Finding 1181349 (2025-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-03-18

AI Summary

  • Core Issue: Errors in eligibility determinations led to four applicants receiving benefits they were not eligible for, resulting in questioned costs of $3,486.69.
  • Impacted Requirements: Compliance with 42 CFR 435 and 2 CFR 200 was not met due to inadequate documentation and ineffective internal controls.
  • Recommended Follow-Up: Conduct internal reviews of case files, retrain staff on documentation requirements, and ensure all files include necessary verifications and accurate records.

Finding Text

Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. Condition: There was one error discovered during our procedures that lacked the appropriate ex parte review and three errors in which erroneous income evidence was used during eligibility determinations. Four applicants/beneficiaries receivedassistance for which therecipient was not eligible. Questioned Costs: The amount of claim paid on behalf of the above ineligibility error resulted in a questioned costs of $3,486.69 Context:Weexamined120Medicaidtransactionsoutof637,152tore-determineeligibility. Thesefindingsweredisclosedinaseparatelyissued spreadsheet to the North Carolina Department of Health and Human Services and are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST which affect countable resource and a participant could have been approved for benefits that they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2024-001. Cause:Ineffectiverecordkeepingandineffectivecasereviewprocess,incomplete documentation,andincorrectapplicationofrulesforpurposes of determining eligibility. Recommendation:Filesshouldbereviewedinternallytoensureproperdocumentationisinplaceforeligibility.Workersshouldberetrainedon what files should contain and the importance of complete and accurate record keeping.Werecommend thatall filesinclude online verifications, documented resources of income and those amounts agree to information in NC FAST. Views of responsible officials and planned corrective actions: The County agrees with the finding. Supervisors will perform second party reviewstoensureproperdocumentationiscontainedinfilestosupporteligibilitydeterminations.Workerswillberetrainedonwhatinformation should be maintained incase files,the importance of complete and accurate record keeping,and reserve calculations. The County finance office will also participate in the review process.

Corrective Action Plan

Name of contact Person: Brittany Naylor, Director of Social Services CorrectiveAction:Thisfinding continues to be cited asanongoingeligibilitydeterminationerrorfrom prioraudits, despite exhaustive efforts to resolve the issue. Lenoir County has worked diligently to address the backlog of exparte reviewsand bring all reporting upto date.Based onall availablereports accessibleto ouragency,wehave completedthiseffortand arecurrentonallexpartereviews.Toensureaccuracy,Lenoir Countycontacted theState to confirm whether any additional reports or cases existed that were not reflected in our records. Based on the information provided, there are no outstanding reports listed beyond June 2019. Lenoir County has submitted an additional ticket to determine why these older exparte cases continue to appear as active in the system and to request assistance in resolving this issue. We remain committed to collaborating with the State to identify and address any outstanding exparte reviews that may not be reflected in our current reports. Thisfindingalsodisclosedfourapplicantsand,/orbeneficiariesreceivingassistanceforwhichtherecipientwasnot eligible. This finding consisted of the failure of worker to check all case references to determine eligibility. Lenoir County failed to check and include all financial income on two cases and failed to complete an income budget calculation correctly on one case. The following steps will be added to existing practices to ensure ongoing eligibility compliance. Staff meeting will be held Wednesday, February 18,2026 and the following training materials will be discussed and provided to the Medicaid staff to ensure continued understanding and knowledge of program requirements. MAGI policy manual 3306 - Modified Adjusted Gross Income - will be reviewed and additional guidance provided on how to effectively calculate income correctly to determine eligibility for case actions. Verbally explain and provide MAGI Budgeting: 5% Income Disregard PowerPoint and ensure that staff understand how to apply the deduction correctly to case actions. Verbally explain and provide Reasonable Compatibility PowerPoint and ensure that staff understand when and how to apply reasonable compatibility to case per policy requirements. Providing staff with copies of the Single County Audit findings, the Corrective Action plan and staff expectations to ensure that staff is well informed of the findings and what is expected from the Corrective Action Plan implementation. Staff will be required to complete adding machine calculations and check amounts against NC FAST system calculations to verify correct financial income for case actions. A summary check-off form has been created to ensure that staff are checking NC FAST determinations page to cross reference system eligibility approvals are inline with client case actions. Workers must check household size and compare case composition to ensure correct eligibility results. Supervisor and/or Lead Worker will complete 100% 2nd party reviews on all new hires until each worker receives a 95% or higher accuracy processing rating and will complete a minimum of 5 2nd party reviews for each existing worker to target these key areas of concern until all workers reach and maintain a 95% or higher accuracy processing rating. Staff will correct any findings within three days of receipt of 2nd party review findings. Supervisors and Lead Workers will continue to monitor case actions and provide monthly statistical data detailing case findings. The Supervisor and Lead Worker will provide a list of findings and maintain scheduled monthly meetings with staff to provide feedback and coaching to ensure continued compliance of program requirements. The meetings held will consist of staff unit meetings and/or individual conferences provided by the Supervisors in an effort to effectively catch and manage error trends that have been discovered from 2nd party review findings All documentation will be submitted to the Administrator for review and will be discussed and reviewed with the Supervisors during monthly conference meetings. The Administrator will provide monthly updates on case actions and findings to the Director. Proposed Completion Date: The exparte issue is expected to be resolved when data is received from State, not to exceed timeframeofJune30,2026.Training willbeheldwith MedicaidStaffonWednesday,February18,2026 for other eligibility issues cited. Corrective Action Plan will be implemented immediately after training and significant improvement of all areas cited must be maintained by June 30, 2026.

