Finding 571655 (2024-004)

Federal Agency: U.S. Department of Agriculture; U.S. Department of Health and Human Services Federal Program Name: Supplemental Nutrition Assistance Program (SNAP), Medical Assistance Program; Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 10.561; 93.778; 93.558 Federal Award Identification Number and Year: 212MN101S251; 212MN101S2520; 212MN127Q7503 – 2024; 2005MN5ADM; 2105MN5ADM; 2105MN5MAP; NH23IP922628 – 2024; 2101MNTANF – 2024 Pass-Through Agency: Minnesota Department of Human Services Award Period: January 1, 2024 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: During our testing of 3,588 and 3,606 random moment study participants reported in quarters two and three, respectively, one individual was reported on the second quarter time study report and five individuals were reported on the third quarter report that were terminated or resigned prior to the start of the respective quarter. Questioned costs: None Context: It was noted that for both of the two random moment study submissions tested as part of a statistically valid sample, six individuals were incorrectly included on the random moment study roster that was submitted to the State for the respective quarters. Cause: At the time of the audit, the County was changing its procedures for updating the random moments listing for the State of Minnesota. Effect: The County reported employees previously terminated or resigned to the State of Minnesota which were subject to the random moment surveys the State Department of Health and Human Services conducts.