Richmond CountyLocal Government

MATERIAL WEAKNESS/MATERIAL NONCOMPLIANCE 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 There were a total of 27 errors found during our testing procedures: - There were 1 errors where income or household size was incorrectly calculated or inaccurate information was entered into the case file. - There was 4 error where resources were incorrectly calculated or were not properly documented in the case file. - There were 3 errors where required information needed for eligibility determinations were not requested or not requested timely at applications or redeterminations. - There were 19 errors where a redetermination of eligibility was not performed in accordance with program requirements. 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 461,866 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. 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.This is a repeat finding from the immediate previous audit, 2024-006, 2024-007 and 2024-008. Note in FY 2025 Medicaid findings were combined into a single finding. 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. 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. The County agrees with the finding and is implementing actions to correct these issues, which are further discussed in the corrective action plan

Richmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2024-005 IV-D Cooperation with Child Support SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: 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 Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2024-006 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: There were 2 errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. 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 noncustodial 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. 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. We examined 60 cases from of a total of 826,901 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. 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. This is a repeat finding from the immediate previous audit, 2023-004. There were 4 errors discovered during our procedures where income or household size was incorrectly calculated or inaccurate information was entered into the case file. 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. Section III - Federal Award Findings and Questioned Costs There was no known affect to eligibility and there were no known questioned costs. 134

Richmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 Questioned Costs: 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 Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2024-007 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: This is a repeat finding from the immediate previous audit, 2023-006. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 826,901 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. 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 correct income and/or household size calculations, proper information is included in the case file, 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. This is a repeat finding from the immediate previous audit, 2023-005. 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. Section III - Federal Award Findings and Questioned Costs (continued) The County agrees with the finding. See Corrective Action Plan in the following section. 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 where resources were incorrectly calculated or were not properly documented in the case file. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 826,901 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. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. 135

Richmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 Questioned Costs: 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 Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2024-007 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: This is a repeat finding from the immediate previous audit, 2023-006. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 826,901 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. For those certifications/re-certifications there was a chance that information was not properly documented and reconciled toRichmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 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; Title XIX) AL #: 93.778 Finding: 2024-008 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: We examined 60 cases from of a total of 826,901 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. This is a repeat finding from the immediate previous audit, 2023-007. 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. Section III - Federal Award Findings and Questioned Costs (continued) Case files should be reviewed internally to ensure correct calculations of resources are made, proper information is included in the case file, 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. 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 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. 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. There were 2 errors 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. 136 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 correct income and/or household size calculations, proper information is included in the case file, 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. This is a repeat finding from the immediate previous audit, 2023-005. 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. Section III - Federal Award Findings and Questioned Costs (continued) The County agrees with the finding. See Corrective Action Plan in the following section. 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 where resources were incorrectly calculated or were not properly documented in the case file. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 826,901 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. Ineffective record keeping and ineffective case review process, incomplete documentation, and incorrect application of rules for purposes of determining eligibility. 135

Richmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 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; Title XIX) AL #: 93.778 Finding: 2024-008 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: We examined 60 cases from of a total of 826,901 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. This is a repeat finding from the immediate previous audit, 2023-007. 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. Section III - Federal Award Findings and Questioned Costs (continued) Case files should be reviewed internally to ensure correct calculations of resources are made, proper information is included in the case file, 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. 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 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. 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. There were 2 errors 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. 136

