SCOTT COUNTY

Medicaid Eligibility Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medicaid Assistance Listing Number: 93.778 Federal Award Identification Number and Year: 2505MN5ADM - 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified; and (v) Take reasonable cybersecurity and other measures to safeguard information including protected personally identifiable information (PII) and other types of information. This also includes information the Federal agency or pass-through entity designates as sensitive or other information the recipient or subrecipient considers sensitive and is consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. Condition: The County’s control over Medicaid eligibility casefile reviews requires supervisors to identify errors and ensure corrections are made. However, in instances where casefile reviews identified required corrections, documentation was not maintained to support that follow-up procedures were performed and that the corrections were completed. Questioned costs: None Context: During testing, four of forty casefiles lacked documentation demonstrating that supervisory follow-up was performed to verify that identified corrections were completed. Cause: The County has had significant turnover and new staff over the past few years as well as increases in caseloads. There was also changing guidance as waivers from the pandemic expired. All of this provided more opportunities for errors to occur. Effect: Improper input or updating of information in MAXIS and lack of verification or follow-up of eligibility determining factors increase the risk that a program participant will receive benefits when they are not eligible. Repeat Finding: No. Recommendation: We recommend the County strengthen its supervisory review control over Medicaid eligibility casefile reviews by implementing procedures to ensure that identified errors or required corrections are documented, followed up on, and verified as completed in a timely manner. Views of responsible officials: Management does not disagree with the finding.

2024 – 002: Suspension and Debarment: Federal Agency: U.S. Department of Treasury, Federal Program Name: COVID-19 State and Local Fiscal Recovery Funds, Assistance Listing Number: 21.027, Federal Award Identification Number and Year: SLRFP0410 – 2024, Award Period: January 1, 2024 – December 31, 2024, Type of Finding: Significant Deficiency in Internal Control over Compliance; Other Matter Criteria or specific requirement: 2 CFR § 180.300 requires that before the County enters into a covered transaction with an entity at a lower tier, the County 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. 2 CFR 200.303 requires that the entity have sufficient controls over compliance related to federal awards. Condition: During our testing, we noted an instance where there was no documentation of this verification being performed. Questioned costs: None Context: During our testing, it was noted that one of six contracts that were tested were entered into without the County verifying and retaining documentation of said verification that the vendor was not suspended or debarred by the federal government. Cause: The County was unaware this type of contract met the criteria applicable for suspension and debarment. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, 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 ensure that this suspension and debarment verification occurs before entering covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: Management does not disagree with the finding.

Federal agency: U.S. Department of Health and Human Services Federal program name: Foster Care Title IV-E Assistance Listing Number: 93.658 Federal Award Identification Number and Year: 2301MNFOST, 2023 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2301MNFOST Award Period: Fiscal year 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of casefile review, we identified one participant that did not have appropriate action taken to resolve issues noted during the initial stage of review. Questioned Costs: Unknown Context: The reviewer of the casefile was informed that correction action was taken and in the following quarter there was no exception reported for this same issue. Cause: Controls were insufficient to ensure this process occurred. Effect: The County has a review process to catch errors in casefiles, however, if the County does not remedy errors fully, there can still be compliance issues outstanding after review. Repeat Finding: No Recommendation: We recommend the County reviews its procedures to ensure all casefile reviews are documented and all issues in the casefiles are followed up on and remedied properly. Views of responsible officials: There is no disagreement with the finding.

Federal agency: U.S. Department of Health and Human Services Federal program name: Foster Care Title IV-E Assistance Listing Number: 93.658 Federal Award Identification Number and Year: 2301MNFOST, 2023 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2301MNFOST Award Period: Fiscal year 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of casefile review, we identified one participant that did not have appropriate action taken to resolve issues noted during the initial stage of review. Questioned Costs: Unknown Context: The reviewer of the casefile was informed that correction action was taken and in the following quarter there was no exception reported for this same issue. Cause: Controls were insufficient to ensure this process occurred. Effect: The County has a review process to catch errors in casefiles, however, if the County does not remedy errors fully, there can still be compliance issues outstanding after review. Repeat Finding: No Recommendation: We recommend the County reviews its procedures to ensure all casefile reviews are documented and all issues in the casefiles are followed up on and remedied properly. Views of responsible officials: There is no disagreement with the finding.

Federal agency: U.S. Department of Health and Human Services Federal program name: Foster Care Title IV-E Assistance Listing Number: 93.658 Federal Award Identification Number and Year: 2301MNFOST, 2023 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2301MNFOST Award Period: Fiscal year 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of random moment studies, we identified three individuals reported on the first quarter time study report that were terminated or resigned prior to the start of the first quarter. Questioned Costs: Unknown Context: Out of the individuals selected for time study testing, it was noted that three individuals were incorrectly included on the random moment study roster that was submitted to the State for the first quarter. Cause: Controls were insufficient to ensure the County only reported active employees to the State on their random moment study roster. 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. Repeat Finding: Yes - 2022-003 Recommendation: We recommend the County reviews its procedures for giving timely notice of an individual’s termination or resignation to other departments as well as ensuring departments are reviewing the information provided to granting agencies. Views of responsible officials: There is no disagreement with the finding.

