Finding Text
Material Weakness/Noncompliance – Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Special Tests and Provisions – Payment Rate Setting and Application 2 CFR Part 200, Subpart E and appendices III-VII establish principles and standards for determining allowable direct and indirect costs for Federal awards. • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. • Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the Federal award as to types or amount of cost items. • Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. • Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. • Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian tribes only, as otherwise provided for in 2 CFR Part 200. • Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period. • Be adequately documented. 45 CFR Section 1356.21(m)(1) and 45 CFR Section 1356.60 (a)(1) and (c) establish guidelines for proper allocation of rates between maintenance and administrative expenditures in conformance with cost principles. Maintenance and administrative expenditure payments need to be properly calculated and in accordance with Title IV-E agency’s policies to ensure only allowable costs are charged to the program. Rates used should be based upon established payment rates per the Title IV-Es agency’s rate schedule for maintenance and administrative costs. The agency should establish foster care maintenance and administrative expenditure payment rates which provide only for costs which are necessary for the proper and efficient administration of the program, and which are for allowable costs Further, periodic review of payment rates should be performed to ensure the rates’ continuing appropriateness. During testing we identified instances where amounts claimed did not agree to amounts invoiced by providers. In addition, we identified several instances where the amount reimbursed was not calculated correctly. There were instances of over and underpayments as a result of clerical errors in rates entered into the SAWCIS, the statewide automated child welfare information system that assists in payment processing and case management. These over/under payments resulted in noncompliance with activities allowed or unallowed, allowable costs/cost principles, and special tests and provisions – payment rate setting and application as described above. We recommend the Children Services department implement additional monitoring procedures to ensure amounts claimed and amounts requested for reimbursement are input correctly and calculated in accordance with applicable compliance requirements.