Minnesota Prairie County Alliance

ELIGIBILITY DETERMINATION Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants to States for Medicaid (Medicaid Cluster) Assistance Listing Number: 93.778 Pass-Through Agency: Minnesota Department of Human Services Federal Award Identification and Pass-Through Numbers: 2505MN5ADM and 2505MN5MAP Award Period: Year Ended December 31, 2025 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Uniform Guidance requires the Agency to ensure compliance over eligibility by having the proper documentation of income, citizenship, redeterminations, and social security numbers. Condition: During our testing of compliance over eligibility, it was noted the Agency did not have adequate procedures designed to ensure the verifications required were properly obtained. Context: During testing, it was noted that 3 of 60 Medical Assistance case files tested did not have proper documentation to support citizenship verification, 1 of 60 case files did not have proper documentation to support the basis of eligibility, and 1 of 60 case files did not have proper documentation for asset and income verification and a completed application. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Questioned Costs: None noted. Cause: There has been a significant increase in case loads, as well as changing guidance due to waivers expiring. Effect: Errors made in determining eligibility may not be discovered and benefits may be issued to clients who are not eligible. Repeat Finding: Yes – 2024-001. Recommendation: We recommend the Agency implement procedures to ensure that asset and income documentation in the casefiles be retained and that it matches the information input into the METS eligibility system. Views of responsible officials: There is no disagreement with the audit finding. There is an effort to maintain a strong healthcare processing leadership team. In addition, training will be provided to health and human services staff regarding proper documentation and entry into METS and staff will be reminded to perform reviews.

CASE FILE REVIEWS Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants to States for Medicaid (Medicaid Cluster) Assistance Listing Number: 93.778 Pass-Through Agency: Minnesota Department of Human Services Federal Award Identification and Pass-Through Numbers: 2505MN5ADM and 2505MN5MAP Award Period: Year Ended December 31, 2025 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Federal guidelines require grant recipients to implement internal controls for each direct and material compliance requirement applicable to the federal grant to ensure compliance with said requirements. Condition: During testing of controls over Eligibility, it was noted that the Agency does not have adequate procedures designed to ensure proper controls over eligibility requirements. Context: During testing of controls over Eligibility (i.e., casefile reviews), it was noted that casefiles were only reviewed during the first part of the year. The quantity reviewed is insufficient sample sizes for the number of clients the Agency handles. The sample sizes were based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Questioned Costs: None noted. Cause: Lack of staffing during the second half of the year did not allow for reviews to take place. Effect: The Agency may be incorrectly concluding that an applicant is eligible for the federal programs they are applying for. Repeat Finding: No. Recommendation: We recommend the Agency perform case file reviews on a more representative sample of the total clients served and that adequate supporting documentation be retained of those reviews. Views of responsible officials: There is no disagreement with the audit finding. Additional documentation and specific casefile reviews will be implemented

2024-001 Eligibility Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 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. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ Social Security number verification and income limits. Minnesota Statutes, section 256B.05, requires agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, METS, which is used by MNPrairie to support the eligibility determination process. In the case files tested for eligibility, not all documentation to support participant eligibility was available, updated, or input correctly. The following exceptions were noted in the sample of 40 case files tested: • One participant’s Social Security number was not verified. • Two case files did not calculate or document the participant’s income correctly. Questioned Costs: Not applicable. MNPrairie administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and MNPrairie split the eligibility determination process. Generally, MNPrairie resolves eligibility issues when prompted by the system, while the State performs the initial review of the case files, including determining the information in METS is verified. Participants receive benefits from the State. The population consisted of 16,951 active METS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The improper input or updating of information in METS and lack of verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel responsible for resolving eligibility issues in METS did not ensure all required information was input or updated correctly or verified. Recommendation: We recommend MNPrairie implement additional procedures to provide reasonable assurance that all documentation needed to resolve eligibility issues exists and program personnel properly input, update, or verify the documentation in METS. In addition, MNPrairie should consider providing further training to program personnel. View of Responsible Official: Acknowledge

2024-002 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 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. Administrative program costs for the Medical Assistance Program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Social Services Fund (DHS 2556) report on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: In the sample of two DHS-2556 reports, misclassifications of expenditures were found between the SSTS RMS Participants Payroll Expense (Line 2a) and Non SSTS RMS Participants Payroll Expense (Line 2b) report categories. In one instance, there was a net misclassification of $44,047 between reported Line 2a and Line 2b expenditures. In the other, there was a net misclassification of $10,444 between reported Line 2a and Line 2b expenditures. Questioned Costs: None. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to MNPrairie are allowable and provide detailed information necessary for maintaining proper oversight over federal programs. The identified misclassifications had no effect on the total expenses claimed for federal funding and, therefore, had no effect on federal funding received. The population consisted of four quarterly DHS 2556 reports; the sample was two quarterly DHS 2556 reports. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the reporting of costs in the quarterly reports can impair DHS’ ability to provide required oversight over federal programs. Cause: MNPrairie’s controls over preparation of the quarterly reports were not sufficient to identify the reporting errors. Recommendation: We recommend MNPrairie implement controls to ensure all DHS reports are completed accurately and in accordance with DHS guidance. View of Responsible Official: Acknowledge