Federal agency: U.S. Department of Health and Human Services Federal program name: Foster Care Title IV-E Assistance Listing Number: 93.658 Federal Award Identification Number and Year: 2301MNFOST, 2023 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2301MNFOST Award Period: Fiscal year 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity’s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of random moment studies, we identified three individuals reported on the first quarter time study report that were terminated or resigned prior to the start of the first quarter. Questioned Costs: Unknown Context: Out of the individuals selected for time study testing, it was noted that three individuals were incorrectly included on the random moment study roster that was submitted to the State for the first quarter. Cause: Controls were insufficient to ensure the County only reported active employees to the State on their random moment study roster. 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. Repeat Finding: Yes - 2022-003 Recommendation: We recommend the County reviews its procedures for giving timely notice of an individual’s termination or resignation to other departments as well as ensuring departments are reviewing the information provided to granting agencies. Views of responsible officials: There is no disagreement with the finding.

Finding 2022-001 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: 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2205MN5ADM Award Period: Fiscal year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity?s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of random moment studies, we identified three individuals reported on the fourth quarter time study report that terminated prior to the start of the fourth quarter. Questioned Costs: Unknown Context: Out of the individuals selected for time study testing, it was noted that three individuals were incorrectly included on the random moment study roster that was submitted to the State for the fourth quarter. Cause: Controls were insufficient to ensure the County only reported active employees to the State on their random moment roster. Effect: The County reported employees previously terminated to the State of Minnesota which were subject to the random moment surveys The State Department of Health and Human Services conducts. Repeat Finding: No Recommendation: We recommend the County reviews its procedures for giving timely notice of an individual?s termination to other departments as well as ensuring departments are reviewing the information provided to granting agencies. Views of responsible officials: There is no disagreement with the finding.

Finding 2022-002 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: 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2205MN5ADM Award Period: Fiscal year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity?s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of allowable costs over payroll related to the County?s cost allocation plan we noted one of our selections did not have approval for their timesheet. Questioned Costs: None Context: The County?s cost allocation plan utilized the County?s expenditures and operations for the calendar year ending December 31, 2020. For one of the 32 timesheets selected for testing as part of the County?s cost allocation plan, the County was not able to provide support for a supervisor review. Cause: The timesheet was missed due to the timing of leaving offices at the start of the COVID-19 pandemic. Effect: The County was not in compliance with time and effort documentation requirements of the Uniform Guidance. Repeat Finding: No Recommendation: We recommend the County puts in place the proper procedures to document all approvals of timesheets coded to the grant. Views of responsible officials: There is no disagreement with the finding.

Finding 2022-003 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: 2205MN5ADM, 2022 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Number: 2205MN5ADM Award Period: Fiscal year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: A nonfederal entity must: (i) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (ii) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award; (iii) Evaluate and monitor the non-Federal entity?s compliance with statutes, regulations, and the terms and conditions of Federal awards; (iv) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (v) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility of confidentiality. Condition: During our testing of casefile review, we identified one casefile that had no documentation of the review. Questioned Costs: None Context: It was noted for one of forty case files selected for testing, there was no documentation of a review being performed. Cause: The County?s lead worker in-charge of reviews separated from the County during the year and County staff was not able to locate where the casefile review form was stored on the County?s network. Effect: The County was not in compliance with internal control over eligibility requirements of the Uniform Guidance. Repeat Finding: No Recommendation: We recommend the County reviews its procedures to ensure all casefile reviews are documented. Views of responsible officials: There is no disagreement with the finding.

Finding Number: 2019-001 Prior Year Finding Number: 2017-003 Repeat Finding Since: 2017 Procurement ? Uniform Guidance Written Policies and Procedures Programs: U.S. Department of Transportation, Highway Planning and Construction (CFDA No. 20.205), Award Nos. 1030070 and 1033264, 2018 and 2019 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations ? 200.318 states that the non-federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform with applicable federal law and the standards identified in this regulation. Condition: The County has documented a broad procurement policy that states, ?Staff shall follow all Federal and State Procurement Laws and County procurement processes and requirements as defined in the Procurement and Contract Guidelines?.? The County?s Procurement and Contract Guidelines document its procurement procedures that reflect applicable state laws. Some of these procedures also provide enough guidance that certain procurements, generally of large amounts, made in accordance with them may conform with applicable federal law. Beyond this, the County has asserted that its reference to federal law is adequate, and it will be up to individual staff to find and apply the most current federal procurement guidance. Examples of items not addressed in the County?s documented procurement procedures include: ? identification of the documentation the County deems to be sufficient and maintained to detail the history of the procurement; ? identification of all the acceptable procurement methods (i.e.: micro-purchase and small purchase), the criteria applicable to them, and the documentation the County deems to be sufficient and maintained to support meeting the requirements associated with each of them; and ? reference to the Davis-Bacon Act, its requirements, and what the County deems to be sufficient and maintained to support compliance with the requirements. Questioned Costs: None. Context: This issue was discovered during the audit of the Highway Planning and Construction program; however, it impacts federal programs entity-wide. Written policies and procedures that reflect the specific components of federal regulations improve controls to help ensure compliance with federal award requirements. Effect: Written policies and procedures that do not reflect specific Uniform Guidance procurement requirements could increase the risk of noncompliance with federal program requirements. Cause: The County interpreted that the specific components of federal regulations in the Uniform Guidance did not need to be included in its own documented policies and procedures. Recommendation: We recommend the County develop and implement written policies and procedures that can be consistently applied by all staff which, when followed, ensures compliance with Uniform Guidance procurement requirements. In addition, this should identify the documentation the County expects staff to maintain to be sufficient to support compliance. View of Responsible Official: Acknowledged

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