FRANKLIN COUNTY, NORTH CAROLINA

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2025-2 MATERIAL WEAKNESS / NON-MATERIAL NONCOMPLIANCE Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for:  Age  Citizenship/Identity  State residency  Household composition and relationship  Living arrangement  Social Security Number  Pregnancy (if applicable)  Disability, Blindness (if applicable)  Medicare  Cooperation with Child Support  Liquid Assets  Vehicles and Other Personal Property  Real Property  Deductibles  Income (Self-employment, Other earned income, Unearned income)  Accurate computation of countable income and resources.  Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 26 instances of case records not containing the proper verifications, documentation or computations as required by policy for the claim that we tested. Three cases were not properly documented in evidence for liquid assets based on the verifications received. Three claims did not have proper verification and documentation for real property. Seven cases had a review that was not completed timely. Six cases did not have proper verification and / or documentation of income. Three cases did not properly document household composition, relationships, and tax filing status. Two cases did not properly document residency for type of verification used. Two cases did not properly record liquid assets based on the verifications received. One case did not properly document receipt of Medicare. Two cases did not properly record cases on the Covid Batch Report. Questioned Costs: There were five known errors in our testing for claims being paid on an ineligible recipient. Those five claims totaled $1,548. Context: Out of 492,890 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 24 of the 101 claims tested. Effect: Case files not containing all required documentation results in a risk that services could be provided to individuals not eligible and that individuals could be denied benefits for which they are eligible. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all but 5 cases. Identification of a repeat finding: Missing documentation/information has been a finding in previous audits, 2024-2, 2023-2, 2022-2, 2021-1, 2020-2, 2019-1, 2017-1, 2017-2, 2016-2, and 2016-3. Cause: Missing information could result in improper determination of eligibility. The eligibility determined by the caseworker in twenty of the claims failed to ensure that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NC FAST. In six claims, the review process was not completed in a timely manner. Recommendations: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NC FAST should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. We also recommend that the County review and amend current policies and procedures in place to ensure that all eligibility determination documentation is completed and retained by the County. Views of responsible officials and planned corrective actions: The county acknowledges the technical and internal control errors noted and has ongoing measures in place to ensure that both initial determination and ongoing redetermination in timeliness and accuracy of eligibility determination is in the Medicaid program. The agency has measures in place with the Quality Assurance unit, who is solely dedicated to second party reviews to identify any errors and determine needed training and/or supervision for staff. The agency recognizes the critical importance of ensuring accuracy and timeliness in the Medicaid program and strives to make efforts to ensure that all measures are in place for training, second party reviews, and quality control to include Quality Assurance team, Medicaid Supervisors, and Medicaid Lead Workers.

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2024-2 SIGNIFICANT DEFICIENCY Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for:  Age  Citizenship/Identity  State residency  Household composition and relationship  Living arrangement  Social Security Number  Pregnancy (if applicable)  Disability, Blindness (if applicable)  Medicare  Cooperation with Child Support  Liquid Assets  Vehicles and Other Personal Property  Real Property  Deductibles  Income (Self-employment, Other earned income, Unearned income)  Accurate computation of countable income and resources.  Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 21 instances of case records not containing the proper verifications, documentation or computations as required by policy for the claim that we tested. Two cases were not properly documented in evidence for liquid assets based on the verifications received. One claim did not have proper verification and documentation for real property. One case did not contain proper documentation and verification of living arrangement. Three cases did not contain proper verification of vehicle ownership and value of vehicles. Two cases had a review that was not completed timely. Five cases did not have proper verification and / or documentation of income. Of those cases four were regarding earned income and one was regarding unearned income. Four cases did not properly document household composition, relationships, and tax filing status. Two cases did not apply the correct policy and rules for budgeting for things such as PLA vs long-term care budget and which deductions from income are allowable. One case did not properly document residency for type of verification used. Questioned Costs: There were no known errors in our testing for claims being paid on an ineligible recipient. Context: Out of 680,717 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 15 of the 101 claims tested. Effect: Case files not containing all required documentation results in a risk that services could be provided to individuals not eligible and that individuals could be denied benefits for which they are eligible. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all cases. Identification of a repeat finding: Missing documentation/information has been a finding in previous audits, 2023-2, 2022-2, 2021-1, 2020-2, 2019-1, 2017-1, 2017-2, 2016-2, and 2016-3. There has been improvement in this area in recent years. Cause: Missing information could result in improper determination of eligibility. The eligibility determined by the caseworker in thirteen of the fifteen claims failed to ensure that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NC FAST. In two of the fifteen claims, the review process was not completed in a timely manner. Recommendations: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NC FAST should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. Views of responsible officials and planned corrective actions: The county acknowledges the technical and internal control errors noted and has ongoing measures in place to ensure that both initial determination and ongoing redetermination in timeliness and accuracy of eligibility determination is in the Medicaid program. The agency has measures in place with the Quality Assurance unit, who is solely dedicated to second party reviews to identify any errors and determine needed training and/or supervision for staff. The agency recognizes the critical importance of ensuring accuracy and timeliness in the Medicaid program and strives to make efforts to ensure that all measures are in place for training, second party reviews, and quality control to include Quality Assurance team, Medicaid Supervisors, and Medicaid Lead Workers.

