DURHAM COUNTYLocal Government

2025-004 Material Weakness – Eligibility Second Party Reviews Information on the Federal Program: Temporary Assistance for Needy Families, Assistance Listing Number 93.558, U.S. Department of Health and Human Services, passed through the N.C. Department of Health and Human Services (NCDHHS), Division of Social Service. Criteria: Per the DSS Administrative Letter for Economic and Family Service 07-2018, Work First Program Second Party Review Checklists must be completed at application and recertification for no less than 25% of the monthly ongoing Work First cases. The protocol must outline the persons responsible for completing the reviews and the process for follow-up as required. If second party reviews identify a trend in deficiencies; the County process for providing necessary training must also be outlined. Condition: The County was not abiding by the State policy and procedures outlined above. Reviews were not taking place at the frequency level based on number of cases. The County only reviewed 5% of the required cases during the 2025 fiscal year. Cause: The County completed second party reviews for 93 out of 1,875 cases during fiscal year 2025. The County did not meet the proper policy procedures of examining no less than 25% of cases. Effect: Lack of appropriate levels of review occurring during the year increases the risk that the County could provide benefits to individuals that are not eligible to receive those benefits. Recommendation: We recommend that the County abide by the State policies in terms of the frequency and amount of case reviews each month. We also recommend that policies and procedures are documented surrounding second party reviews and be reinforced to ensure that reviews are being completed and followed up as necessary. Auditee’s Response: The County agrees with this finding.

Finding 2022-001 Federal Agency: U.S. Department of Health and Human Services Federal Program: Medical Assistance Program (Medicaid; Title XIX) ALN: #93.778 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Controls over Compliance, Nonmaterial Noncompliance Repeat Finding: Yes - 2021-001, 2020-001 CRITERIA: Title 2 U.S. Code of Federal Regulations Section 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. CONDITION: The County maintains the computer system which is used to support the eligibility determination process. The Quality Assurance and Training ("QAT") unit reviews three randomly generated cases for each social worker per month. The selected cases are reviewed by the QAT team and notes are made in the quality control system to document any necessary corrections. The system requires the QAT team to enter a review date and a due date. The social worker and manager are notified of the selected case files that require correction. Once the social workers make their corrections, the supervisors review the corrections. It is the County's policy that the social workers make the corrections within 10 days of the QAT unit's review, and the supervisors confirm the corrections within 30 days of the QAT review. During our testing of controls over Eligibility, we sampled 60 case file reviews that were reviewed by the QAT unit during FY 2022 and noted the following: - 20 instances in which the QAT unit found no corrective action necessary. - 28 instances in which the QAT unit noted corrective actions were required and these were remediated within the time period specified by County policy. - 8 instances in which the County?s QAT unit noted corrective actions were required and these were remediated, but not within the time period specified by County policy ? corrections were made and reviewed more than 30 days after the QAT unit?s review ? specifically 33, 33, 35, 36, 42, 56, 61, and 147 days later. - 4 instances in which the County?s QAT unit noted corrective actions were required and had not been remediated at of the time of the audit. CONTEXT: Out of 1,197 reviews performed by the Quality Assurance and Training (QAT) unit during FY22, we tested the timeliness of the corrections made to 60 files. The deficiencies above were noted in 12 of the 60 files tested. QUESTION COSTS: None noted. CAUSE: The County did not follow its policy on when corrective action must occur. EFFECTS: Incomplete case files or case files which do not adhere to the County's policies or procedures increases the risk that the County could provide services to individuals not eligible to receive such services or that individuals could be denied benefits for which they are eligible. RECOMMENDATIONS: We recommend the County adhere to the policies to ensure cases selected for quality review are remediated in a timely manner. Best practices in this regard are within 30 days. VIEWS of RESPONSIBLE OFFICIALS: Management agrees with the finding.

