Finding 4873 (2023-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2023-12-15
Audit: 7032
Organization: Child Lane (CA)
Auditor: Guzman & Gray

AI Summary

  • Issue: An employee accessed the nutrition database and made unauthorized changes, leading to false reimbursement claims from January 2020 to March 2023.
  • Requirements Impacted: Compliance with CACFP guidelines for timely and accurate claim submissions and maintaining correct provider information.
  • Follow-Up: Implement stricter controls and procedures to limit access to the nutrition database and prevent unauthorized changes.

Finding Text

Condition: An employee of the Organization was able to access the Organization’s nutrition database and made unauthorized changes to nutrition provider information. As a result of these unauthorized changes, the employee submitted false nutrition claim reimbursements during the periods January 2020 to March 2023 for the employee’s personal benefit. Criteria: According to CACFP Administrative Manual Section 5.1, agencies must submit a claim for reimbursement using the Child Nutrition Information and Payment System (CNIPS) no later than 60 calendar days after the month claimed. Centers must ensure that staffing information, types of meals served, months of service, times of service, and all other information are correct and current DCH sponsors must ensure that all provider applications are complete, correct, and approved for the correct claiming month. Effect: The Organization received nutrition claim reimbursements from false nutrition claim reimbursement submissions. Recommendation: The Organization should implement policies and procedures to tighten controls over authorized access to the Organization’s nutrition database.

Corrective Action Plan

Child Lane management staff re-assessed program staff access to determine the changes that needed to be made in order to protect program integrity. To ensure valid DCH claims are submitted the following steps were taken:1. Employment was terminated for the staff person involved in the invalid DCH nutrition claims.2. Child Lane changed Field Representatives from working from home and provided work stations at the Administrative Office instead effective July 1, 2023. 3. A police report was filed with the Signal Hill Police Department.4. A claim was submitted with Great American under Child Lane’s employee fraud insurance policy.5. User names and passwords were reset for all staff and staff were re-trained.6. Child Lane added a Quality Assurance Specialist whose responsibility is to assist in enforcing all CACFP program policies, procedures, and guidelines. 7. Child Lane management re-assigned providers to a different Field Representative.8. Child Lane staff conducted household contact verification to approximately 150 provider enrollments out of the approximate 450 providers that were claiming at the time.9. Child Lane limited access for CACFP Field Representatives so that they are not able to make changes to provider profiles. Only the nutrition program manager is able to make changes.10. All prospective DCH providers speak to the program manager and only the program manager and one other staff person are responsible for signing new providers.11. The direct deposit procedure was updated so that DCH providers complete the electronic forms themselves directly to their individual Paycom account, complete an electronic signature and complete a two-step verification process through Paycom when changes are made. Nutrition program staff is not able to make changes to direct deposit for DCH providers.12. Downward adjustment claims were submitted through Child Lane’s CNIPS account for the invalid claims that were identified. The downward adjustments were reduced from current claim reimbursements. An email was received on November 17, 2023 by the California Department of Social Services, (CDSS) Fiscal Policy and Analysis Bureau verifying that all the associated downward adjustment claims were processed and deducted from current claim reimbursements. 13. Entries were made on Child Lane’s GL to recognize the reduction in income due to the downward adjustment claims submitted to agree with CDSS claim reimbursements for 2022-2023 Fiscal Year. The amount for previous Fiscal Years was posted to Contracts Settlements under the Management and General cost center. An entry was made as of June 30, 2023 to reduce the Family Day Care Contracts CACFP expense for the invalid claims for Fiscal Year 2022-2023 and offset to the Family Day Care Contracts expense under the Management and General cost center. Name of Contact Person Responsible for Planned Corrective Actions: Maria Almeida, Contracts & Compliance Manager Anticipated Completion Date: November 30, 2023

Categories

Cash Management School Nutrition Programs

Other Findings in this Audit

  • 581315 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program-Homes $5.46M
93.575 Child Care and Development Block Grant (general Center Child Care) $1.73M
93.575 Child Care and Development Block Grant (family Child Care Homes) $544,135
93.596 Child Care and Development Fund (general Center Child Care) $355,247
93.596 Child Care and Development Fund (family Chilc Care Homes) $263,477
10.558 Child and Adult Care Food Program-Centers $257,154
84.425R Family Child Care Homes (crrsa) $131,304
84.425R California State Preschool (crrsa) $104,573
84.425R Child and Adult Care Food Program-Homes (crrsa) $7,825
84.425R General Center Child Care (crrsa) $4,678