Finding 49754 (2022-002)

2022-002 Eligibility Federal Agency: U.S. Department of Agriculture (USDA) Program: WIC Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (ALN 10.557) Pass-through Entity: State of Minnesota, Department of Health Federal Assistance Identification Number or Pass-Through Number: 202MN004W1003, 192MN004W5003 Federal Award Year: Year ended December 31, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) requires that each non-Federal entity must "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." The County is responsible for the verification of an applicant?s categorical eligibility, identity, and residency as well as the performance of assessments of an applicant?s nutritional risk. In addition, the County is also responsible for the input of this information as well as income and family size into HuBERT, the State?s WIC Information System. Condition: While testing the eligibility requirement, we noted procedures and controls were not operating as designed to ensure that only those eligible were approved for WIC. In our sample of 40 cases, two cases had no evidence that an independent review of the eligibility determination occurred. In addition, while we were able to test manual compensating controls over eligibility determination, we were not able to review and test the automated application controls and the related information technology general controls (ITGCs) within the HuBERT system, a state system that is administered by the state and required to be used by the County for eligibility determination, to determine whether controls are adequately designed and implemented and operating effectively. Cause: The County lacks a workflow for the eligibility determination of the WIC program, including the completion of an independent review. The County currently utilizes Microsoft Teams for the caseworker to make a request for a Competent Professional Authority (CPA) to review a case after an eligibility determination is made. The caseworker is responsible for ensuring the review has occurred, but the only method of monitoring is reopening each case file for verification. In addition, the State was not able to provide information regarding the design and effectiveness of HuBERT system controls nor were we able to test those controls directly due to complexities of data privacy and resources within the State. Effect: Although not found during our testing, benefits disbursed to participants in the program and issued by the State of Minnesota may have paid for ineligible participants. Context: Out of the universe of cases eligible for assistance we noted that two out of our sample of 40 met eligibility requirements but had no evidence of an independent review of the eligibility determination. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Questioned Costs: None Repeat Finding?: No Recommendation: We recommend that the process for documenting the review of eligibility determinations be strengthened. In addition, we suggest that the County encourage the State to provide an independent audit of the design and implementation of HuBERT system controls. View of responsible officials of the auditee: Hennepin County has reviewed and agrees with the finding and recommendation.