Finding 2022-002 Federal Agency: U.S. Department of Agriculture Federal Program: Supplemental Nutrition Assistance Program (SNAP) Cluster ALN: #10.551 and #10.561 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Controls over Compliance, Nonmaterial Noncompliance Repeat Finding: No CRITERIA: Title 2 U.S. Code of Federal Regulations Section 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. CONDITION: The County has established a Quality Assurance and Training ("QAT") unit that reviews all cases prepared by probationary employees during the mentoring and 100% QC phase of Family Economic Independence new-hire training. The unit also conducts random reviews of actions prepared by case workers (two per worker/month). The QAT unit completes quality assurance reviews using an automated QC tool that immediately sends review results to the worker and their supervisor. It is the County's policy that corrections be made by case workers within 10 days of the QAT unit's review and that the supervisors review the corrections within 30 days. During our testing of controls over eligibility, we sampled 40 case files that were reviewed by the Quality Assurance and Training unit during FY22 and noted the following: - 16 instances in which the County?s QAT unit found no corrective action necessary. - 6 instances in which the County?s QAT noted corrective actions were required and remediated within the time period specified by County policy. - 8 instances in which the County?s QAT unit noted corrective actions were required and not remediated within the time period specified by County policy ? case worker corrections not made within 10 days and not reviewed by supervisor within 30 days. CONTEXT: Out of 82 reviews performed by the Quality Assurance and Training (QAT) unit during FY22, we tested the timeliness of the corrections made to 40 files. The deficiencies above were noted in 8 of the 40 files tested. QUESTIONED COSTS: None noted. CAUSE: The County did not follow its policy on when remediation must occur. EFFECTS: Incomplete case files or case files that do not adhere to the County's policies or procedures increases the risk that the County could provide services to individuals not eligible to receive such services or that eligible individuals could be denied benefits. RECOMMENDATIONS: We recommend the County adhere to its policy to ensure cases selected for quality review are remediated in a timely manner. Best practices in this regard are within 30 days. VIEWS of RESPONSIBLE OFFICIALS: Management agrees with the finding.

Finding 2022-003 Federal Agency: U.S. Department of Health and Human Services Federal Program: Foster Care - Title IV-E; Adoption Assistance ALNs: #93.658 and #93.659 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Controls over Compliance, Nonmaterial Noncompliance Repeat Finding: No CRITERIA: Title 2 U.S. Code of Federal Regulations Section 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. CONDITION: The has established a policy that all social workers are responsible for ensuring all requirements are met and that appropriate documentation is maintained. Supervisors are required to perform reviews to ensure case workers are following guidelines and are required to review and approve files prior to enrollment. During our testing of controls over eligibility, we sampled 25 case files for FY22 and noted the following: - 1 instance in which the case file contained no support documents, child aged out of system in FY22. - 1 instance in which the case file did not contain evidence to support that the NC Child Abuse and Neglect registry check was complete, nor the Responsible Individual?s List check. - 1 instance in which the Supervisor?s approval was not evident and the child?s residency as a U.S. Citizen or qualified alien could not be supported. CONTEXT: Out of 25 case files reviewed, we tested completeness of the support documents associated with the files. The deficiencies above were noted in 3 of the 25 files tested. QUESTIONED COSTS: None noted. CAUSE: The County did not follow its policy to ensure appropriate documentation is maintained. EFFECTS: Incomplete case files or case files that do not adhere to the County's policies or procedures increases the risk that the County could provide services to individuals not eligible to receive such services or that eligible individuals could be denied benefits. RECOMMENDATIONS: We recommend the County adhere to its policy to review cases and ensure appropriate documentation is maintained for all cases. VIEWS of RESPONSIBLE OFFICIALS: Management agrees with the finding.

U.S. Department of Health and Human Services Passed through N.C. Department of Health and Human Services, Division of Social Services Program Name: Medical Assistance Program (Medicaid; Title XIX) Federal Assistance Listing #: 93.778 Finding: 2021-001 (Repeat Quality Control Finding) Significant Deficiency Nonmaterial Noncompliance ? Eligibility (Federal and State) Criteria or Specific Requirement: In accordance with Section 200.303 of the Uniform Grant Guidance, each non-federal entity must establish and maintain effective internal controls over the Federal award that provides assurance that the non-federal entity is managing the federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted three instances in which corrective action on an eligibility case selected by the County?s Quality Assurance Department was not remediated during the fiscal year. In addition to four instances in which corrective action on an eligibility case was not made. Context: Out of 60 cases tested for eligibility, seven cases had case files that did not meet the County?s documentation and process standards. Corrections to three cases were made during the review, four to ten months after the date of review. Corrections were not made to the remaining four cases. Known Questioned Costs: There are no questioned costs as the participants were eligible for services being provided and there were no improper payments. Effect: Case files were incomplete or did not adhere to the County?s policies or procedures. Cause: The County did not follow their policy on when remediation must occur. Recommendation: We recommend that the County implement and adhere to a policy to ensure cases selected for quality review are remediated in a timely manner. Best practices in this regard are within 30 days. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See Corrective Action Plan prepared by the County.

