Finding Text
Assistance Listing Number: 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families (TANF) Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entity: Virginia Department of Social Services Pass-Through Entity Identifying Number: BEN-21-029 Award Period: July 1, 2023 through June 30, 2024 Criteria or Specific Requirement: Federal TANF requirements provide that assistance may only be paid to or on behalf of eligible participants and that benefit amounts must be calculated in accordance with applicable program rules. In addition, assistance must be discontinued when a participant’s eligibility period expires, including compliance with the 60-month lifetime limit on federally funded TANF assistance. Internal controls should be designed and implemented to ensure that benefit payments can be identified by individual participant, reconciled to eligibility determinations, and monitored to ensure that benefits are accurately calculated and provided only for the period during which participants are eligible to receive assistance. Condition: During testing, the auditors noted that while the entity maintained handwritten lists of expenses by participant, these records were maintained separately by individual and were not integrated with or readily traceable to the general ledger. As a result, the auditors were unable to reconcile the handwritten participant-level records to the accounting records to determine whether the costs recorded were complete or accurately reflected all benefits paid on behalf of those participants. In addition, although dates were included on the handwritten sheets, there is a risk that the recorded information was incomplete and did not capture all payments actually made. Consequently, the auditors were unable to determine whether benefits paid were made to or on behalf of eligible participants, whether amounts were accurately calculated, or whether assistance was discontinued when eligibility periods expired. Cause: The deficiencies resulted from inadequate internal controls over TANF benefit payment processing and recordkeeping. Specifically, the entity’s accounting records did not identify benefit payments by individual participant, and procedures were not in place to reconcile benefit payment records with participant eligibility records. In addition, the entity did not maintain adequate documentation or monitoring procedures to verify that benefits were correctly calculated or discontinued when eligibility periods expired. Effect or Potential Effect: Because benefit payments cannot be traced to individual participants or reconciled to eligibility determinations, UCM cannot demonstrate that payments were made only to eligible participants, that benefit amounts were accurately calculated, or that assistance was discontinued when participants were no longer eligible. As a result, there is an increased risk that ineligible payments may have occurred or that benefit amounts may have been incorrectly determined. Additionally, the inability to trace payments to participants prevents verification of compliance with the TANF program’s 60-month lifetime assistance limitation. Recommendation: UCM should strengthen internal controls over TANF benefit payments and eligibility duration by implementing procedures that ensure benefit payments are identifiable by individual participant and can be reconciled to participant eligibility records. UCM should establish controls requiring documentation to support the calculation of benefit amounts and monitoring procedures to ensure that assistance is discontinued when participants’ eligibility periods expire. In addition, UCM should maintain sufficient documentation to demonstrate that benefits provided comply with program requirements, including the 60-month lifetime limit on federally funded TANF assistance. Views of Responsible Officials: Management acknowledges the finding and will work to implement appropriate corrective actions to address the deficiency and improve compliance going forward.