Alexander CountyLocal Government

Significant Deficiency Criteria: In accordance with the Division of Social Services Fiscal Manual, DSS employees should control physical access to the state network terminals or personal computers that are connected to the state mainframe. Condition: Upon surprise inspection, one unattended workstation of a DSS employee was logged onto the state network, without anyone attending to the workstation. Context: While performing testing of internal control over compliance related to the Division of Social Services, we noted the above condition. Effect: Unauthorized access to the state system could be obtained due to the unattended logon to the system throughout the DSS building. Cause: Lack of proper internal controls over data security Indication of a Repeat Finding: This is a modified and repeated finding from the immediate previous audit, 2024-001. Questioned Costs: None. The finding represents an internal control issue; therefore, no questioned costs are applicable. Recommendation: Require the County Data Processing Department to implement procedures to require logout of workstations where access to the state DSS system is granted. The control procedures should include random verification of logout in instances where offices are unattended. View of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan submitted with this report.

U.S. Department of Health and Human Services Passed through the N.C. Dept. Of Health and Human Services Program Name: Medicaid Cluster AL # 93.778 Grant Number: XIX-MAP23 Program Name: Foster Care Title IV-E AL # 93.658 Grant Number: 2401NCFOST Program Name: Adoption Assistance AL # 93.659 Grant Number: 2401NCADPT Finding 2024-001 Significant Deficiency Non-Material Non-Compliance, Special Tests and Provisions Criteria: In accordance with 2CFR 200, management must have an adequate system of internal control procedures in place to adequately safeguard confidential information from unauthorized use in compliance with applicable laws and regulations. Condition: Upon surprise inspection, two unattended workstations of DSS employees were logged onto the state network, without anyone attending to the workstation. Context: While performing testing of internal control over compliance related to the Division of Social Services, we noted the above condition. Effect: Unauthorized access to the state system could be obtained due to the unattended logon to the system throughout the DSS building. Cause: Lack of proper internal controls over data security. Questioned Costs: None. The finding represents an internal control issue; therefore, no questioned costs are applicable. Recommendation: Require the County Data Processing Department to implement procedures to require logout of workstations where access to the state DSS system is granted. The control procedures should include random verification of logout in instances where offices are unattended. View of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan submitted with this report.

U.S. Department of Health and Human Services Passed through the N.C. Dept. Of Health and Human Services Program Name: Medicaid Cluster AL # 93.778 Grant Number: XIX-MAP23 Program Name: Foster Care Title IV-E AL # 93.658 Grant Number: 2401NCFOST Program Name: Adoption Assistance AL # 93.659 Grant Number: 2401NCADPT Finding 2024-002 Significant Deficiency Non-Material Non-Compliance, Special Tests and Provisions Criteria: In accordance with 2CFR 200, management should have an adequate system of internal controls in place to ensure proper use of indirect cost plan rates in compliance with applicable laws and regulations. Condition: Upon review of the statement of administrative costs, it was determined the County was not requesting reimbursement at the approved and NC DHHS certified rate for the fiscal year. Context: While performing testing of compliance requirements over the DSS 1571 it was noted the County was using an unapproved rate of ($4,704) per month instead of the correct rate of ($3,718) per month for a portion of the indirect cost plan. This amount occurred for 9 months causing a $8,873 difference in the reporting out of $868,932 for the total plan. Effect: The County’s indirect cost reimbursement could be disallowed for any amount in excess of the certified amount. Cause: Lack of proper internal controls over the indirect cost plan. Questioned Costs: In accordance with 2CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Likely questioned costs do not exceed $25,000. Recommendation: Require the County to implement internal controls over the indirect cost reporting on the DSS-1571 to ensure compliance with Division of Social Services Fiscal Manual. View of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan submitted with this report.

U.S. Department of Health and Human Services Passed through the N.C. Dept. Of Health and Human Services Program Name: Medicaid Cluster AL # 93.778 Grant Number: XIX-MAP23 Program Name: Foster Care Title IV-E AL # 93.658 Grant Number: 2401NCFOST Program Name: Adoption Assistance AL # 93.659 Grant Number: 2401NCADPT Finding 2024-003 Significant Deficiency Non-Material Non-Compliance, Special Tests and Provisions Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure proper use of approved mileage and meal reimbursement rates in compliance with applicable laws and regulations. The County requires DSS employees to use the correct approved mileage and meal reimbursement rates when submitting requests for reimbursement. Condition: Upon inspection of reimbursement request forms, employees did not use the correct approved rate for meal reimbursement. Context: While performing testing of internal control over compliance related to the Division of Social Services and Finance, we noted that an employee was given a larger meal reimbursement than what was allowed per the County policy and reimbursement form. Of the $2,244 that we tested there was one instance in which personnel was paid $10 more than allowed by county policy. Effect: Incorrect meal reimbursement amounts could be distributed to employees. Cause: Lack of proper internal controls over meal reimbursement requests. Questioned Costs: In accordance with 2CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Likely questioned costs do not exceed $25,000. Recommendation: The County should implement internal controls to ensure that meals are reimbursed at the appropriate rates, per County policy. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plan submitted with this report.

