Finding 959188 (2023-001)

Criteria: Uniform Guidance 2 CFR § 200.303 requires the non-Federal entity to “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.” Reasonable assurance includes the County documenting a key control was implemented. Condition: The main internal control over the LIHEAP programs are supervisory review of income verification and eligibility determination and documentation. There was no documentation of second party reviews for the LIHEAP programs. In addition, the staffing levels for this program is low related to the number of clients being served. Questioned Costs: No questioned costs. Context: The LIEAP Programs typically consist of a high volume of applications in a short period of time (approximately 3 months) with a required application turnaround period (2 to 10 business days for each application). Since the program is performed under Adult Services, these County staff were not familiar with NCFAST. Applications within the LIHEAP programs require the use of NCFAST for online verification, documentation, application entry, and eligibility determination. Due to these factors, supervisory review is critical. There are time pressures on the supervisory level due to high volume and short time period and limited staffing level. Although the Adult Services Supervisor currently performs random second party reviews of workers’ eligibility determinations, it was not documented. Surry County processed 2,260 applications during fiscal year end June 30, 2023. We tested 40 applications and determined that there were 2 applications that were approved without proper income verification and 6 applications with technical errors that did not affect eligibility. This indicates concerns that there could be pervasive errors in determining eligibility. Cause: The County does not have a formal documented review process for this program. Review documentation was not retained. Effect: We were unable to verify whether the second party review process was functioning as designed. Identification of repeat finding: This is a repeat finding. Recommendation: We recommend the implementation of a formal and documented review process to include an appropriate number of reviews given the volume of applications processed for given time period as appropriate. Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 15.