Meeker CountyLocal Government

2024-004: ALLOWABLE COSTS Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2405MN5MAP and 2405MN5ADM, 2024 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2405MN5MAP and 2405MN5ADM Award Period: Year Ended December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: Standard internal control and compliance procedures require that the quarterly random moment study listings reported to the MN Department of Human Services be accurate for reimbursement of allowable costs and activities relating to the 2556 Social Services quarterly reports. Condition: During testing, it was noted the County did not have adequate procedures designed to ensure the 2556 Social Services quarterly listings were submitted accurately. Questioned Costs: None noted. Context: During testing, it was noted that two of two quarters tested for the 2556 Social Service listings had employees that were not accurately being reported. Additionally, one employee left the County in May 2024 and was incorrectly included in the third quarter 2556 Social Service listing. Cause: Turnover within the department. Effect: The County could receive an incorrect federal funding allocation on incorrect employee information provided to the state for reimbursement. Repeat Finding: No. Recommendation: We recommend the County review the listing of employees working on certain programs on a periodic basis throughout the year and document the review. Views of responsible officials: There is no disagreement with the audit finding.

2024-005: ELIGIBILITY Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2405MN5MAP and 2405MN5ADM, 2024 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2405MN5MAP and 2405MN5ADM Award Period: Year Ended December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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: No internal casefile reviews were performed for quarter 1 through 3 during 2024. Questioned Costs: None noted. Context: During eligibility testing, it was noted that casefile review was not performed for quarters 1 through 3 during 2024. Cause: Turnover within the department. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: Yes – 2023-005. Recommendation: We recommend the County implement additional procedures to ensure case file reviews are being performed on a regular basis. Views of responsible officials: There is no disagreement with the audit finding.

2024-006: SUSPENSION AND DEBARMENT Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1480, 2024 Award Period: Year Ended December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Federal guidelines require grant recipients to perform verification procedures that a vendor is not federally suspended or debarred prior to entering into a covered transaction. Condition: The County did not retain documentation to support that vendors were not suspended or debarred. Questioned Costs: None. The vendor was not federally suspended or debarred. Context: During suspension and debarment testing, one of the six covered transactions we tested did not have a verification that the vendor was not federally suspended or debarred until after having a signed contract Cause: The County did not follow their policy regarding suspension and debarment. Effect: By entering into a contract with a vendor prior to verifying they are not federally suspended or debarred, it is possible that the County could have entered into a contract with a suspended vendor. Repeat Finding: No. Recommendation: We recommend the County implement additional procedures to ensure suspension and debarment verification procedures are followed prior to entering into a contract. Views of responsible officials: There is no disagreement with the audit finding.

REPORTING Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5MAP and 2305MN5ADM, 2023 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2305MN5MAP and 2305MN5ADM Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee mush 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. The DHS-2550 cost report is used by the Minnesota Department of Human Services (DHS) in conjunction with the county’s Income Maintenance Random Moment Time Study (IMRMS) data to determine allowable costs for reimbursement by various federal programs. Expenditures and revenue must have been disbursed or received during the quarter being reported. Condition and Context: The fourth quarter DHS-2250 cost report did not reflect fourth quarter expenditures and was not formally reviewed and approved. Questioned Costs: None Cause: Turnover within the department. Effect: The County could receive incorrect federal funding for the program if expenditures are not reviewed and reported timely. Repeat Finding: No. Recommendation: We recommend the County design procedures and controls to ensure all reports are formally reviewed and represent actual expenditures incurred during the period being reported. Views of responsible officials: There is no disagreement with the audit finding.

ELIGIBILITY Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2305MN5MAP and 2305MN5ADM, 2023 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2305MN5MAP and 2305MN5ADM Award Period: Year Ended December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 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 and Context During eligibility testing, it was noted that casefile review was not performed for quarters one and two. Questioned Costs: Not applicable. The County administers the program, but benefits to participants are paid by the State of Minnesota. Cause: Lack of supervisory review of case files. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005. Recommendation: We recommend the County implement additional procedures to ensure case file reviews are being performed on a regular basis. Views of responsible officials: There is no disagreement with the audit finding.