U.S. Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Foster Care Title IV-E AL # 93.658 Grant Number: 2201NCFOST Program Name: Adoption Assistance AL # 93.659 Grant Number: 2201NCADPT MATERIAL NON-COMPLIANCE MATERIAL WEAKNESS, ELIGIBILITY Finding: 2022-001 Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure the accuracy of benefits being provided is within program requirements. Management must monitor activities under federal awards to assure compliance with federal requirements. In accordance with 45 CFR Part 1356.71(f), case record of the child must contain sufficient documentation to verify a child?s eligibility in order to substantiate payments made on the child?s behalf. Condition: One case file had supporting documentation by caseworker in NC FAST that showed participant was eligible for IV-B State funding but it did not match the funding type being paid to the participant (IV-E) according to the North Carolina Department of Health and Human Services Final Foster Care Payment Report PQA020. Context: Of the 35 participants during the current fiscal year valued at $134,361, we examined 7 participants ($21,456 value) and determined that the above condition applied to one participant (14%, valued at $3,060). We determined that the participant was still eligible for Foster Care services but cannot determine whether the participant is in the proper funding program without further investigation. Effect: Participants could receive benefits for which they are not eligible. Cause: Caseworker did not take proper steps in making sure program documentation in NC FAST agrees to the type of funding that was being paid to participant. Questioned Costs: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Even though the sample results only identified $3,059.80 (federal share $2,486.26 and state share $573.54) in questioned costs, if tests were extended to the entire population, questioned costs could exceed $25,000. Recommendation: Caseworkers should review their eligibility determinations and ensure all documentation is accurate and supports the program that has been selected for benefits. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

U.S. Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Low-Income Home Energy Assistance AL # 93.568 Grant Number: 2201NCLIEA MATERIAL WEAKNESS, ELIGIBILITY Finding: 2022-002 Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure the accuracy of benefits being provided is within program requirements. Management must monitor activities under federal awards to assure compliance with federal requirements. In accordance with EP-400 Crisis Intervention Programs section 400.03 (F) and EP-300 Low Income Energy Assistance Program, section 300.09 (A), online verification system must be run in NC FAST on each CIP and LIEAP application. Also, in accordance with EP- 300 Low Income Energy Assistance Program, section 300.09 (A), income verification used should be documented in NC FAST and the information should be uploaded in NC FAST. Condition: Three applicants had income documented in NC FAST that did not match the supporting source documents within the system. Two other applicants did not have documentation of online verifications (OVS) being performed at the point of application. After review of the cases with workers, all applicants were found to still be eligible for energy benefits. Context: Of the 1,193 applicants during the current fiscal year valued at $541,867, we examined 60 applicants ($28,174 value) and determined that the above condition applied to five applicants (8%, valued at $2,665). We determined that all five were still eligible after redetermination with the correct documentation. Effect: Applicants could receive benefits for which they are not eligible. Cause: Workers did not take proper steps in making sure what was used for eligibility determination was complete and accurate per program guidelines. Questioned Costs: The finding represents an internal control issue; therefore, no questioned costs are applicable. Upon further review, each applicant was still eligible to receive energy benefits. Recommendation: Workers should review their eligibility determinations and ensure all documentation is included and accurate. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

US Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Medicaid Cluster AL # 93.778 Grant Number: XIX-MAP21 Non-Material Non-Compliance Material Weakness, Eligibility Finding: 2021-001 Criteria: In accordance with 42 CFR 435, benefits should be terminated timely and properly to prevent participants from receiving benefits when not eligible. In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that benefits are properly discontinued after a case is terminated for benefits. Condition: One casefile was terminated by the County in a prior year, but benefits continued after termination. The case was not properly terminated in NC FAST by the caseworker initially. Eligibility determination for the claim date of service could not be determined because documentation was not available. Context: Of the 609,647 benefit payments valued at $67,125,952, we examined 60 payment records ($6,887 value) and determined that one (2%, valued at $26) of the participants, received benefits after the casefile was meant to be terminated. The participant is currently not eligible for the benefits. Effect: Casefiles not properly terminated can cause participants to receive benefits when they are not eligible for the benefits. Cause: The County did not properly terminate the casefile. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2020-001. Questioned Costs: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Even though the sample results only identified $26 (federal share $26 and state share $0) in questioned costs, if tests were extended to the entire population, questioned costs could exceed $25,000. Recommendation: Caseworkers should review the process of terminating a casefile to ensure that they properly terminate benefits in NC FAST in accordance with State procedures. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

US Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Medicaid Cluster AL # 93.778 Grant Number: XIX-MAP21 Material Weakness, Eligibility Finding: 2021-002 Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific eligibility standards, and documentation must be maintained to support those determinations. In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure the accuracy of benefits being provided is within program requirements. Management must monitor activities under federal awards to assure compliance with federal requirements. Condition: Three casefiles had income documented in NC FAST that did not match the supporting source documents; furthermore, one of the three casefiles also had the incorrect household size documented in the system. One casefile did not have documentation of referral for IV-D child support. One casefile had resources documented in NC FAST that did not match supporting source document (AVS). After review of the cases, the participants were all found to still be eligible for Medicaid benefits. Context: Of the 609,647 benefit payments valued at $67,125,952, we examined 60 payment records ($6,887 value) and determined that the above condition applied to five payments (8%, valued at $201). We determined that all five were still eligible after redetermination with the correct documentation. Effect: Participants could receive benefits for which they are not eligible. Cause: Caseworkers did not take proper steps in making sure what was used for eligibility determination was complete and accurate per program guidelines. Questioned Costs: The finding represents an internal control issue; therefore, no questioned costs are applicable. Upon further review, each applicant was still eligible to receive Medicaid benefits. Recommendation: Caseworkers should review their eligibility determinations and ensure all documentation is included and accurate. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

US Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Medicaid Cluster CFDA # 93.778 Grant Number: XIX-MAP20 NON-MATERIAL NON-COMPLIANCE MATERIAL WEAKNESS, ELIGIBILITY Finding: 2020-001 Criteria: In accordance with 42 CFR 435, benefits should be terminated timely and properly to prevent participants from receiving benefits when not eligible. In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that benefits are properly discontinued after a case is terminated for benefits. Condition: One casefile was terminated by the County in a prior year, but benefits continued after termination. The case was not properly terminated in NC FAST by the caseworker initially. Eligibility determination for the claim date of service could not be determined because documentation was not available. Context: Of the 554,635 benefit payments valued at $52,029,958, we examined 60 payment records ($2,797 value) and determined that one (2%, valued at $10) of the participants, received benefits after the casefile was meant to be terminated. The participant is currently not eligible for the benefits. Effect: Casefiles not properly terminated can cause participants to receive benefits when they are not eligible for the benefits. Cause: The County did not properly terminate the casefile. Questioned Costs: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Even though the sample results only identified $10 (federal share $10 and state share $0) in questioned costs, if tests were extended to the entire population, questioned costs could exceed $25,000. Recommendation: Caseworkers should review the process of terminating a casefile to ensure that they properly terminate benefits in NC FAST in accordance with State procedures. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

US Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Medicaid Cluster CFDA # 93.778 Grant Number: XIX-MAP20 SIGNIFICANT DEFICIENCY, SPECIAL TESTS Finding: 2020-002 Criteria: In accordance with the Division of Social Services Fiscal Manual, DSS employees should control physical access to the State network terminals or personal computers that are connected to the State mainframe. Condition: Upon surprise inspection, one unattended work station of a DSS employee was logged onto the State network without anyone attending to the work station. Context: While performing testing of internal control over compliance related to the Division of Social Services, we noted the above condition. Effect: Unauthorized access to the State system could be obtained due to the unattended logon to the system throughout the DSS building. Cause: Lack of proper internal controls over data security. Questioned Costs: None. The finding represents an internal control issue; therefore, no questioned costs are applicable. Recommendation: Require the County Data Processing Department to implement procedures to require logout of workstations where access to the State DSS system is granted. The control procedures should include random verification of logout in instances where offices are unattended. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

US Department of Health and Human Services Passed through the N.C. Dept. of Health and Human Services Program Name: Medicaid Cluster CFDA # 93.778 Grant Number: XIX-MAP20 SIGNIFICANT DEFICIENCY, REPORTING Finding: 2020-003 Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that salaries and fringe reported on Part I Statement of Administrative Costs for the 1571 crosscutting monthly reporting is correct. Condition: Due to turnover in the Department of Social Services Business Office, 3 months of salary and fringe benefits were incorrectly reported on the Part I Statement of Administrative costs 1571. Context: We examined 3 out of 12 of the 1571 crosscutting monthly reports and determined that 3 or (25%) had salary and fringe benefits that were incorrectly reported on the Part I Statement of Administrative Costs. Effect: Salary and fringe benefits not being correctly reported could cause the State to reimburse the incorrect amount to the County. Cause: The spreadsheet used to calculate salaries and fringe had an incorrect formula causing the total salaries and benefits column to include fringe benefits twice. Questioned Costs: None. The finding represents an internal control issue; therefore, no questioned costs are applicable. Recommendation: Management should implement internal controls to ensure accuracy of the 1571 crosscutting monthly submission. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan submitted with this report.

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