YANCEY COUNTYLocal Government

Finding 2024-02: Material Noncompliance/Material Weakness in Internal Control Criteria: Uniform Guidance 2 CFR § 200.303 requires the non-Federal entity to “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.” Reasonable assurance includes the County documenting a key control was implemented. Condition: The County has not implemented a formal process or internal policy for performing 2nd party reviews to verify the income verification and eligibility determinations made by County staff. Questioned Costs: No questioned costs. Context: The 2nd party review process is the key internal control over the accuracy of FNS/SNAP case income verification and eligibility determinations made by County staff. County staff noted that they follow the Federal policy regarding 2nd party review over FNS, which requires 2nd party reviews on all households with five of more members and try to perform others reviews as time allows, but that documentation of these reviews is not maintained. There was no documentation available for us to review to verify that any 2nd party reviews had been performed. Cause: The County does not have a formal policy requiring 2nd party reviews be performed or a process to document the 2nd party reviews that are performed. Effect: The current 2nd party review process does not function as an effective internal control over compliance. Identification of repeat finding: This is not a repeat finding. Recommendation: We recommend the implementation of a formal and documented 2nd party review process to include an appropriate number of reviews given the volume of applications processed for a given time period. These 2nd party reviews that are performed should be selected from the entire population of cases, not just those with 5 or more household members. Views of Responsible Officials and Planned Corrective Actions: The County agrees with this finding and is taking coordinated effort and action. Refer to corrective action plan on subsequent page 15.

US Department of Health and Human Services Passed through the NC Dept. of Health and Human Services Program Name: Medicaid Assistance Program (Medicaid) AL #: 93.778 Finding 2022-01: Significant Deficiency in Internal Control Criteria: Uniform Guidance 2 CFR ? 200.303 requires the non-Federal entity to ?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.? Each County in the State is required to submit quarterly reports with the second party review results with a minimum number of second party reviews completed. Condition: The County is required to complete a minimum number of second party reviews and report the results to the State, which is considered a key control over eligibility determination for Medicaid cases. There is incomplete documentation of the minimum 160 cases that County indicated it performed. GK selected a sample of 10 (10%) of the second party reviews from the list of 99 completed reviews provided by the County and determined that there were no errors in the available cases. Questioned Costs: No questioned costs. Context: The County is required to complete at least 16 Adult Medicaid cases and 24 Family/Children Medicaid cases each quarter and send a summarized report to the State, for a total of 160 cases each year. The County was able to provide a list of 99 of these reviews for the audit, which is 62% of the total 160 required. Cause: Due to lack of documentation, we were not able to sample from a complete population of second party reviews. Effect: Although the 10 selected second party reviews appeared to be appropriately performed, we are unable to conclude on the effectiveness of this internal control or compliance with the State quality control requirement to ensure their review findings were appropriate and that corrections were made timely. Identification of repeat finding: This is not a repeat finding. Recommendation: We would recommend the County make a list of each second party review completed, including the case number, program, date of review, whether there were errors to be corrected. Alternatively, we would recommend that the County use the Second Party Review form provided by the State for all cases and retain a copy of the review until the completion of the audit. Views of responsible officials and planned corrective actions: The County agrees with this finding.