SUSPENSION AND DEBARMENT Federal Agency: U.S. Department of Treasury Federal Program Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1480, 2022 Compliance Requirement Affected: Procurement, Suspension and Debarment Award Period: Year Ended December 31, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee mush 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 and Context: During our testing, it was noted that the County did not perform procedures to ensure vendors were not suspended or debarred for 1 of 3 procurement transactions tested. Questioned Costs: None Cause: Misunderstanding of the federal suspension and debarment provisions. Effect: The auditor noted no instances of noncompliance with the provisions of suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend the County design procedures and controls to ensure compliance with suspension and debarment provisions. Views of responsible officials: There is no disagreement with the audit.

ELIGIBILITY Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2205MN5MAP and 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services and Meeker-McLeod-Sibley Community Health Services Pass-Through Number: 2205MN5MAP and 2205MN5ADM Award Period: Year Ended December 31, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: Section 1940 of the Social Security Act (42 USC 1396w) requires the County to have a mechanism in place to verify assets, through access to information held by financial institutions, for purposes of determining or renewing Medicaid eligibility when an asset test is applicable for aged, blind, and disabled Medicaid applicants or beneficiaries. Title 2 U.S. Code of Federal Regulations ? 200.303 states that the auditee mush 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 and Context During eligibility testing, it was noted that 1 of 40 casefiles tested had a discrepancy between the County Maxis system and the supporting documentation received from the applicant. No casefile review was performed. Questioned Costs: Not applicable. The County administers the program, but benefits to participants are paid by the State of Minnesota. Cause: Error in inputting the information and lack of supervisory review of case files. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: No. Recommendation: We recommend the County implement additional procedures to provide reasonable assurance that necessary documentation is properly input in MAXIS. Case file reviews should be performed. Views of responsible officials: There is no disagreement with the audit.

Finding Number: 2020-003 Prior Year Finding Number: N/A Repeat Finding Since: N/A Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Program: U.S. Department of the Treasury?s COVID-19 ? Coronavirus Relief Fund (CFDA No. 21.019), SLT0016, 2020 Pass-Through Agency: Minnesota Management and Budget 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. Section 5001(d) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided the eligible purposes for which COVID-19 ? Coronavirus Relief Fund payments may be used. Payments must have been used to cover costs that were necessary expenditures incurred due to the public health emergency, not accounted for in the County?s budget approved as of March 27, 2020, and incurred during the covered period. The State of Minnesota provided requirement, as the pass-through entity, that the covered period for Minnesota counties began on March 1, 2020, and ended on December 1, 2020 (period of performance). Condition: The County reported departmental payroll costs for the Coronavirus Relief Fund (CRF) program which included payroll amounts for each employee multiplied by the percentage of time spent on CRF activities. The payroll costs used for the Building Maintenance Department were not supported and did not match actual payroll costs. Questioned Costs: $28,794 relating to actual payroll costs multiplied by the percentage of time spent on CRF activities for employees. Context: The County identified total CRF grant expenditures which exceeded the total CRF grant award of $3,113,306. If grant expenditures were reduced by known and likely questioned costs, they would continue to exceed the total grant award. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County identified expenditures as relating to the CRF program which are not in compliance with the activities allowed or unallowed, allowable costs/cost principles, and period of performance requirements. Cause: Staff turnover contributed to Meeker County not maintaining support for the payroll amount requested. Recommendation: We recommend the County implement procedures to follow the guidance related to the CRF, claim the actual costs incurred, and maintain documentation to support the amounts claimed. View of Responsible Official: Concur

Finding Number: 2019-003 Prior Year Finding Number: 2018-001 Repeat Finding Since: 2018 Procurement, Suspension, and Debarment Program: U.S. Department of Agriculture?s State Administrative Matching Grants for the Supplemental Nutrition Assistance Program (CFDA No. 10.561), Award No. 192MN101S2514, 2019 Pass-Through Agency: Minnesota Department of Human Services Criteria: Federal regulations provided in Title 2 U.S. Code of Federal Regulations ? 200.318(i) state that the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Non-federal entities must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations ? 200.319; and verifying debarment, suspension, and exclusions as provided in Title 2 U.S. Code of Federal Regulations ?? 180.300, 200.213, and 200.318(h). Condition: In a sample of two procurement transactions tested over $10,000, for one of the items tested, the County had no documentation to meet the verification requirements whether the vendor was debarred, suspended, or whether other exclusions existed. Questioned Costs: None. Context: The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with federal grant requirements. Cause: The County was conducting checks for suspension, debarment and other exclusions on a quarterly basis, with no documentation maintained. No check was done prior to entering into the contract with the vendor, in accordance with the County?s policy. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County and this documentation be completed prior to entering into a contract. View of Responsible Official: Concur

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