Finding Text
Finding 2025-004: Significant Deficiency - Internal Control and Compliance Over Reporting Program: Medicaid Cluster Assistance Listing Number: 93.778 Pass-Through Agency: Wisconsin Department of Health Repeat of Prior Year Finding 2024-005 Criteria: The WI DHS School-Based Services Handbook requires school districts to report salaries, benefits and contracted staffing costs by practitioner license classification each quarter and within the SBS Annual Cost Report. A system of internal control should be in place and operating effectively to achieve a high reliability that errors or irregularities in reporting would be discovered by District staff. This review should be documented and supporting evidence retained. Condition/Context: The two Quarterly Financial Summary reports selected for testing were prepared and submitted by the same person, with no documentation of review by another person. The SBS Annual Cost Report was also prepared and submitted by the same individual with no additional documentation of review. Additionally, of the two Quarterly Financial Summary Reports tested, one report included errors in cost totals resulting in overreported costs. Contracted staff costs that were eligible to be reimbursed through the State Special Education Program were not properly removed from the total net staff costs reported. The SBS Quarterly Financial Summary and Annual Cost Report do not constitute a direct reimbursement claim for funding. Thus the $33,210 of questioned costs reported did not result in an award to the district of $33,210. Additionally, the District corrected the 3rd quarter reporting upon being notified of the error, leading to a corrected SBS Annual Report. Cause: There is no formal process for preparation and review of the Quarterly Financial Summaries and the Annual Report. Effect: Without proper review of claims, incorrect amounts could be claimed on the reports and could result in over (or under) funding. Questioned Costs: Questioned costs for ALN number 93.778 include total contracted staff expenses of $33,210 erroneously reported within the 3rd quarter financial summary's net staff costs. Recommendation: We recommend the District implement a process for the preparation and review of the Quarterly Financial Summary and Annual Cost reports prior to submission. This review should include review of support and intervening calculations and review of the report for completeness and accuracy. Documentation of these reviews should be maintained by the District for later viewing. Views of Responsible Officials: Management agrees with finding 2025-004 and will make efforts to implement recommended procedures. Management submitted a corrected version of the tested 3rd Quarterly Financial Summary to SBS after audit fieldwork.