2023-001 Eligibility Prior Year Finding Number: 2022-003 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 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. Title 42 U.S. Code of Federal Regulations § 602(a)(1)(B)(iii) requires each state to create a written document that sets forth the objective criteria for the delivery of benefits and the determination of eligibility. The Minnesota Department of Human Services’ State Plan for Temporary Assistance for Needy Families (TANF) and Minn. Stat. § 256J.10 establish the general eligibility requirements for TANF benefits. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: • two case files where the asset amounts listed were not supported by documentation on file. • one case file where the income amount in MAXIS was input incorrectly and did not agree to the supporting documentation on file. • one case file where the application completed by the participant was incomplete. Questioned Costs: None. Context: The State of Minnesota and MNPrairie split the eligibility determination process. Pursuant to Minnesota statutes, MNPrairie performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. 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 documenting verification of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly, supported, and obtained or retained. Recommendation: We recommend MNPrairie implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, the information is properly input or updated in MAXIS, and issues are followed up on in a timely manner. In addition, consideration should be given to providing further training to program personnel. View of Responsible Official: Acknowledge.

2023-002 Child Support Non-Cooperation Prior Year Finding Number: 2022-004 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2301MNTANF; 2023 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. Title 45 U.S. Code of Federal Regulations § 264.30 states: “What procedures exist to ensure cooperation with the child support enforcement requirements? (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. (b) If the IV-D agency determines that an individual is not cooperating, and the individual does not qualify for a good cause or other exception established by the State agency responsible for making good cause determinations in accordance with section 454(29) of the Act or for a good cause domestic violence waiver granted in accordance with § 260.52 of this chapter, then the IV-D agency must notify the IV-A agency promptly. (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program." Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. Part of the eligibility determination process is cooperating with child support requirements. MNPrairie must reduce benefits when a case is in child support non-cooperation status. In a sample of 15 case files reviewed, two case files had identified errors related to improper timing of reduced benefits for case files in non-cooperation status. The sanctions that are imposed on casefiles are not reviewed by someone after they are entered into the system. Questioned Costs: None. Context: Child support non-cooperation is determined by MNPrairie, and the Providing Resources to Improve Support in Minnesota (PRISM) system maintains the information and recipient status. When a Child Support Officer at MNPrairie updates PRISM to show non-cooperation, it interfaces with MAXIS. From this interface, MAXIS receives a Worker’s Daily Report (DAIL) message which notifies the entity of child support non-cooperation. MNPrairie is responsible for updating the recipient’s record in MAXIS, including entering child support sanctions, or closing a case on the seventh occurrence of noncompliance. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Noncompliance with Title 45 U.S. Code of Federal Regulations § 264.30. Benefit overpayments could be paid when child support non-cooperation is not properly processed for a benefit month. Cause: Program personnel entering case data into MAXIS reported the participant was homeless, which does not prevent sanctions of benefits. Recommendation: We recommend MNPrairie implement procedures to ensure child support non-cooperation casefiles benefits are being reduced as necessary in MAXIS. View of Responsible Official: Acknowledge.

2023-003 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Enforcement Award Number and Year: 2301MNCSES and 2301MNCEST; 2023 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. Administrative program costs for Child Support Enforcement program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions. Payroll for certain staff is required to be allocated between the 2550 report and the DHS-2556 report. Effective internal control includes documentation of approval for claims. Condition: The following deviations were noted in a sample of 40 expenditures tested: • two claims did not have documentation to support the supervisor’s approval, and • four employees’ timesheets for office support staff were not allocated correctly between income maintenance and social services and therefore the payroll expenditures included on the DHS quarterly reports were not accurate. Questioned Costs: Questioned costs identified were less than $25,000. Context: The documentation of the approval of the claims could not be provided for review. DHS relies on accurate submission of program costs to ensure that resulting grant funds paid to MNPrairie are for applicable federal program activities/costs. For sampled items, the sample size was based on the guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Unapproved claims could result in unallowable costs being included in the DHS quarterly reports. In addition, approximately $63,000 in payroll expenditures were reported on the DHS-2550 report which should have been reported on the DHS Social Service DHS-2556 report. The federal funding is allocated differently and at different rates for each report; it is likely the federal funds received related to these costs were inaccurate. Cause: MNPrairie indicated the two claims were reviewed but the documentation to support this review and approval for payment was overlooked by staff completing the procedure. In addition, MNPrairie noted the office support staff employees did not have the correct payroll allocations in the payroll system in error. Recommendation: We recommend MNPrairie maintain documentation to support the review and approval of all claims to ensure costs are allowable to be reported on the DHS-2550 report. In addition, we recommend the DHS-2550 report be completed in accordance with DHS instructions and any reports submitted with costs allocated incorrectly should be corrected and resubmitted. View of Responsible Official: Acknowledge.

