Finding 1171321 (2025-001)

Craven County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2025 U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid) AL #: 93.778 Finding: 2025-001 Inaccurate Information Entry SIGNIFICANT DEFICIENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Due to the nature of the populations provided from which the samples were chosen, we are unable to calculate questioned costs for the above mentioned potential eligibility and noncompliance errors. The deficiencies and noncompliance reported above are caused from ineffective record keeping and case review processes due to insufficient training of staff, lack of oversight from management, and/or inadequate communication between departments resulting in inconsistencies in data sharing and delayed information exchanges. We examined 60 cases from of a total of 520,055 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. This is a repeat finding from the immediate previous audit, 2024-001 and 2024-003. Note in FY 2025 Medicaid findings were combined into a single finding. Section III - Federal Award Findings and Questioned Costs There were a total of 9 errors found during our testing procedures: - There were 2 errors where income or household size was incorrectly calculated or inaccurate information was entered into the case file. - There were 7 errors where required information needed for eligibility determinations were not requested or not requested timely at applications or redeterminations. Federal regulations under 42 CFR § 435.956 require states to verify eligibility factors using electronic data sources where available, and to obtain documentation for unverifiable information. Additionally, the state's Medicaid manual (Aged, Blind and Disabled manual, Family and Children Medicaid manual and the Integrated Policy manual) mandates that all eligibility determinations include cross-verification of applicant-provided data against reliable external sources to ensure accuracy and prevent improper payments. These control deficiencies and noncompliance increase the risk of improper Medicaid payments, potentially resulting in overpayments to ineligible beneficiaries or underpayments to those who qualify. 186Craven County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2025 Recommendation: Views of responsible officials and planned corrective actions: Program Name: Medical Assistance Program (Medicaid) AL # 93.778 N.C. Office of State Budget and Management Program Name: Regional Economic Development Reserve Finding: 2025-002 Funds Management SIGNIFICANT DEFICIENCY Cash Management Criteria: Condition: Effect: Cause: Recommendation: Views of responsible officials and planned corrective actions: None reported. The County agrees with the finding. See Corrective Action Plan in the following section. Including grant activity in the General Fund can decrease clarity and separation of grant transactions, increasing the risk of noncompliance with grant and statutory requirements. The requirement to establish a separate fund was not incorporated during budget development and initial grant setup. Review grant agreements for the separate fund requirement clause, record all related revenues and expenditures accordingly, and establish a standardized process for setup and review to ensure proper grant establishment before posting transactions. According to the grant agreement and award terms issued by the North Carolina Office of State Budget and Management (OSBM), grant activities must be recorded in a separate fund and accounting system within the recipient’s central accounting to ensure proper separation, tracking, and reporting of grant revenues and expenses. Grant revenues and expenditures were recorded in the County’s General Fund instead of a separate grantspecific fund. SIGNIFICANT DEFICIENCY: Finding 2025-001 also apply to State requirements and State Awards. Section IV - State Award Findings and Questioned Costs Section III - Federal Award Findings and Questioned Costs (continued) Section V - Passenger Facility Charge Program Findings and Questioned Costs The County agrees with the finding and is implementing actions to correct these issues, which are further discussed in the corrective action plan. We recommend that management enhance internal controls by: (1) Providing comprehensive training to staff on the program's eligibility requirements and procedures outlined in the State's Medicaid manuals; (2) Ensuring that there is a formal internal review process and that it is adequately completed to identify and correct errors and monitor compliance; and (3) Communicating all program or policy changes clearly and timely across all departments who oversee eligibility determinations for federal funded programs. 187