Finding 1222669 (2025-007)

Finding 2025-007 Assistance Listing Number(s): 93.558 Name of Federal Program or Cluster: Temporary Assistance for Needy Families 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, 2024 through June 30, 2025 Criteria or Specific Requirement: Federal TANF requirements provide that assistance must be paid only to or on behalf of eligible participants, must be accurately calculated, and must be discontinued when eligibility expires, including compliance with the 60-month lifetime limit. Internal controls should ensure benefit payments are identifiable by participant and reconciled to eligibility determinations. Condition: During testing, the client provided handwritten listings of benefits paid to individual participants maintained within participant files. However, these records were maintained separately and were not integrated with or traceable to the general ledger. As a result, the auditors were unable to reconcile participant-level records to accounting records to determine whether all benefits recorded in the general ledger were paid to or on behalf of specific participants or whether all benefits provided were completely and accurately captured in participant files. Consequently, the auditors were unable to determine whether benefits were paid to 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 benefit payment processing and recordkeeping, including lack of integration between participant records and accounting records, absence of reconciliation procedures, and insufficient monitoring of benefit calculations and duration. Effect or Potential Effect: Because benefit payments cannot be traced to individual participants or reconciled to eligibility determinations, the entity cannot demonstrate that payments were made only to eligible participants, that benefit amounts were accurate, or that assistance was discontinued when eligibility expired. This creates a significant risk of ineligible or improperly calculated payments. Repeat Finding: This finding is a repeat of 2024-004. Recommendation: The entity should strengthen internal controls over TANF benefit payments by implementing procedures to ensure payments are identifiable by participant and reconciled to eligibility records. The entity should also establish controls to verify benefit calculations and ensure assistance is discontinued when eligibility expires, and maintain sufficient documentation to demonstrate compliance with program requirements. 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.