply with federal provider eligibility requirements. Effect: Failure to obtain and maintain adequate documentation during the provider screening and enrollment process may result in otherwise ineligible or fraudulent providers receiving Medicaid funds. Repeat finding: 2022-014, 2021-008 Recommendation: HHSC should implement controls to ensure: Documentation is maintained for at least the length of the providers’ current enrollment period or three years, whichever is greater in accordance with 2 CFR 200.334. Provider licenses are verified during enrollment. Providers are re-enrolled at least once every five years. Provider agreements are obtained, and the proper disclosures are made. Providers are categorized according to risk level and pre- and post-enrollment site visits are conducted as required for those deemed moderate or high risk. Relevant federal databases are checked during initial enrollment and at least monthly for all providers currently enrolled in Medicaid. Views of responsible officials: HHSC concurs with this repeat finding.
FINDING 2023-001 DOCUMENT RETENTION SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A Assistance Listing Number: 84.010 Condition The Indiana Department of Education uses data on the poverty levels of students in determining funding amounts for the program. We selected a sample of forty students from the Real Time Data report used in making funding assessments for the year under audit. The School was unable to provide documentation to support the poverty levels of ten of those students. Criteria Per 7 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.” Cause The School did not maintain poverty level documentation for all students reported. Effect We were unable to determine if the poverty levels of all students were properly reported. Funding amounts could have been incorrectly determined. Recommendation We recommend the School develop internal controls requiring the maintenance of student poverty level documentation. Views of Responsible Officials The School’s Corrective Action Plan is included on page 24.
FINDING 2023-001 DOCUMENT RETENTION SIGNIFICANT DEFICIENCY Federal Program: Title I, Part A Assistance Listing Number: 84.010 Condition The Indiana Department of Education uses data on the poverty levels of students in determining funding amounts for the program. We selected a sample of forty students from the Real Time Data report used in making funding assessments for the year under audit. The School was unable to provide documentation to support the poverty levels of ten of those students. Criteria Per 7 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.” Cause The School did not maintain poverty level documentation for all students reported. Effect We were unable to determine if the poverty levels of all students were properly reported. Funding amounts could have been incorrectly determined. Recommendation We recommend the School develop internal controls requiring the maintenance of student poverty level documentation. Views of Responsible Officials The School’s Corrective Action Plan is included on page 24.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.
Assistance Listing Number(s): 10.553 and 10.555 Name of Federal Program or Cluster: Child Nutrition Cluster Name of Federal Agency: Department of Agriculture Name of Pass-through Entity: Wisconsin Department of Public Instruction Pass-through Entity Identifying Number(s): 2023-138142-DPI-SB-546, 2023-138005-DPI-SB-546, 2023-138005-DPI-NSL-547, and 2023-138005-DPI-SK_NSLAE-566 Award Period: July 1, 2022 through June 30, 2023 Criteria: According to 2 CFR, Part 200.334 of the Uniform Guidance, supporting documentation pertinent to a federal award must be retained for a period of three years from the date of submission of the expenditure. According to 2 CFR, Part 200.302(3) of the Uniform Guidance, records must be supported by source documentation. Condition: Supporting documentation for claims were not retained. Cause: Internal controls for funding claims have not been designed appropriately. Currently, there are no internal controls to ensure support for claims are retained in accordance with federal requirements. Questioned Costs: $344,674 Effect or Potential Effect: Incomplete or inaccurate information could be reported on funding claims. Context: A sample of 8 claims reports were selected from a population of 39. The testing found that supporting documentation for claims was not retained for any of the claims in the sample. Repeat Finding: No Recommendation: One City Schools, Inc. should design and implement appropriate internal controls for retaining support for claims in accordance with federal requirements. Views of Responsible Officials: One City Schools, Inc. agrees with the finding and are working on implementing internal controls for maintaining supporting documentation.