Finding 498512 (2023-007)

2023-007 Local Collaborative Time Study (LCTS) Reporting (Cost Schedules DHS-3220.1 and DHS-3220.2) Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2305MN5ADM, 2023 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. As part of Traverse County’s Local Collaborative Time Study (LCTS) reporting requirements for Schools (DHS-3220.1) and Corrections (DHS-3220.2), LCTS fiscal site contacts are required to verify that the information on the LCTS Fiscal and Cost Schedule is accurate and that it complies with all guidelines set forth in the LCTS Cost Schedule Instructions described in DHS Bulletin #16-32-04 – Local Collaborative Time Study (LCTS) Fiscal Operations. It also states that the County’s LCTS Fiscal Reporting and Payment Agent is required to review all cost schedules from participating agencies. Condition: No documentation was maintained to support that the two Cost Schedules DHS-3220.1 and the two Cost Schedules DHS-3220.2 tested in the sample were reviewed by the County’s LCTS Fiscal Reporting and Payment Agent. Questioned Costs: None Context: The Cost Schedules DHS-3220 are submitted quarterly by each member of a collaborative to DHS for reimbursement of LCTS money, which is reimbursed to the County with federal Medical Assistance Program funds. The Traverse County Social Services Department acts as the LCTS Fiscal Reporting and Payment Agent for the local collaborative in Traverse County. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Lack of a review process increases the risk that reports reports will not be submitted as required or accurate. Cause: Staff from the County’s Social Services Department indicated they were not aware of the review requirements for the quarterly reports. Recommendation: We recommend the County implement procedures to ensure the cost schedules are reviewed and evidence of the review is retained. View of Responsible Official: Acknowledge