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2023-2 SIGNIFICANT DEFICIENCY Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for: • Age • Citizenship/Identity • State residency • Household composition and relationship • Living arrangement • Social Security Number • Pregnancy (if applicable) • Disability, Blindness (if applicable) • Medicare • Cooperation with Child Support • Liquid Assets • Vehicles and Other Personal Property • Real Property • Deductibles • Income (Self-employment, Other earned income, Unearned income) • Accurate computation of countable income and resources. • Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 15 instances of case records not containing the proper verifications, documentation or computations as required by policy for the claim that we tested. Two cases were not properly documented in evidence for liquid assets based on the verifications received. Four claims did not have proper verification and documentation for real property. Six cases did not contain proper documentation and verification of living arrangement. Two cases did not contain proper verification of vehicle ownership and value of vehicles. One case did not have a IV-D referral completed on it. Questioned Costs: There were no known errors in our testing for claims being paid on an ineligible recipient. Context: Out of 646,899 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 14 of the 101 claims tested. Effect: Case files not containing all required documentation results in a risk that services could be provided to individuals not eligible and that individuals could be denied benefits for which they are eligible. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all cases. Identification of a repeat finding: Missing documentation/information has been a finding in previous audits, 2022-2, 2021-1, 2020-2, 2019-1, 2017-1, 2017-2, 2016-2, and 2016-3. There has been improvement in this area in recent years. Cause: Missing information could result in improper determination of eligibility. The eligibility determined by the caseworker in thirteen of the fourteen claims failed to ensure that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NC FAST. In one of the twelve claims, processes and procedures were not followed to send the applicant for an IV-D referral. Recommendations: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NC FAST should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. Views of responsible officials and planned corrective actions: The county acknowledges the technical and internal control errors noted and has ongoing measures in place to ensure that both initial determination and ongoing redetermination in timeliness and accuracy of eligibility determination is in the Medicaid program. The agency has measures in place with the Quality Assurance unit, who is solely dedicated to second party reviews to identify any errors and determine needed training and/or supervision for staff. The agency recognizes the critical importance of ensuring accuracy and timeliness in the Medicaid program and strives to make efforts to ensure that all measures are in place for training, second party reviews, and quality control to include Quality Assurance team, Medicaid Supervisors, and Medicaid Lead Workers.

