GRANVILLE COUNTYLocal Government

Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2025 Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid) AL #: 93.778 Finding: 2025-002 Inaccurate Information Entry MATERIAL WEAKNESS; MATERIAL NONCOMPLIANCE Eligibility Criteria: This is a repeat finding from the immediate previous audit 2024-001. Section III - Federal Award Findings and Questioned Costs County records were not reconciled properly. The County should review the ledger and financial documents regularly to ensure that necessary adjustments are made timely during the year. If information is required from outside parties, be sure to request this information in time to make an necessary adjustments. The County agrees with this finding. Please refer to the corrective action plan for details. Section II - Financial Statement Findings Federal regulations under 42 CFR § 435.956 require states to verify eligibility factors using electronic data sources where available, and to obtain documentation for unverifiable information. Additionally, the state's Medicaid manual (Aged, Blind and Disabled manual, Family and Children Medicaid manual and the Integrated Policy manual) mandates that all eligibility determinations include cross-verification of applicant-provided data against reliable external sources to ensure accuracy and prevent improper payments. 155Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2025 Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: There were a total of 29 errors found during our testing procedures: - There was 6 error where resources were incorrectly calculated or were not properly documented in the case file. - There were 8 errors where required information needed for eligibility determinations were not requested or not requested timely at applications or redeterminations. In two notable instances, a failure resulted in a recipient being deemed eligible for Medicaid benefits when they were not, due to income exceeding the eligibility threshold. - There were 1 errors where applicants/beneficiaries not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. - There were 14 errors where a redetermination of eligibility was not performed in accordance with program requirements. The County agrees with the finding and is implementing actions to correct these issues, which are further discussed in the corrective action plan. These control deficiencies and noncompliance increase the risk of improper Medicaid payments, potentially resulting in overpayments to ineligible beneficiaries or underpayments to those who qualify. Section III. Federal Award Findings and Questioned Costs (continued) The deficiencies and noncompliance reported above are caused from ineffective record keeping and case review processes due to insufficient training of staff, lack of oversight from management, and/or inadequate communication between departments resulting in inconsistencies in data sharing and delayed information exchanges. This is a repeat finding from the immediate previous audit, 2024-006. Note in FY 2025 Medicaid findings were combined into a single finding. We recommend that management enhance internal controls by: (1) Providing comprehensive training to staff on the program's eligibility requirements and procedures outlined in the State's Medicaid manuals; (2) Ensuring that there is a formal internal review process and that it is adequately completed to identify and correct errors and monitor compliance; and (3) Communicating all program or policy changes clearly and timely across all departments who oversee eligibility determinations for federal funded programs. Due to the nature of the populations provided from which the samples were chosen, we are unable to calculate questioned costs for the above mentioned potential eligibility and noncompliance errors. We examined 60 cases from of a total of 328,462 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. 156

Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Effect: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2024-005 Non-cooperation with IV-D Referrals SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: The County agrees with the finding. See Corrective Action Plan in the following section. Section II - Financial Statement Findings (continued) Unapproved and ineligible purchases could be made, and the County’s DSS-1571 reimbursement could be overstated. Ineffective record keeping and ineffective purchasing process, incomplete documentation, and incorrect application of rules for computer equipment/services management. Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when making such purchases. Copies of the filed Computer Equipment Acquisition Plan and NCDHHS approval memorandum should be retained and regularly reviewed. In accordance with the Medicaid Manual MA-3365, all Medicaid cases should be evaluated and referred to the Child Support Enforcement Agency (IV-D). The Child Support Enforcement Agency (IV-D) can assist the family in obtaining financial and/or medical support or medical support payments from the child’s non-custodial parent. Cooperation requirement with Social Services and Child Support Agencies must be met or good cause for not cooperating must be established when determining Medicaid eligibility. There were 3 errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 576,600 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Section III - Federal Award Findings and Questioned Costs This is a repeat finding from the immediate previous audit, 2023-002. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. 170Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2024-006 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Section III - Federal Award Findings and Questioned Costs (Continued) Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. There was 1 error discovered during our procedures where required information needed for eligibility determinations were not requested or not requested timely at applications or redeterminations. There was no known affect to eligibility and there were no known questioned costs. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. This is a repeat finding from the immediate previous audit, 2023-004. We examined 60 cases from of a total of 576,600 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Human error in reading the Automated Collection and Tracking System (ACTS) report and/or ineffective case review process. Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determining eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. See Corrective Action Plan in the following section. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. 171

Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2024-006 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Section III - Federal Award Findings and Questioned Costs (Continued) Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. There was 1 error discovered during our procedures where required information needed for eligibility determinations were not requested or not requested timely at applications or redeterminations. There was no known affect to eligibility and there were no known questioned costs. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. This is a repeat finding from the immediate previous audit, 2023-004. We examined 60 cases from of a total of 576,600 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Human error in reading the Automated Collection and Tracking System (ACTS) report and/or ineffective case review process. Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determining eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. See Corrective Action Plan in the following section. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. 171Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2024-007 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Section III - Federal Award Findings and Questioned Costs (Continued) There was no known affect to eligibility and there were no known questioned costs. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. There were 2 errors discovered during our procedures where income or household size was incorrectly calculated or inaccurate information was entered into the case file. This is a repeat finding from the immediate previous audit, 2023-005. The County agrees with the finding. See Corrective Action Plan in the following section. We examined 60 cases from of a total of 576,600 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. 172

Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2024-007 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Section III - Federal Award Findings and Questioned Costs (Continued) There was no known affect to eligibility and there were no known questioned costs. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. There were 2 errors discovered during our procedures where income or household size was incorrectly calculated or inaccurate information was entered into the case file. This is a repeat finding from the immediate previous audit, 2023-005. The County agrees with the finding. See Corrective Action Plan in the following section. We examined 60 cases from of a total of 576,600 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. 172Granville County, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2024 Recommendation: Views of responsible officials and planned corrective actions: Program Name: Medical Assistance Program (Medicaid; Title XIX) AL # 93.778 Section IV - State Award Findings and Questioned Costs The County agrees with the finding. See Corrective Action Plan in the following section. Section III - Federal Award Findings and Questioned Costs (Continued) SIGNIFICANT DEFICENCY: Finding 2024-005, 2024-006, and 2024-007 also apply to State requirements and State Awards. Files should be reviewed internally to ensure all required verifications have been completed and information requested from the applicant/beneficiary or through various systems have been included and necessary procedures are taken when determining eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. 173

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-002 IV-D Cooperation with Child Support SIGNIFICANT DEFICENCY Eligibility Criteria: Section III - Federal Award Findings and Questioned Costs The County's management and other users of the financial statements do not have accurate information for decisions-making and monitoring of the county's financial position and adherence to laws, regulations, and other requirements. Errors in financial reporting could occur and not be detected. County records were not reconciled properly. The County should review the ledger and financial documents regularly to ensure that necessary adjustments are made timely during the year. If information is required from outside parties, be sure to request this information in time to make an necessary adjustments. The County agrees with this finding. Please refer to the corrective action plan for details. Section II - Financial Statement Findings Management should have a system in place to verify that transactions are recorded in correctly, thereby reducing the likelihood of errors in financial reporting. Prior period adjustments were made to the General Fund that decreased fund balance by $13,188. These adjustment were to record a correction to forfeiture funds that were received which had been deposited into the Forfeiture - Treasury checking account, which should have been deposited into the Forfeiture - Department of Justice account. In accordance with the Medicaid Manual MA-3365, all Medicaid cases should be evaluated and referred to the Child Support Enforcement Agency (IV-D). The Child Support Enforcement Agency (IV-D) can assist the family in obtaining financial and/or medical support or medical support payments from the child’s non-custodial parent. Cooperation requirement with Social Services and Child Support Agencies must be met or good cause for not cooperating must be established when determining Medicaid eligibility. Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-003 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Section III - Federal Award Findings and Questioned Costs (Continued) The County agrees with the finding. In accordance with Medicaid Manual MA-2230, Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or noncountable resources and explained within the documentation. There were 6 errors discovered during our procedures that referrals between the County's Department of Social Services and Child Support Agencies were not properly made. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to North Carolina Families Accessing Services through Technology (NC FAST) and a participant could have been approved for benefits for which they were not eligible. Human error in reading the Automated Collection and Tracking System (ACTS) report and/or ineffective case review process. This is a repeat finding from the immediate previous audit, 2022-004. Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determine eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit.

Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-003 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Section III - Federal Award Findings and Questioned Costs (Continued) The County agrees with the finding. In accordance with Medicaid Manual MA-2230, Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or noncountable resources and explained within the documentation. There were 6 errors discovered during our procedures that referrals between the County's Department of Social Services and Child Support Agencies were not properly made. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to North Carolina Families Accessing Services through Technology (NC FAST) and a participant could have been approved for benefits for which they were not eligible. Human error in reading the Automated Collection and Tracking System (ACTS) report and/or ineffective case review process. This is a repeat finding from the immediate previous audit, 2022-004. Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determine eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Condition: Questioned Cost: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-004 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. This is a repeat finding from the immediate previous audit, 2022-005. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. There were 3 errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-004 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. This is a repeat finding from the immediate previous audit, 2022-005. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. The County agrees with the finding. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. There were 3 errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. There were 5 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. There was no known affect to eligibility and there were no known questioned costs. Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-005 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. There were 3 errors discovered during our procedures that inaccurate information was entered when determining eligibility. The County agrees with the finding. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Section III - Federal Award Findings and Questioned Costs (Continued) Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. This is a repeat finding from the immediate previous audit, 2022-006.

Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-005 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. There were 3 errors discovered during our procedures that inaccurate information was entered when determining eligibility. The County agrees with the finding. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Section III - Federal Award Findings and Questioned Costs (Continued) Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. This is a repeat finding from the immediate previous audit, 2022-006. Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-006 Untimely Review of SSI Termination SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Section III - Federal Award Findings and Questioned Costs (Continued) There was 1 applicant/beneficiary was not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. There was no known affect to eligibility and there were no known questioned costs. The County agrees with the finding. This is a repeat finding from the immediate previous audit, 2022-007. In accordance with the Medicaid Manual MA-3120, the State sends notification to the County when a participant is no longer eligible under Supplemental Security Income (SSI) determination, the County is required to initiate the ex parte review within 5 workdays of the date the termination appears on the SSI Termination Report, and complete the redetermination within 4 months of the month the case appears on the SSI Termination Report and notify the recipient about applicant's ongoing eligibility for Medicaid. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions.

Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) AL # 93.778 Finding: 2023-006 Untimely Review of SSI Termination SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Cost: Section III - Federal Award Findings and Questioned Costs (Continued) There was 1 applicant/beneficiary was not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. There was no known affect to eligibility and there were no known questioned costs. The County agrees with the finding. This is a repeat finding from the immediate previous audit, 2022-007. In accordance with the Medicaid Manual MA-3120, the State sends notification to the County when a participant is no longer eligible under Supplemental Security Income (SSI) determination, the County is required to initiate the ex parte review within 5 workdays of the date the termination appears on the SSI Termination Report, and complete the redetermination within 4 months of the month the case appears on the SSI Termination Report and notify the recipient about applicant's ongoing eligibility for Medicaid. We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Food and Nutrition Services (FNS) Cluster AL # 10.551 and 10.561 Finding: 2023-007 SIGNIFICANT DEFICENCY ELIGIBILITY Criteria: Any State communications related to applicants’ benefits received by any DSS department should be shared with all areas from which the participant receives benefits. State files should be reviewed internally to ensure all actions have been properly closed and the corrective action has been taken. Workers should be retrained on what process needs to be followed when State communications are received. The County agrees with the finding. Section III - Federal Award Findings and Questioned Costs (Continued) We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. The County did not initiate ex parte review timely, therefore, no eligibility review was completed in the required time period. The lack of follow up and certification lead to applicants receiving Medicaid benefits for which they were not eligible. Ineffective communication between departments within the Department of Social Services. One area within DSS received State communications that applicants would no longer be eligible for SSI benefits and the County needed to conduct an application process. This information was not shared with other departments in DSS from which the recipient was also receiving benefits. This is a repeat finding from the immediate previous audit, 2022-008.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Food and Nutrition Services (FNS) Cluster AL # 10.551 and 10.561 Finding: 2023-007 SIGNIFICANT DEFICENCY ELIGIBILITY Criteria: Any State communications related to applicants’ benefits received by any DSS department should be shared with all areas from which the participant receives benefits. State files should be reviewed internally to ensure all actions have been properly closed and the corrective action has been taken. Workers should be retrained on what process needs to be followed when State communications are received. The County agrees with the finding. Section III - Federal Award Findings and Questioned Costs (Continued) We examined 60 cases from of a total of 552,116 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to redetermine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. The County did not initiate ex parte review timely, therefore, no eligibility review was completed in the required time period. The lack of follow up and certification lead to applicants receiving Medicaid benefits for which they were not eligible. Ineffective communication between departments within the Department of Social Services. One area within DSS received State communications that applicants would no longer be eligible for SSI benefits and the County needed to conduct an application process. This information was not shared with other departments in DSS from which the recipient was also receiving benefits. This is a repeat finding from the immediate previous audit, 2022-008. Per Section 200.303 of the Uniform Grant Guidance, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The State has provided policies and procedures to ensure that the County is meeting the federal guidance, relevant policies are: Food and Nutrition Services Policy 305 describes the verification sources and requirements and the FNS units primary responsibility for providing documentary evidence to support statements on applications and recertifications and procedures required if the statements by applicant/beneficiary are questionable. Food and Nutrition Services Policy 300 describes the sources of income countable and not countable to the household for determining financial eligibility. Food and Nutrition Services Policy 310 describes the procedures related to verifying changes in income (i.e. termination, end of contract, temporary, etc.). Due to the errors noted, eligibility cannot be sufficiently substantiated and there is a risk that the County could provide funding and/or benefits to individuals who are not program eligible. The County should provide training of management and staff on the program's eligibility requirements, proper case review process, and required verifications for eligibility. Also, the County should ensure that their formal internal review process is adequately completed to identify and correct errors in case reviews. The County agrees with the finding and is implementing actions to correct these issues, which are further discussed in the corrective action plan. There were a total of 6 errors found in our testing: 3 instances where verification of an expense used for a deduction of income was not included in the case file and 3 instances where earned income was incorrectly caclculated or verification of representative income was not completed or entered correctly in NCFAST. There was no known affect to eligibility and there were no known questioned costs. We examined 25 of 8,174 FNS recipients from the a report of all active FNS beneficiaries provided by Nash County's Department of Human Services. The finding is being reported with the financial statement audit as it relates to FNS administrative cost compliance audit. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2022-004 IV-D Cooperation with Child Support SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with the Medicaid Manual MA-3365, all Medicaid cases should be evaluated and referred to the Child Support Enforcement Agency (IV-D). The Child Support Enforcement Agency (IV-D) can assist the family in obtaining financial and/or medical support or medical support payments from the child?s non-custodial parent. Cooperation requirement with Social Services and Child Support Agencies must be met or good cause for not cooperating must be established when determining Medicaid eligibility. Condition: There was 1 error discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 555,244 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to North Carolina Families Accessing Services through Technology (NC FAST) and a participant could have been approved for benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2021-001. Cause: Human error in reading the Automated Collection and Tracking System (ACTS) report and/or ineffective case review process. Recommendation: Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determine eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2022-005 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with Medicaid Manual MA-2230, Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or noncountable resources and explained within the documentation. Condition: There were 2 errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 555,244 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2021-002. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2022-006 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. Condition: There were 3 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 555,244 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2021-003. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2022-007 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. Condition: There were 8 errors discovered during our procedures that inaccurate information was entered when determining eligibility. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 555,244 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2022-008 Untimely Review of SSI Termination SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with the Medicaid Manual MA-3120, the State sends notification to the County when a participant is no longer eligible under Supplemental Security Income (SSI) determination, the County is required to initiate the ex parte review within 5 workdays of the date the termination appears on the SSI Termination Report, and complete the redetermination within 4 months of the month the case appears on the SSI Termination Report and notify the recipient about applicant's ongoing eligibility for Medicaid. Condition: There was 1 applicant/beneficiary was not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 555,244 Medicaid claims from the Medicaid beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: The County did not initiate ex parte review timely, therefore, no eligibility review was completed in the required time period. The lack of follow up and certification lead to applicants receiving Medicaid benefits for which they were not eligible. Cause: Ineffective communication between departments within the Department of Social Services. One area within DSS received State communications that applicants would no longer be eligible for SSI benefits and the County needed to conduct an application process. This information was not shared with other departments in DSS from which the recipient was also receiving benefits. Recommendation: Any State communications related to applicants? benefits received by any DSS department should be shared with all areas from which the participant receives benefits. State files should be reviewed internally to ensure all actions have been properly closed and the corrective action has been taken. Workers should be retrained on what process needs to be followed when State communications are received. Views of responsible officials and planned corrective actions: The County agrees with the finding.