Categories

Eligibility Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1181350 2025-002
    Material Weakness Repeat
  • 1181351 2025-003
    Material Weakness Repeat
  • 1181352 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.778 MEDICAL ASSISTANCE PROGRAM $2.14M
93.563 CHILD SUPPORT SERVICES $1.23M
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $807,809
97.044 ASSISTANCE TO FIREFIGHTERS GRANT $491,874
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $456,752
16.838 COMPREHENSIVE OPIOID, STIMULANT, AND OTHER SUBSTANCES USE PROGRAM $354,827
20.526 BUSES AND BUS FACILITIES FORMULA, COMPETITIVE, AND LOW OR NO EMISSIONS PROGRAMS $301,200
20.509 FORMULA GRANTS FOR RURAL AREAS AND TRIBAL TRANSIT PROGRAM $236,792
16.585 TREATMENT COURT DISCRETIONARY GRANT PROGRAM $164,119
93.596 CHILD CARE MANDATORY AND MATCHING FUNDS OF THE CHILD CARE AND DEVELOPMENT FUND $146,978
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $128,073
93.767 CHILDREN'S HEALTH INSURANCE PROGRAM $116,858
93.568 LOW-INCOME HOME ENERGY ASSISTANCE $68,322
93.217 FAMILY PLANNING SERVICES $55,528
93.917 HIV CARE FORMULA GRANTS $53,337
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $49,859
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $40,000
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $35,958
93.967 CENTERS FOR DISEASE CONTROL AND PREVENTION COLLABORATION WITH ACADEMIA TO STRENGTHEN PUBLIC HEALTH $33,804
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $30,741
93.667 SOCIAL SERVICES BLOCK GRANT $24,556
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $24,251
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $14,800
93.645 STEPHANIE TUBBS JONES CHILD WELFARE SERVICES PROGRAM $13,126
93.898 CANCER PREVENTION AND CONTROL PROGRAMS FOR STATE, TERRITORIAL AND TRIBAL ORGANIZATIONS $8,125
93.658 FOSTER CARE TITLE IV-E $4,646
93.556 MARYLEE ALLEN PROMOTING SAFE AND STABLE FAMILIES PROGRAM $3,411
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $3,000
16.606 STATE CRIMINAL ALIEN ASSISTANCE PROGRAM $2,219
93.110 MATERNAL AND CHILD HEALTH FEDERAL CONSOLIDATED PROGRAMS $2,000
93.674 JOHN H. CHAFEE FOSTER CARE PROGRAM FOR SUCCESSFUL TRANSITION TO ADULTHOOD $1,500
93.977 SEXUALLY TRANSMITTED DISEASES (STD) PREVENTION AND CONTROL GRANTS $100