Finding 1223100 (2023-004)

Criteria 2 CFR § 200.303 states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The California Department of Health Care Services requires that quarterly administrative expense claims (invoices) be submitted within 60 days of the quarter end and any supplemental claims and revision within six months of the fiscal year end. Condition We selected 10 quarterly administrative expense claims submitted during fiscal year 2023 and noted the following: We also noted that claim templates had clerical errors in the period dates, creating confusion regarding the reporting period to which the claims related. There were instances in which the period dates were incorrect throughout the claims and instances in which the dates were not consistent across all pages of the claims. Cause The County’s Health and Human Services Department does not have a formal process to monitor and track reporting deadlines or maintain documentation if communications were made with the grantor regarding the need for an extension. The department has experienced staffing constraints leading to delays in preparing, reviewing, and filing reports for the CHDP and HCPCFC programs. Effect Untimely submission of reports may result in funding delays and potential denial of funding by the grantor if the fiscal year’s six-month deadline is exceeded. In addition, insufficient review of report content, such as covered periods, may create confusion, further delay the receipt of funding, and extend the time necessary to resolve discrepancies during subsequent audits. Questioned Costs None identified. Context We identified 20 administrative expense claims filed in fiscal year 2023. This included eight claims related to the prior fiscal year that were filed significantly after the applicable deadlines. We selected 10 of the 20 claims for review. The sample was not a statistically valid sample. Recommendation We recommend the County consider the following: 1. Establish a tracking system to identify all reports and their respective due dates. 2. Communicate with the grantor if required reports are expected to be submitted late and maintain correspondence. 3. Review employee responsibilities and workloads to properly allocate resources to support compliance needs. Views of Responsible Officials and Planned Corrective Action 1. Person responsible: Auditor-Controller 2. Corrective action plan: The County agrees with the finding and recommendation. The County Auditor’s office will work with department heads to establish a formalized policy of tracking timely reporting and correspondence procedures with grantors in the case of delayed reporting. In addition the County will appropriately allocate employee resources to ensure compliance with deadlines. 3. Anticipated implementation date: June 30, 2027