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2022-2 SIGNIFICANT DEFICIENCY Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for: ? Age ? Citizenship/Identity ? State residency ? Household composition and relationship ? Living arrangement ? Social Security Number ? Pregnancy (if applicable) ? Disability, Blindness (if applicable) ? Medicare ? Cooperation with Child Support ? Liquid Assets ? Vehicles and Other Personal Property ? Real Property ? Deductibles ? Income (Self-employment, Other earned income, Unearned income) ? Accurate computation of countable income and resources. ? Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 12 instances of case records not containing the proper verifications, documentation or computations as required by policy for the claim that we tested. Three case files did not have support for the citizenship verification as indicated in NC Fast that it was verified. Five claims tested (three case files) did not properly count income. One claim tested did not contain disability verification. One claim tested did not have an exparte completed timely for the case. Two bank accounts were not verified as of the first moment of the month for one claim. Questioned Costs: There were no known errors in our testing for claims being paid on an ineligible recipient. Context: Out of 663,968 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 12 of the 101 claims tested. Effect: Case files not containing all required documentation results in a risk that services could be provided to individuals not eligible and that individuals could be denied benefits for which they are eligible. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all cases. Identification of a repeat finding: Missing documentation/information has been a finding in previous audits, 2021-1, 2020-2, 2019-1, 2017-1, 2017-2, 2016-2, and 2016-3. There has been improvement in this area in recent years. Cause: Missing information could result in improper determination of eligibility. The eligibility determination by the caseworker in three of the 12 claims was related to citizenship support not being present. The caseworker is not required to verify citizenship except at application for benefits and therefore the verification could have been performed by another county or many years before and records may have been purged for that application. Our audit though is required to verify citizenship. All recipients were verified to be residents however the method of verification could not be supported with records available at the time of our audit. The eligibility determined by the caseworker in eight of the twelve claims failed to ensure that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NC FAST. In one of the twelve claims, processes and procedures were not followed to timely complete an exparte review and eligibility determination. Recommendations: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NC FAST should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. The County needs to train caseworkers on the need to respond timely and appropriately to cases received from Social Security. Views of responsible officials and planned corrective actions: The county acknowledges the technical and internal control errors noted and has ongoing measures in place to ensure that both initial determination and ongoing redetermination in timeliness and accuracy of eligibility determination is in the Medicaid program. The agency has measures in place with the Quality Assurance unit, who is solely dedicated to second party reviews to identify any errors and determine needed training and/or supervision for staff. Citizenship was verified for the 3 cases noted above; however, the method of verification did not match the evidence entered in the NC FAST program. The agency recognizes the critical importance of ensuring accuracy and timeliness in the Medicaid program and strives to make efforts to ensure that all measures are in place for training, second party reviews, and quality control to include Quality Assurance team, Medicaid Supervisors, and Medicaid Lead Workers.

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2021-1 MATERIAL WEAKNESS US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2021-1 MATERIAL WEAKNESS

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2020-2 MATERIAL WEAKNESS Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for: ? Age ? Citizenship/Identity ? State residency ? Household composition and relationship ? Living arrangement ? Social Security Number ? Pregnancy (if applicable) ? Disability, Blindness (if applicable) ? Medicare ? Cooperation with Child Support ? Liquid Assets ? Vehicles and Other Personal Property ? Real Property ? Deductibles ? Income (Self-employment, Other earned income, Unearned income) ? Accurate computation of countable income and resources. ? Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 17 instances of case records not containing the proper verifications, documentation or computations as required by policy. One case file had no documentation of the applicant paying their fair share of expenses and did not apply the 1/3 reduction. One file contained an error in the date of disability. Three files contained errors related to income policy / income verification. One file did not have the absent parent information documented in evidence. One file concluded and the incorrect aid program was selected. Another file contained an error with AVS (the system used to confirm liquid resources such as bank accounts). One file did not have account ownership documented correctly. There were five instances of vehicles not being documented correctly. Two case files did not have life insurance correct. One case file did not have the reduction of reserves documented accurately to determine the date the applicant became eligible due to being over reserve limit on date of application. Questioned Costs: There were $0 in known errors. Context: Out of 1,114,072 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 11 of the 101 case files tested. Effect: Case files not containing all required documentation result in a risk that the County could provide services to individuals not eligible to receive such services or that such individuals could be denied to eligible benefits. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all but one case and the related claim. That claim totaled $0. Identification of a repeat finding: This is a repeat finding from previous audits, 2019-1, 2017-1, 2017-2, 2016-2, and 2016-3. Cause: The County did not retain required documentation in case files at the time that eligibility was determined. The review performed by the caseworker was ineffective in determining that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NCFast. Recommendations: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NCFast should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. Views of responsible officials and planned corrective actions: The county acknowledges the technical errors noted and has ongoing measures in place to ensure that both initial determination and ongoing redetermination of eligibility for Medicaid is accurate and timely according to policy standards and guidelines. The agency continues to make enhancements to the Quality Assurance Unit to include the recent addition of two lead workers who will assist with training and second party reviews of Medicaid staff and cases. The agency takes pride in the documented improvements noted over the last three years in the Medicaid program. While there are recognized technical errors, 6 or the 17 errors were in 5 cases assigned to 2 caseworkers who are no longer with the agency. In addition, 2 cases noted as having errors are actually only one case but show as two due to the same beneficiary having two claims pulled during the review period. In regard to the one case found as an eligibility error, the agency continues to work with the beneficiary. In determining initial eligibility for the case, the caseworker determined eligibility using the correct application of policy and took the client?s statement regarding excess resources but failed to obtain specific amounts of expenditures in reducing resources. As of the date of this response, the beneficiary has provided documentation for two thirds of the funds but due to her spouse?s hospitalization she is unable to return home to provide documents to the agency in order for the agency to resolve the issue of an eligibility error to the satisfaction of the audit. The agency recognizes the critical importance of ensuring accuracy and fiscal integrity in the Medicaid program and strives to make efforts to ensure that all measures are in place for training, second party reviews, and quality control. However, the agency does acknowledge that there is an element of human error in the daily functions in all program areas.