Richmond County Schedule of Findings and Questioned Costs For The Year Ended June 30, 2024 U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2024-009 Untimely Review of SSI Terminations SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Cause: Recommendation: Views of responsible officials and planned corrective actions: Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 As a result of the lack of a proper eligibility determination, federal funds were distributed to ineligible recipients. Due to the nature of these types of eligibility determinations and the lack of a proper review by the department, the auditor is unable to determine the known or likely questioned costs. 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 ex-parte review. This information was not shared with other departments in DSS from which the recipient was also receiving benefits. The County agrees with the finding. See Corrective Action Plan in the following section. Any State communications related to applicants/beneficiaries 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. Section III - Federal Award Findings and Questioned Costs (continued) In accordance with the Medicaid Manual MA-3120, the State sends notification to the County when a participant is no longer eligible under a SSI determination. The County has a certain time period to initiate an ex-parte review to determine whether the recipient qualifies for Medicaid under any other coverage group, such as Family and Children's Medicaid, North Carolina Health Choice for Children, Work First Family Assistance, or Medicaid for the Aged, Blind and Disabled. There were 3 applicants/beneficiaries not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. Of these 3 errors, one was determined to be an eligibility error with potential questioned costs. We examined 60 cases from of a total of 826,901 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. 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. SIGNIFICANT DEFICENCY: Finding 2024-005, 2024-006, 2024-007, 2024-008, 2024-009 also apply to State requirements and State Awards. Section IV - State Award Findings and Questioned Costs 137

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-004 IV-D Cooperation with Child Support SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Section II - Financial Statement Findings (continued) The County agrees with this finding. In accordance with North Carolina General Statutes SS 143C, budget revisions must be requested and approved prior to any commitment and/or expenditure that would exceed the amount budgeted. Entities should not overspend the authorized budget. The County overspent in Information Technology by $199,505, Court Facilities by $5,908, General and Administrative by $210,485, Jail by $1,491, and Emergency Services by $29,403. This was an oversight that resulted from not budgeting for GASB 96 entries. Efforts will be made to ensure that the budget is appropriately amended in the future. The Board spent funds that were not available for those respective departments. The County did not properly amend the budget as needed to account for the GASB 96 entries that were necessary in the current year. The budget should be reviewed and appropriate amendments made during the year. Section III - Federal Award Findings and Questioned Costs There was no known affect to eligibility and there were no known questioned costs. There were 7 errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. 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 noncustodial parent. Cooperation requirement with Department of Social Services (DSS) and Child Support Agencies must be met or good cause for not cooperating must be established when determine Medicaid eligibility. 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. We examined 60 cases from of a total of 754,993 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. 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; Title XIX) AL #: 93.778 Finding: 2023-005 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 754,993 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. 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. This is a repeat finding from the immediate previous audit, 2022-006. Section III - Federal Award Findings and Questioned Costs (continued) 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 eligibilitydeterminations. 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 5 errors discovered during our procedures that inaccurate information was entered when determining eligibility. 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.

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; Title XIX) AL #: 93.778 Finding: 2023-005 Inaccurate Information Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: Context: Effect: Identification of a repeat finding: Cause: Recommendation: Views of responsible officials and planned corrective actions: There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 754,993 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. 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. This is a repeat finding from the immediate previous audit, 2022-006. Section III - Federal Award Findings and Questioned Costs (continued) 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 eligibilitydeterminations. 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 5 errors discovered during our procedures that inaccurate information was entered when determining eligibility. 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.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-006 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: 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 Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-007 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: 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. 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. There were 4 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. 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 non-countable resources and explained within the documentation. There were 5 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. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 754,993 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. Section III - Federal Award Findings and Questioned Costs (continued) This is a repeat finding from the immediate previous audit, 2022-007.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-006 Inaccurate Resources Entry SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: Questioned Costs: 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 Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 Finding: 2023-007 Inadequate Request for Information SIGNIFICANT DEFICENCY Eligibility Criteria: Condition: 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. 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. There were 4 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. 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 non-countable resources and explained within the documentation. There were 5 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. There was no known affect to eligibility and there were no known questioned costs. We examined 60 cases from of a total of 754,993 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. Section III - Federal Award Findings and Questioned Costs (continued) This is a repeat finding from the immediate previous audit, 2022-007. Questioned Costs: 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: 2023-008 Inaccurate Information SIGNIFICANT DEFICENCY Eligibility Criteria: This is a repeat finding from the immediate previous audit, 2022-009. 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 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. The County agrees with the finding. See Corrective Action Plan in the following section. 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. Section III - Federal Award Findings and Questioned Costs (continued) 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.). We examined 60 cases from of a total of 754,993 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.