Finding: 2021-001 SIGNIFICANT DEFICENCY Eligibility Criteria: The Child Support Enforcement Agency (IV-D) can assist the family in obtaining financial and/or medical support or medical support payments from the child?s non-custodial parent. Cooperation requirement with Social Services and Child Support Agencies must be met or good cause for not cooperating must be established when determine Medicaid eligibility. Condition: There were 1 errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 Medicaid applicants from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2020-002. Cause: Error in reading the ACTS report and/or ineffective case review process. Recommendation: Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determine eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2021-002 SIGNIFICANT DEFICENCY Eligibility Criteria: Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or non-countable resources and explained within the documentation. Condition: There were 1 errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 Medicaid recipients from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and a participant could have been approved for benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2020-004. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2021-003 SIGNIFICANT DEFICENCY Eligibility Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. Electronic matches are required at applications and redeterminations. Condition: There were 1 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. Questioned Cost: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 Medicaid applicants from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST and applicants could have been approved for benefits for which they were not eligible. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources and income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 SIGNIFICANT DEFICENCY / NONCOMPLIANCE Eligibility US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 Finding: 2020-002 SIGNIFICANT DEFICENCY / NONCOMPLIANCE Eligibility Criteria: The Child Support Enforcement Agency (IV-D) can assist the family in obtaining financial and/or medical support or medical support payments from the child?s non-custodial parent. Cooperation requirement with Social Services and Child Support Agencies must be met or good cause for not cooperating must be established when determine Medicaid eligibility. Condition: There were eight errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. Of these, one applicant/beneficiary received assistance for which the recipient was not eligible. Questioned Cost: $700. This amount was determined by totaling all the aid received by the ineligible beneficiaries for all claims during the fiscal year ending 6/30/2020 which had dates of service occurring within the certification period in question. Context: We examined 60 Medicaid applicants from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST which could affect income. Therefore a participant could have been approved to receive assistance for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2019-1. Cause: Error in reading the ACTS report and/or ineffective case review process. Recommendation: Files should be reviewed internally to ensure proper information is in place and necessary procedures are taken when determine eligibility. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding. Supervisors will perform second party reviews to ensure proper documentation is contained in files to support eligibility determinations. Workers will be retrained on what information should be maintained in case files, the importance of complete and accurate record keeping, and reserve calculations.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 SIGNIFICANT DEFICENCY / NONCOMPLIANCE Eligibility Criteria: In accordance with 42 CFR 435, documentation must be obtained as needed to determine if a recipient meets specific standards, and documentation must be maintained to support eligibility determinations. In accordance with 2 CFR 200, management should have an adequate system of internal controls procedures in place to ensure an applicant is properly determined or redetermined for benefits. Condition: There were three errors discovered during our procedures that inaccurate information was entered when determining eligibility. Of these, one applicant/beneficiaries received assistance for which the recipient was not eligible. Questioned Cost: $655. This amount was determined by totaling all the aid received by the ineligible beneficiaries for all claims during the fiscal year ending 6/30/2020 which had dates of service occurring within the certification period in question. Context: We examined 60 Medicaid recipients from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST which could affect countable resource. Therefore, a participant could have been approved to receive benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2019-1. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding. Supervisors will perform second party reviews to ensure proper documentation is contained in files to support eligibility determinations. Workers will be retrained on what information should be maintained in case files, the importance of complete and accurate record keeping.

US Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid; Title XIX) CFDA# 93.778 SIGNIFICANT DEFICENCY / NONCOMPLIANCE Eligibility Criteria: Medicaid for Aged, Blind and Disabled case records should contain documentation that verifications were done in preparation of the application and these items will agree to reports in the NC FAST system. In this process, the countable resources should be calculated correctly and agree back to the amounts in the NC FAST system. Any items discovered in the verification process should be considered countable or non-countable resources and explained within the documentation. Condition: There were two errors discovered during our procedures that resources in the county documentation and those same resources contained in NC FAST were not the same amounts or files containing resources were not properly documented to be considered countable or non-countable. Of these, one applicant/beneficiaries received assistance for which the recipient was not eligible. Questioned Cost: $44,093. This amount was determined by totaling all the aid received by the ineligible beneficiaries for all claims during the fiscal year ending 6/30/2020 which had dates of service occurring within the certification period in question. Context: We examined 60 Medicaid applicants from the Medicaid Beneficiary report provided by NC Department of Health and Human Services to re-determine eligibility. These findings are being reported with the financial statement audit as it relates to Medicaid administrative cost compliance audit. Effect: For those certifications/re-certifications there was a chance that information was not properly documented and reconciled to NC FAST which could affect countable resource. Therefore, a participant could have been approved to receive benefits for which they were not eligible. Identification of a repeat finding: This is a repeat finding from the immediate previous audit, 2019-1. Cause: Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. Recommendation: Files should be reviewed internally to ensure proper documentation is in place for eligibility. Workers should be retrained on what files should contain and the importance of complete and accurate record keeping. We recommend that all files include online verifications, documented resources of income and those amounts agree to information in NC FAST. The results found or documentation made in case notes should clearly indicate what actions were performed and the results of those actions. Views of responsible officials and planned corrective actions: The County agrees with the finding. Supervisors will perform second party reviews to ensure proper documentation is contained in files to support eligibility determinations. Workers will be retrained on what information should be maintained in case files, the importance of complete and accurate record keeping, and reserve calculations.