2022-001 Procurement Policy Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Agriculture Program: 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Award Number and Year: 222MN101S2514; 2022 Pass-Through Agency: Minnesota Department of Human Services 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: MNPrairie?s written procurement policies do not have all the required components of a procurement policy in accordance with Title 2 U.S. Code of Federal Regulations ? 200.318. Questioned Costs: None. Context: This issue was discovered during the audit of the major federal program; however, it impacts federal programs entity-wide. Written policies that reflect the specific components of federal regulations improve controls to ensure compliance with federal award requirements. Effect: Written policies and procedures that are not updated to reflect the Uniform Guidance procurement requirements could increase the risk of noncompliance with federal program requirements. Cause: MNPrairie management indicated they were not able to complete an update to the policy in 2022, but it is an ongoing project. Recommendation: We recommend MNPrairie implement and adhere to written procurement policies addressing the specific components of the Uniform Guidance requirements. View of Responsible Official: Acknowledge.

2022-002 Procurement Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Agriculture Program: 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Award Number and Year: 222MN101S2514; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations ? 200.318(i) states 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. Condition: Of the five procurement transactions tested for compliance with federal regulations, three instances were noted where the history of the procurement was not documented. Additionally, for two procurements tested, there was no documentation of full and open competition. Questioned Costs: None. Context: Five of 30 small purchase procurements were tested for compliance with applicable federal regulations. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: MNPrairie is not in compliance with federal regulations. Cause: Processes have not been implemented to ensure that required procurement documentation is prepared in accordance with federal regulations and the procurement policy. Recommendation: We recommend MNPrairie document the history of procurement transactions including full and open competition in accordance with federal regulations. View of Responsible Official: Acknowledge.

2022-003 Eligibility Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2201MNTANF; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 42 U.S. Code of Federal Regulations ? 602(a)(1)(B)(iii) requires each state to create a written document that sets forth the objective criteria for the delivery of benefits and the determination of eligibility. The Minnesota Department of Human Services? State Plan for Temporary Assistance for Needy Families (TANF) and Minn. Stat. ? 256J.10 establish the general eligibility requirements for TANF benefits. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation was available, updated, or input correctly to support participant eligibility. The following exceptions were noted in the sample of 40 MAXIS case files tested: ? One case file viewed included child support income which was not supported by documentation on file. ? Four case files viewed either did not have updated asset amounts or the asset amounts listed were not supported by documentation on file. Questioned Costs: None. Context: The State of Minnesota and MNPrairie split the eligibility determination process. Pursuant to Minnesota statutes, MNPrairie performs the ?intake function? needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. 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 documenting verification of key eligibility-determining factors increases the risk that a program participant will receive benefits when they are not eligible. Cause: Program personnel entering case data into MAXIS did not ensure all required information was input correctly or was supported and that all required information was obtained and/or retained. Recommendation: We recommend MNPrairie implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, the information is properly input or updated in MAXIS, and issues are followed up on in a timely manner. In addition, consideration should be given to providing further training to program personnel. View of Responsible Official: Acknowledge.

2022-004 Child Support Non-Cooperation Prior Year Finding Number: N/A Repeat Finding Since: N/A Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.558 Temporary Assistance for Needy Families Award Number and Year: 2201MNTANF; 2022 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 45 U.S. Code of Federal Regulations ? 264.30 states: ?What procedures exist to ensure cooperation with the child support enforcement requirements? (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. (b) If the IV-D agency determines that an individual is not cooperating, and the individual does not qualify for a good cause or other exception established by the State agency responsible for making good cause determinations in accordance with section 454(29) of the Act or for a good cause domestic violence waiver granted in accordance with ? 260.52 of this chapter, then the IV-D agency must notify the IV-A agency promptly. (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program." Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by MNPrairie to support the eligibility determination process. Part of the eligibility determination process is cooperating with child support requirements. When a case is in child support non-cooperation status, per the IV-D agency, MNPrairie must reduce benefits. In a sample of 15 case files reviewed, two case files had identified errors related to improper reduction of benefits or improper timing of reduced benefits for case files in non-cooperation status. Questioned Costs: None. Context: Child support non-cooperation is determined by MNPrairie, and the Providing Resources to Improve Support in Minnesota (PRISM) system maintains the information and recipient status. When a Child Support Officer at MNPrairie updates PRISM to show non-cooperation, it interfaces with MAXIS. From this interface, MAXIS receives a Worker?s Daily Report (DAIL) message which notifies the entity of child support non-cooperation. MNPrairie is responsible for updating the recipient?s record in MAXIS, including entering child support sanctions, or closing a case on the seventh occurrence of noncompliance. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Noncompliance with Title 45 U.S. Code of Federal Regulations ? 264.30. Benefit overpayments could be paid when child support non-cooperation is not properly processed for a benefit month. Cause: Program personnel entering case data into MAXIS overlooked reducing the benefits for the child support non-cooperation cases identified. Recommendation: We recommend MNPrairie review its guidance for child support non-cooperation to ensure benefits are being reduced as necessary in MAXIS. View of Responsible Official: Acknowledge.

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