Questioned Costs: 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: 2023-008 Inaccurate Information SIGNIFICANT DEFICENCY Eligibility Criteria: This is a repeat finding from the immediate previous audit, 2022-009. 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 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. The County agrees with the finding. See Corrective Action Plan in the following section. 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. Section III - Federal Award Findings and Questioned Costs (continued) 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.). We examined 60 cases from of a total of 754,993 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. Condition: Questioned Costs: Context: Effect: Cause: Recommendation: Views of responsible officials and planned Program Name: Medical Assistance Program (Medicaid; Title XIX) AL #: 93.778 SIGNIFICANT DEFICENCY: Finding 2023-004, 2023-005, 2023-006, 2023-007 also apply to State requirements and State Awards. Section IV - State Award Findings and Questioned Costs 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 8 errors found in our testing: 4 instances where verification of an expense used for a deduction of income was not included in the case file; 1 instance where verification check returned a record for employment but the case worker did not follow-up; 1 instance where a telephonic signature was not approapriately documented in NCFAST; 1 instance where the caseworked did not appropriately end date old evidence for an expense deduction in NCFAST; and 1 instance where child support income was not entered correctly in NCFAST. There was no known affect to eligibility and there were no known questioned costs. We examined 25 of 14,829 FNS recipients from the a report of all active FNS beneficiaries provided by Richmond 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. 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

US Department of Treasury Passed through the NC Department of Health and Human Services Program Name: Coronavirus State and Local Fiscal Recovery Fund AL #: 21.027 Finding: 2022-004 Lack of General Compliance Policies SIGNIFICANT DEFICENCY Internal Control Criteria: In accordance with the U.S. Department of Treasury 31 CFR Part 35, Coronavirus State and Local Fiscal Recovery Funds Final Rule and the Uniform Guidance, General Financial Management Internal Controls, Eligible Projects Determination & Documentation Policy, Cost Principles/Allowable Costs Policy, Civil Rights Compliance / Nondiscrimination Policy, Records Retention Policy, and Conflict of Interest are required to be adopted as condition of receiving the funds. Condition: The County did not adopt and implement the following policies for Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) expenditures: Record Retention, Eligible Use, and Allowable Costs. Effect: The County could have used the funds for activities and costs that were prohibited by the Final Rule. Cause: County oversight of the new federal grant requirements for the CSLFRF expenditures to have the stated policies in place. Recommendation: The county management should review the award terms and conditions, and the Uniform Guidance more carefully to ensure all compliance requirements are met. Views of responsible officials and planned corrective actions: The County agrees with the finding.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2022-005 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 Department of Social Services (DSS) and Child Support Agencies must be met or good cause for not cooperating must be established when determine Medicaid eligibility. Condition: There were 6 errors discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. Questioned Costs: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 830,559 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. 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 determining 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.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2022-006 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 22 errors discovered during our procedures that inaccurate information was entered when determining eligibility. Questioned Costs: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 830,559 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.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2022-007 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 non-countable resources and explained within the documentation. Condition: There were 9 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 Costs: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 830,559 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.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical 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 not reviewed timely and determined to be eligible for Medicaid when their SSI benefits were terminated. Questioned Costs: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 830,559 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.

U.S. Department of Health and Human Services Passed through the NC Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2022-009 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 21 errors discovered during our procedures that inadequate information was requested at applications and/or redeterminations. Questioned Costs: There was no known affect to eligibility and there were no known questioned costs. Context: We examined 60 from a total of 830,559 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. 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.

U.S. Department of Health and Human Services Passed through the N.C. Department of Health and Human Services Program Name: Medical Assistance Program (Medicaid; Title XIX) CFDA #: 93.778 Finding: 2020-001 Significant Deficiency 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 was one error discovered during our procedures that referrals between DSS and Child Support Agencies were not properly made. Questioned Costs: 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. This finding is 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 affect countable resource and a participant could have been approved for benefits that they were not eligible. 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 official and planned corrective actions: The County agrees with the finding. Supervisors will perform reviews of County transfers. Workers will be retrained on when I-VD referrals need to be made and on which cases.