FINDING REFERENCE NUMBER 2023-037 (See Finding Reference Number 2023-009)
FEDERAL PROGRAMS (ALN – 93.489; 93.575 AND 93.596) COVID-19 – CHILD CARE CLUSTER
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
AWARD NUMBERS G2101PRCDC6, G2101PRCSC6 (Federal Award Years: March 11, 2021 through September 30, 2026)
ADMINISTRATION ADMINISTRATION FOR THE CARE AND COMPREHENSIVE DEVELOPMENT OF CHILDREN (ACUDEN, BY ITS SPANISH ACRONYM)
COMPLIANCE REQUIREMENT ELIGIBILITY
TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS
CRITERIA Reference according to 2 CFR PART 200, APPENDIX XI (E) (1) (a), for state Lead Agencies and territory Lead Agencies, and for those tribal Lead Agencies with Grant Year 2016 allocations of at least $250,000, children must be under age 13 (or up to age 19, if incapable of self-care or under court supervision), who reside with a family whose income does not exceed 85 percent of state/territorial/tribal median income for a family of the same size, and reside with a parent (or parents) who is working or attending a job-training or education program; or are in need of, or are receiving, protective services. Lead Agencies may choose to provide services during periods of job search. Tribal Lead Agencies may elect to use state or tribal median income (42 USC 9858n(4); 45 CFR sections 98.20(a) and 98.81(b)). Tribal Lead Agencies also have the option for categorical eligibility (considering any Indian child within the service area eligible for services) if the tribe’s median income is below 85 percent of the state median income, provided that services go to those with the highest need.
State, territory, and tribal Lead Agencies may use supplemental funds appropriated by the CARES Act (Pub. L. No. 116-136), the CRRSA Act (Pub. L. No. 116-260), and the ARP Act (Pub. L. No. 117-2) to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other workers deemed essential during the response to the coronavirus, without regard to the income eligibility requirements. The Lead Agency may define which workers are considered essential in accordance with any relevant state, territorial, and tribal laws or policies.
STATEMENT OF CONDITION As part of our audit procedures for eligibility requirements, we selected forty (40) participants from a population of 11,139 who were eligible for the Child Care Program.
In one (1) instance, we found that ACUDEN incorrectly issued an eligibility approval to a participant. They granted eligibility for CARES Act funds by classifying the applicant as a first responder when her employment occupation is Hair Stylist based on her employment evidence.
QUESTIONED COSTS $7,416
PERSPECTIVE INFORMATION During the participant eligibility determination, the applicant submitted as employment evidence the individual Income Tax Return, but the application for CARES funding services does not detail the applicant's profession. Additionally, the employment activity evaluation also failed to detail the applicant's profession or field of work. ACUDEN provided us with a communication detailing the sectors classified as first responders, but Hair Stylist was not included. The sample was statistically valid.
In addition. The dollar amount approved as a benefit for this participant was $824 during the period of September 17, 2022, through July 31, 2023, according to the Certificate of Eligibility. Considering that the fiscal year 2023 ending date is 06/30/2023, then the period applicable will be from 10-31-2022 through 06-30-2023 and this represent nine (9) months of services paid to the service provider amounting of $7,416 (9 months X $824). In addition, as stated in the payments detail provided, the month of July 2023 was also paid. Then, considering that the total participant’s population was 11,139 and the sample selected was forty (40) participants, this only one (1) mistake found represents 2.5% of the sample of forty (40) participants (1 divided by 40 (1/40) = 2.5%). For misstatement extrapolation purpose to the population, this would represent an estimate of a potential misstatement of 279 cases [2.5% by 11,139 participants (2.5% x 11,139) = 278.47].
STATEMENT OF CAUSE ACUDEN lacks supervisory review, insufficient controls over eligibility verification of these funds.
POSSIBLE ASSERTED EFFECT An improper eligibility determination increases the risk of noncompliance and may result in improper use of funds. In addition, potential recipients of CARES Act funds may also be affected.
IDENTIFICATION OF
REPEAT FINDING No reported as prior audit finding.
RECOMMENDATIONS We recommend to ACUDEN to strengthen internal controls to ensure complete and accurate eligibility determination considering all the participant information at all eligibility determination stages of the process.