Finding 1118245 (2023-005)

2023-005 Local Collaborative Time Study (LCTS) Reporting (Cost Schedules DHS-3220) Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM; 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For County federal awards received from the Minnesota Department of Human Services (DHS), internal control should be established and maintained to provide assurance that program reports submitted to DHS are accurate and completed in accordance with DHS reporting instructions. DHS Bulletin No. 16-32-04 requires the Local Collaborative Time Study (LCTS) Fiscal Reporting and Payment Agent to review DHS-3220 quarterly reports prior to their submission. Condition: In a sample of six DHS-3220 Cost Schedules tested, none were reviewed by the County’s LCTS Fiscal Reporting and Payment Agent. Questioned Costs: None. Context: The DHS-3220 Cost Schedules are submitted quarterly by each member of a collaborative to DHS for reimbursement of LCTS money, which is reimbursed to the County, in part, with federal Medical Assistance Program funds. Lake County Public Health and Human Services acts as the LCTS Fiscal Reporting and Payment Agent for the local collaborative in Lake County. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: If reviews are not performed, there is an increased possibility that an error will occur and not be detected, resulting in the County receiving the incorrect amount of federal reimbursements. Cause: Staff from Lake County Public Health and Human Services were not aware of the review requirements for the collaborative partners’ quarterly reports. Recommendation: We recommend the County implement procedures to ensure the DHS-3220 Cost Schedules are reviewed and evidence of the review is retained. View of Responsible Official: Concur