U.S. Department of Health and Human Services Passed through N.C. Department of Health and Human Services, Division of Public Health Program Name: Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Assistance Listing #: 93.323 Finding: 2021-002 Nonmaterial Noncompliance ? Reporting Criteria or Specific Requirement: The County is required to submit their fourth quarter report containing performance measures, performance monitoring, and quality assurance to the North Carolina Department of Heath and Human Services (NC DHHS) by July 31, 2021. Condition: The fourth quarter program report was received by the NC DHHS on August 13, 2021. Context: The fourth quarter program was not submitted by the County by the required deadline. Questioned Costs: None noted. Effect: The County's quarterly program report was submitted beyond the deadline of July 31st. Cause: Lack of oversight for required reporting deadlines. Recommendation: Program management should schedule the required reporting deadlines on their team's calendar to ensure reports are submitted timely to program or grantee. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See Corrective Action Plan prepared by the County.

U.S. Department of Health and Human Services Passed through N.C. Department of Health and Human Services, Division of Social Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA#: 93.778 Finding: 2020-001 (Repeat Quality Control Finding) Significant Deficiency ? Eligibility (Federal and State) Criteria or Specific Requirement: In accordance with Section 200.303 of the Uniform Grant Guidance, each non-federal entity must establish and maintain effective internal controls over the Federal award that provides assurance that the non-federal entity is managing the federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted two instances in which corrective action on an eligibility case selected by the County?s Quality Assurance Department was not remediated during the fiscal year. Context: Out of 60 cases tested for eligibility, two cases had case files that did not meet the County?s documentation and process standards. Corrections to this case were made approximately 16 months after the date of review. Known Questioned Costs: There are no questioned costs as the child was eligible for services being provided and there were no improper payments. Effect: Case file was incomplete or did not adhere to the County?s policies or procedures. Cause: The County did not follow their policy on when remediation must occur. Recommendation: We recommend that the County implement a policy to ensure cases selected for quality review are remediated in a timely manner. Best practices in this regard are within 30 days. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See Corrective Action Plan prepared by the County.

U.S. Department of Health and Human Services Passed through N.C. Department of Health and Human Services, Division of Social Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA#: 93.778 Finding: 2020-002 Nonmaterial Noncompliance ? Eligibility (Federal and State) Criteria or Specific Requirement: The County should have adequate controls to ensure that all information is updated appropriately in recipient?s files and in the NCFast system, and to ensure that all required physical documentation is located in the file to properly document eligibility with program requirements. Condition: There were 6 out of 60 participants tested with technical errors noted below. All participants were determined to have properly been eligible. a) There was one instance where the case population noted the client under MIC/N, and the file documentation noted the client was under program MAF/C. b) There was one instance where the household count improperly included an additional member of the household that should not have been included during the period tested. c) There was one instance where only one piece of evidence was provided for the proof of residency for an initial application. d) There were two instances where the DMV in OVS/OLV returned ?inconclusive? results that were not cleared. e) There were two instances noted where OVS was ran and the results noted an ?error? and ?inconclusive? results that were not cleared. f) There was one instance the FL2 form was not provided for review, it was noted within the case file it was obtained. g) One instance was noted where the applicant used self-declaration for the State residency verification, however the form was not provided during review. h) One instance was noted where the household and relationship status entered into NC FAST did not agree to supporting documentation. The individual was married and this was not included in NC FAST. The spouse?s income was not included in the budget calculation. Context: There were 6 out of 93 participants tested with the errors noted above. Questioned Costs: There are no questioned costs as the individuals were eligible for Medicaid services being provided and there were no improper payments. Effect: By not having the required documentation in the files or information being incorrectly documented, eligibility cannot be readily substantiated and there is a risk that the County could provide funding to individuals who are not eligible. Cause: The County oversight when performing reviews over applications. Recommendation: Although these issues will occur from time to time considering the volume of case files that the County processes and maintains, we recommend that procedures be reinforced in order to ensure that all proper documentation is kept and maintained in the case file in an attempt to prevent loose filings resulting in missing documentation. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See Corrective Action Plan prepared by the County.

U.S. Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA#: 93.778 Finding: 2019-001 (Repeat Quality Control Finding) Significant Deficiency ? Eligibility Criteria or Specific Requirement: In accordance with Section 200.303 of the Uniform Grant Guidance, each non-federal entity must establish and maintain effective internal controls over the Federal award that provides assurance that the non-federal entity is managing the federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted one instance in which corrective action on an eligibility case selected by the County?s Quality Assurance Department was not remediated during the fiscal year. Context: Out of 60 cases tested for eligibility, one case had case files that did not meet the County?s documentation and process standards. Corrections to this case were made approximately 8 months after the date of review. Known Questioned Costs: There are no questioned costs as the child was eligible for services being provided and there were no improper payments. Effect: Case file was incomplete or did not adhere to the County?s policies or procedures. Cause: The County did not follow their policy on when remediation must occur. Recommendation: We recommend that the County implement a policy to ensure cases selected for quality review are remediated in a timely manner. Best practices in this regard are within 30 days. Views of Responsible Officials: Management agrees with the finding.

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