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 MATERIAL WEAKNESS NONMATERIAL 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 GRANVILLE COUNTY, NORTH CAROLINA SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 158 ? 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 59 instances of case records not containing the proper verifications or proper computations as required by policy. Five of these files were not reviewed timely. Five case files did not contain the appropriate entries for the level of care as required for living arrangement documentation. One case did not contain any documentation as to how the disability was verified. One case did not contain a second source to verify NC residency. Another case did not have the correct information entered into evidence in NCFast related to Medicare insurance. One case did not follow policy regarding patients in lockdown units. One case did not follow the post eligibility requirement that the applicant apply for social security disability. One case showed information in the New Hire information on the On-line Verification that was not cleared/followed up on. One case went to an ex-parte review upon termination of SSI benefits however the person was not eligible for Medicaid as they were over the income limit but their case was not properly end dated and they continued receiving benefits. One case did not send timely notification of the need for the updated FL-2 until it was already past due. A case did not receive the Appendix E for the Special Assistance payment calculations until 5 months after the authorization date so payment continued based off of the original application, not the recertification. One case did not verify the age of the case participant until four months after the certification. One case did not run on-line verification for the child and did not have any verification in the file supporting US citizenship. Two cases contained errors in the calculation of household composition and household size. In a deductible case it was noted that the bills used to satisfy the ongoing deductible were for a month that was later approved for retroactive coverage of Medicaid however since the December bills were utilized to meet a deductible and then subsequently approved for payment under another case, that case would be ineligible. In one case, the eligibility check showed a different amount for unearned income than what was verified during the certification process and the decision was accepted by the caseworker. There were six cases that contained errors with vehicle verifications. Bank account verifications and recording of those accounts led to errors in seven cases. Three did not have the case?s resource ownership properly documented in the records. One case did not enter the cash surrender value of life insurance into evidence of NCFast. Two case files entered the property as $0.01 in evidence in NCFast instead of entering the actual value of the property owned. Finally, there were a total of 15 errors dealing with income verification / calculation. Questioned Costs: There were $45 in known errors. The known error rate projects or extrapolates to the entire population of claims paid for the year to an estimated $302,268 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 852,224 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 33 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 two cases and the related claims. Those claims totaled $45. Identification of a repeat finding: This is a repeat finding from previous audits, 2017-1, 2017-2, 2016-2, 2016-3, 2016-4, 2016-6, and 2016-7. 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 will continue to train employees on a monthly basis and as needed when policies are received. ? The County will continue to hold weekly huddles and power meetings to discuss case issues and case due dates. ? Supervisors and lead workers will continue to conduct second party reviews focusing on the above-mentioned errors and appropriate documentation. ? Supervisors and lead workers will continue to use the Check List to ensure proper information is in NCFAST to make an accurate and timely eligibility determination.

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: 2019-2 SIGNIFICANT DEFICIENCY DSS Crosscutting Requirements for Reporting Criteria: Employee daysheets should be completed timely so all time is included in the monthly Percentage of Time Report submitted to the State. All time included on the daysheets should be supported by documentation within the casefiles or other documentation maintained by the County. Condition: We noted four instances in which the employee?s daysheets could not be supported by documentation in the casefiles or other documentation maintained by the County. Questioned Costs: None. Finding relates to reporting criteria. Context: Out of the 40 days sheets tested, we noted four instances in which the employee?s daysheets could not be supported by documentation in the casefiles or other documentation by the County. One of the daysheets did have documentation in the file on the previous day. Effect: Time listed on the daysheets and therefore being included on the Percentage of Time Report that could not be supported as actually being performed could lead to overstatement of the time being reported for that month. Cause: In one instance it was noted on the daysheet that a 2nd party review had taken place but there was no documentation of the 2nd party review in the file and no log maintained of 2nd party reviews. It is also noted that sometimes the review of evidence in NCFast does not create timestamps within the software to validate work being performed. There is also an ineffective review being performed on daysheets to determine that work claimed on daysheets is supported by documentation within the County files. Recommendation: We recommend that employees ensure that there is support maintained in files to support the work performed and claimed on their time sheets. Always remember to maintain an audit trail and when not performing action items within NCFast that will create time stamps to make notes and maintain a log such as details in client contacts or other locations that notes can be written that states the actions that were done such as reviewed evidence, telephone calls made, etc. The County should implement a review process of the daysheets where a sample is taken monthly to review support for the time claimed on the daysheets to verify that employees are reporting time accurately and that required support is being maintained. Views of responsible officials and planned corrective actions: Employees will be provided a refresher training on documentation of day sheets and making sure their documentation on Day Sheets matches the case files.

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