Watauga CountyLocal Government

The County did not have a record to support the direct client service time reported on the DSS 1571 form for administration of the Medicaid program during the period of time our review covered. All caseworker time indicates the client, but this time cannot be supported by activity reports generated from NC FAST or a written narrative in the document manager system. Audit procedures applied to 30 time entries of DSS workers revealed 13 instances where support could not be provided as to the specific client, or no activity was found in the client?s case file to support the related time records. All of these instances were related to time charged to administer the Medicaid program.

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 Finding: 2019-001 Day Sheet Accountability SIGNIFICANT DEFICIENCY? REPORTING NONMATERIAL NONCOMPLIANCE Criteria: Each county?s department 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 to include description of what work was performed, 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 evidence should indicate what was performed for the client during the time indicated by the day sheet or log. This requirement effects multiple programs. Condition: The County did not have a policy requiring either client identification on the time entry with applicable description or an alternative record to support the direct client service time reported on the DSS 1571 form for administration of the Medicaid program during the period of time our review covered. All caseworker time indicates the client, but this time cannot be supported by activity reports generated from NC FAST or a written narrative in the document manager system. Audit procedures applied to 60 time entries of DSS workers revealed 4 instances where support could not be provided as to the specific client, or no activity was found in the client?s casefile to support the related time records. All of these instances were related to time charged to administer the Medicaid program. Questioned Costs: None; noncompliance relates to reporting and recordkeeping requirements. Context: Costs reimbursed to the County for administering the Medicaid program were approximately $1,019,000 for the year ended June 30, 2019, the majority of which are salaries and benefits of DSS workers. From 60 time entries tested representing 3,840 minutes, 155 minutes (4.04%) could not be verified by examining the casefiles for evidence of time spent. 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. Identification of a repeat finding: This is a repeat finding (2018-002). 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: The County misunderstood the requirements in the SIS User Manual regarding client identification and does not have a policy requiring caseworkers to include client identification in their time records, or any other reliable method for tracking direct client time by client. In addition, the County?s casefiles are a mix of paper files and NC FAST, making electronic monitoring using NC FAST activity logs ineffective. Recommendation: We have recommended to management that caseworkers document the PDC case number for the client they worked on and to make sure that every day sheet entry has the name of the client. Caseworkers should document every client phone call or other case work in the NC FAST narrative, rather than documenting it in paper files or caseworker paper time journals. Supervisors should review this information when approving caseworker time reports. Views of responsible officials and planned corrective actions: The County agrees with the finding and is taking steps to revise their internal procedures for day sheets. Please refer to the County?s corrective action plan starts on page 103.

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 Finding : 2019-002 Medicaid Second Party Reviews MATERIAL WEAKNESS ? REPORTING MATERIAL NONCOMPLIANCE Criteria: The Division of Medical Assistance (DMA) requires second party reviews for Medicaid cases of all counties in North Carolina. The reviews are not only a requirement, but are a necessary component in the County?s system of internal control to train case workers, and detect and correct errors in eligibility determinations or documentation. Condition: Watauga County?s second party review process is not detecting and correcting errors in a timely manner, nor is there evidence of a second party review being performed in certain circumstances. We reviewed twenty-five case files that were listed as being reviewed by a second party (supervisor). Seven out of the twenty-five second party review forms could not be located by management. Thereby, there was no indication of such review being completed. Questioned Costs: None; noncompliance relates to reporting and recordkeeping requirements. Effect: The County does not have a formal system of internal control to ensure that the recipient?s casefile contains the necessary second party review forms to substantiate that the recipient?s file has been reviewed. Errors can occur in determining or documenting Medicaid 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. Cause: The County does not have a formal process to track and monitor the second party reviews. Recommendation: The program should establish a policy for supervisory review of the casefiles in the Medicaid program that is based on the risks of determining eligibility and the level of performance each County staff demonstrates. The responsible party should execute a formal review of certain casefiles based on this established policy. Documentation of these formal and periodic reviews should be retained either in the recipient?s casefile or in the responsible party?s records including the nature, scope, and timing of the procedures and the results or findings of the review along with the corrective or follow up action to be performed by the staff member who determined the recipient?s eligibility. Follow-up also should occur by the second party reviewer to verify corrections (when applicable) are made appropriately and timely. Views of responsible officials and planned corrective actions: The county agrees with the finding. Please refer to the County?s corrective action plan starts on page 103.

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 : 2019-003 Foster Care Monitoring MATERIAL WEAKNESS ? ELIGIBILITY, ALLOWABLE COST & ACTIVITES Criteria: County DSS caseworkers are responsible for filling the eligibility form provided (DSS Form 5120) upon determination or redetermination of Foster Care Assistance Benefits. Completing the form requires the social worker to determine and document a recipient?s eligibility according to federal and state guidelines. Once the caseworker fills out the eligibility form, the supervisor should review and approve the recipients eligibility which includes the supervisor?s approval. There is space on the form for the caseworker and supervisor signature. Condition: Of the eight cases selected for testing, two cases did not contain the Supervisors? signature on DSS form 5120. We were unable to verify if a review was performed by the Supervisor since there was no signature. Questioned Costs: None; the errors noted were technical in nature. It did not impact the determination of the two recipient?s eligibility in question. Effect: The two casefiles did not contain a supervisor?s approval noted by signing off on the DSS Form 5120. It is assumed a proper supervisor review did not occur if no supervisor approval is noted. Since no supervisor review occurred, an individual?s eligibility determination could have an unidentified error. There is the potential of unallowed expenditures being requested for reimbursement. Identification of a repeat finding: This is not a repeat finding. Cause: The supervisor did not sign off on DSS Form 5120, which would indicate that the supervisor reviewed the recipients eligibility determination. Internal processes were not present to check and ensure each form completed was properly reviewed and signed off by the supervisor. Recommendation: The County should have policies and procedures in place to ensure that the supervisor is appropriately reviewing and signing off on eligibility review documents. In additional check in the procedures would exist to review all completed forms to ensure each completed form has the appropriate signatures. Views of responsible officials and planned corrective actions: The county agrees with the finding. Please refer to the County?s corrective action plan starts on page 104.

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