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) Crosscutting requirements CFDA # 93.778 US Department of Health and Human Services Passed through the NC Dept. of Health and Human Services Program Name: Foster Care (Title IV-E) CFDA # 93.658 Finding: 2019-001 Day Sheet Accountability SIGNIFICANT DEFICIENCY NONMATERIAL NONCOMPLIANCE ? REPORTING Criteria: County departments of social services in North Carolina must comply with the NC Social Services Fiscal Control Manual Section III A, which requires County DSS employees who provide direct client services during the month to maintain day sheets in accordance with the Service Information System (SIS) Policy. According to the SIS User?s Manual, day sheet entries must be supported by documentation in case record files. For auditing and monitoring purposes, entries made by caseworkers providing direct client services must either include the client information on the time entry, or have another reliable method such as a log, journal, or calendar available so that time entries can be supported by evidence of the work that was performed. This requirement affects multiple programs. As such, we tested both Foster Care and the Medicaid programs according to the crosscutting requirements. Condition: The County did not have an effective system of internal control over day sheet reporting for the fiscal year under review. The County had a policy requiring either client identification on the time entry or an alternative record to support the direct client service time reported on the DSS 1571 for administration of the Medicaid and Foster Care programs, which we observed during our review. However, there were multiple instances where the caseworker could not provide supporting documentation for the time entry recorded on the day sheet, were caseworker time was miscoded to an incorrect program, or where time entry was unreasonable based on supporting evidence. Questioned Costs: None; noncompliance relates to reporting and recordkeeping requirements. Context: Costs reimbursed to the County for administering the Medicaid and Foster Care programs were approximately $1,197,881 for the year ended June 30, 2019, the majority of which are salaries and benefits of DSS workers. From 71 time entries tested representing 7,668 minutes, 180 minutes (2.35%) could not be verified by examining the casefiles for evidence of time spent, were miscoded to an incorrect program, or time entry was unreasonable based on supporting evidence. Overall, payroll and benefits reported on the DSS 1571 were supported by payroll records which were authorized and reconciled to the County?s general ledger. However, caseworker time records should be detailed enough to allow audit procedures to be performed to verify evidence of time worked in individual case files. Effect: The County is not in compliance with the day sheet reporting requirement; caseworker direct program service time cannot be supported. Without proper accountability and monitoring, caseworkers may not spend their time most efficiently for the benefit of the program. For caseworkers who direct charge multiple programs, the allocation of their time to those programs may not be accurate. A program may be overcharged for a caseworker?s time. Identification of a repeat finding: This is a repeat finding (2018-001). The County has made progress towards implementing an effective policy to record time as the number of instances of noncompliance have decreased compared to the prior year. Cause: While the County made considerable progress to remedy the prior year finding, the prior year?s corrective action was taken after the current fiscal year had already begun and therefore was not in effect for the entire fiscal year. Recommendation: Management?s corrective action plan that was implemented during the year appears to be overall effective. Management should continue to monitor and enforce the policy that requires caseworkers to document the client they worked on and to make sure the every day sheet entry includes identification of the client. Caseworkers should document every phone call or other casework in the NC FAST narrative, or other form of journal, both accurately and in a timely manner. Supervisors should review this information when approving caseworker time reports to ensure caseworkers are following the policies and procedures set in place by management. Views of responsible officials and planned corrective actions: The County agrees with the finding and is appears to have taken steps to revise their internal procedures for day sheets. Please refer to the County?s corrective action plan on page 86.

US Department of Agriculture Passed through the NC Dept. of Health and Human Services Program Name: Supplemental Nutrition Assistance Program (SNAP) CFDA # 10.561 Finding: 2019-002 Second Party Reviews MATERIAL WEAKNESS Criteria: The County should have an effective system of internal controls in order to ensure that case files are reviewed periodically by supervisors. The reviews are a necessary components in the County?s system of internal control to train the caseworkers, and detect and correct errors in eligibility determinations or documentation. Condition: The County?s second party review process is not detecting and correcting errors in a timely manner. There were two second party review case files that were reviewed by a supervisor were errors were noted by the reviewer but not corrected by the caseworker. The errors noted during our review were technical errors and did not have an effect on eligibility determinations. Cause: The County does not have a formal process to track and monitor the second party reviews. Effect: Errors can occur in determining or documenting SNAP eligibility and not be detected or corrected in a timely manner. Potential errors not detected in second party review process could impact an individual's eligibility determination and potential medical expenses could be inappropriately paid. The County could be responsible to pay back these claims. Identification of a repeat finding: This is not a repeat finding. Questioned costs: None. Recommendation: We have recommended to management that the second party review process be standardized for all case files reviewed. Supervisors should review the case file, give the corrections to the caseworker (if any), caseworkers should make any corrections, and return to supervisor who reviews the corrections and signs off that the case file is now correct and free of any errors. Views of responsible officials and planned corrective actions: The County agrees with finding. Please refer to the County?s corrective action plan on page 86.

US Department of Health and Human Services Passed through the NC Dept. of Health and Human Services Program Name: Low-Income Home Energy Assistance (LIEAP & CIP) CFDA # 93.568 Finding: 2019-003 Application Review MATERIAL WEAKNESS Criteria: The County should have an effective system of internal controls in order to ensure that case files are reviewed periodically by supervisors. The reviews are a necessary components in the County?s system of internal control to train the caseworkers, and detect and correct errors in eligibility determinations or documentation. Condition: The County does not have a review process to detect and correct client application errors in a timely manner. After applications are taken from caseworkers, there is no formal review of this application to ensure there are no errors in the case file. As a result, out of the 60 items we tested, there were five errors relating to income reported in NC FAST. The errors noted during our review were technical errors and did not have an effect on eligibility determinations. Cause: The County does not have a formal process to review client applications. Effect: Errors can occur in determining or documenting LIEAP & CIP eligibility and not be detected or corrected in a timely manner. Potential errors not detected in a supervisor review process could impact an individual's eligibility determination and potential expenditures could be inappropriately paid. The County could be responsible to pay back these claims. Identification of a repeat finding: This is not a repeat finding. Questioned costs: None. Recommendation: We have recommended to management that a supervisor review process be standardized for a randomly selected list of cases each month. Supervisors should review the case file, give the corrections to the caseworker (if any), caseworkers should make any corrections, and return to supervisor who reviews the corrections and signs off that the case file is now correct and free of any errors. Views of responsible officials and planned corrective actions: The County agrees with finding. Please refer to the County?s corrective action plan on page 86.

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