US Department of Health and Human Services Passed-through the NC Dept. of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2019-1 SIGNIFICANT DEFICIENCY Required verifications and documentation for Eligibility Criteria: Per the North Carolina Medicaid Assistance Program Compliance Supplement, the DSS manuals (Aged, Blind and Disabled manual and the Family and Children Medicaid manual), and Administrative Letters from the Division of Health Benefits case files for individuals or families receiving assistance are required to retain documentation to evidence appropriate eligibility determination, including verifications of and support for: ? Age ? Citizenship/Identity ? State residency ? Household composition and relationship ? Living arrangement ? Social Security Number ? Pregnancy (if applicable) ? Disability, Blindness (if applicable) ? Medicare ? Cooperation with Child Support ? Liquid Assets ? Vehicles and Other Personal Property ? Real Property ? Deductibles ? Income (Self-employment, Other earned income, Unearned income) ? Accurate computation of countable income and resources. ? Reviews/Applications must be completed timely. The DSS manuals and Administrative letters also provide income maintenance amounts and resource limits for the respective Medicaid program and budget unit size. The computed countable income and resources must be under these limits for the person / family to be eligible for the Medicaid program. Condition: We noted 26 instances of case records not containing the proper verifications or proper computations as required by policy. Three of these files were not reviewed timely. Four case files did not contain the appropriate entries for the level of care as required for living arrangement documentation. One case did not contain the diary re-exam date for the disability determination. Another case did not verify a medical deduction in determining the Patient Monthly Liability (PML). Two case files did not verify real property by running inquiries in the Register of Deeds and the Tax Office data bases. One case did not run OVS (On-line Verification System) for the applicant on the case. One file did not include the spouse?s social security disability income at application. One additional case did not accurately calculate self-employment income. Questioned Costs: There were $10 in known errors. The known error rate projects or extrapolates to the entire population of claims paid for the year to an estimated $94,314 in questioned costs for these cases. These questioned costs are for claims paid to beneficiaries and are not reported on the County?s Schedule of Expenditures of Federal and State Awards. The claims are paid directly by the State of North Carolina to the providers or the beneficiaries. Beneficiary eligibility is determined by the county and claim eligibility is determined by the State. The claim payments are reported on the State?s Schedule of Expenditures and Federal Awards only. Context: Out of 1,039,483 Medicaid claims paid during the year, we tested the Medicaid certification of eligibility (initial application or recertification of eligibility) that related to the period that included the date of service for the claim being tested for 101 claims. The conditions noted above were noted in 16 of the 101 case files tested. Effect: Case files not containing all required documentation result in a risk that the County could provide services to individuals not eligible to receive such services or that such individuals could be denied to eligible benefits. Upon notification of the missing documentation or the errors in calculations in the case files, the County was able to obtain documentation and provide corrected calculations to substantiate that the recipients tested were eligible to receive benefits in all but one case and the related claim. That claim totaled $10. Identification of a repeat finding: This is a repeat finding from previous audits, 2017-1, 2017-2, 2016-2, and 2016-3. Cause: The County did not retain required documentation in case files at the time that eligibility was determined. The review performed by the caseworker was ineffective in determining that all required items were retained, that all calculations were accurate, and that all necessary information was entered into NCFast. Recommendation: We recommend that the County train and monitor employees on the eligibility determination process, specifically those areas noted to have errors above. Files should be reviewed internally to ensure proper documentation is in place for eligibility. NCFast should be reviewed to determine that information gathered during the review is properly input into the system and that system driven calculations are utilizing the available information. Views of responsible officials and planned corrective actions: The County acknowledges the errors noted and has measures in place through an enhanced Quality Assurance Unit to ensure that both initial and ongoing eligibility for Medicaid is accurate and timely according to policy standards and guidelines.

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