MINNESOTA PRAIRIE COUNTY ALLIANCE

Finding Number: 2019-001 Prior Year Finding Number: 2018-001 Repeated Finding Since: 2018 Eligibility Program: U.S. Department of Health and Human Services? Medical Assistance Program (CFDA No. 93.778), Award No. 1905MN5ADM, 2019 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. Condition: The Minnesota Department of Human Services (DHS) maintains the computer systems, MAXIS and METS, which are used by MNPrairie to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available to support participant eligibility in MAXIS. In other circumstances, information was not input correctly into MAXIS. The following instances were noted in the sample of 25 MAXIS case files tested: ? One instance in which there was no documentation to support the value of an asset entered in MAXIS. ? Two instances of asset information incorrectly input into MAXIS. Questioned Costs: Not applicable. MNPrairie administers the program, but benefits to participants in this program are paid by the State of Minnesota. Context: Pursuant to Minnesota statutes, MNPrairie performs any ?intake function? needed for this program, while the state maintains MAXIS and METS, which support the eligibility determination process and actually pay the benefits to the participants. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of updated information in MAXIS and documented verification of key eligibility-determining factors increases the risk that a program participant will receive benefits when they are not eligible; no ineligible participants were noted during testing. Cause: Program personnel entering case information into MAXIS did not ensure all required information was input in MAXIS correctly or that all required information was obtained and/or retained. Recommendation: We recommend MNPrairie implement additional review procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists and is properly input in MAXIS and maintained in case files, and that issues are followed up in a timely manner. View of Responsible Official: Acknowledged

Finding Number: 2019-002 Prior Year Finding Number: N/A Repeated Finding Since: N/A Payroll Allocation Program: U.S. Department of Health and Human Services? Medical Assistance Program (CFDA No. 93.778), Award No. 1905MN5ADM, 2019; and Temporary Assistance for Needy Families Program (CFDA No. 93.558), Award No. 1901MNTANF, 2019 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.303 requires that the auditee establish and maintain effective internal control over federal awards to provide reasonable assurance that awards are managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For federal awards received through DHS, this would include providing reasonable assurance that program costs are reported to DHS accurately, in accordance with DHS? published reporting instructions. Condition: A portion of payroll costs for office support staff was allocated between the Income Maintenance and Social Services programs based on an estimate of time spent rather than the number of employees being supported in each area, as required by DHS instructions. Questioned Costs: None. Context: Federal funds are received for a portion of administrative costs associated with MNPrairie?s Income Maintenance programs (including the Temporary Assistance for Needy Families [TANF] and Medical Assistance Programs), which are reported to DHS through the Income Maintenance Quarterly Expense Report (DHS-2550). Federal funds are also received for a portion of administrative costs associated with MNPrairie?s Social Services programs (including the Medical Assistance Program), which are reported to DHS through the Social Services Quarterly Fund Report (DHS-2556). Beginning in the second quarter of 2019, payroll costs for office support staff were allocated between the two reports at rates of 91 percent to Income Maintenance and 9 percent to Social Services, while the allocation based on employees in each area should have been 40 percent to Income Maintenance and 60 percent to Social Services. Effect: During the year, approximately $230,000 in payroll costs were reported on the DHS-2550 that should have been reported on the DHS-2556. Because federal funding is allocated to different programs and at different rates for each report, it is likely that the federal funds received related to these costs were inaccurate given the approved allocation method. The estimated result of the incorrect payroll allocation was MNPrairie receiving more federal revenue by an estimated $8,126 in TANF funds and $58,423 in Medical Assistance Program funds. Cause: Management indicated that they did not believe the rates calculated using the approved method accurately reflected the work being performed between the two areas. The allocation rates used for the last three quarters of 2019 were based on an estimate of the employees? time spent on each program. Recommendation: We recommend that the DHS-2550 and DHS-2556 Reports be completed in accordance with DHS instructions. Any reports that have been submitted with costs allocated by an unapproved method should be corrected and resubmitted. View of Responsible Official: Acknowledged